Welcome to ITT's First Quarter 2014 Earnings Conference Call. Starting the call today from ITT is Melissa Trombetta, Vice President, Investor Relations. She is joined by Denise Ramos, Chief Executive Officer and President; and Tom Scalera, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 12 p.m. Eastern Daylight Time. [Operator Instructions] . It is now my pleasure to turn the floor over to Melissa Trombetta. You may begin.

Thanks, Lori. Good morning, and welcome to ITT's first quarter 2014 investor review. I'd like to highlight that this morning's presentation, press release and reconciliations of GAAP and non-GAAP financial measures can be found on our website at itt.com/ir. During the course of this call, we will make forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. No forward-looking statements can be guaranteed and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements made on this call should be evaluated together with the risks and uncertainties that affect our business, particularly those disclosed in our SEC filings. Now let's turn to Slide 3, where Denise will discuss our results.

Good morning, everyone. I appreciate you joining us as we announce our financial results for the first quarter of 2014. We are off to a great start. In Q1, we demonstrated our ability to extend our execution track record that reflects the strategic focus and dedication of our 9,400 global employees. The impact of their commitment and contributions are clearly reflected in our ability to continue to grow across key global end markets and geographies today while we invest in our future by focusing on strategic actions that drive profitable growth and value creation. So let me share some of the Q1 financial highlights: Total revenue, up 11%; organic revenue, up 10%, with all 4 businesses contributing to the growth. We delivered solid growth in global chemicals and oil and gas project pumps in key markets. We also drove automotive brake pad market share gains in both Europe and China and aftermarket expansion, and we made market share gains across our strategic connector end markets. During the quarter, industrial pump projects grew 43% over prior year. Included in that growth is a number of large, complex projects with longer production times and higher dollar values. As a result, the Q1 revenue includes 3 percentage points of growth related to these large, long-term, industrial pump projects that are recorded over the life of the contract. We are also very pleased with our adjusted segment operating margin expansion of 90 basis points, driven by strong volume gains, strong net operating productivity and restructuring savings from actions we have been taking in our Interconnect Solutions and KONI shock absorber businesses to optimize our cost structures. Both businesses are producing significant growth while they redefine their long-term strategies. So let me share these well-earned results. Interconnect Solutions grew its adjusted operating margins at 870…

Thanks, Denise. Now let's turn to Slide 5 for a detailed review of our first quarter results. In the quarter, we delivered organic revenue growth of 10% that reflected the power of our diversifications, as each business grew in excess of 6%. Industrial Process led the way with 13% organic growth, fueled by projects in the chemical and oil and gas markets, which were up 35% and 17%, respectively. Mining grew 25% in the quarter, mostly driven by project activity in the Americas. Revenue growth in Industrial Process included $22 million of favorable timing for certain large, long-term industrial pump projects, mostly in the developed oil and gas markets. This growth reflects our expanded portfolio and improved capabilities to execute against an increasing number of complex projects. Motion Technologies delivered another strong quarter, with organic growth of 9%. Motion Technologies team delivered exceptional 8% auto growth, driven by a 10% increase in the dealer service and independent aftermarket channels. The growth in the independent aftermarket included the ramp up of our expanded contract with Continental. We also experienced above-market OEM growth in Europe and, in China, we grew 33%, which is a direct reflection of the organic investments we've recently made in our Wuxi, China, capabilities. Also contributing to Motion Technologies' strength in the quarter was the KONI shock absorber business, which was up 16% globally. This growth reflects the lasting power of the respected KONI brand and the tireless efforts of the team to improve our operational effectiveness and end market focus. Interconnect Solutions delivered its third consecutive quarter of double-digit organic growth and their fourth consecutive quarter with $100 million or more in revenue. The 10% first quarter growth at ICS included gains of 12% in transportation and industrial, 10% in aerospace and defense and 13% in oil…

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

I wanted to ask a couple of questions about the Industrial Process business. First, can you quantify the magnitude of push out you saw in orders? And do you expect to recapture that, still, in 2014? And then also, maybe a little more granularity in terms of what you saw overall in IP, in aftermarket? And then maybe comment a little bit on the softness you're seeing in baseline pumps.

Let me talk a little bit about projects and what we saw with projects. We saw very strong project sales in the quarter for oil and gas, petrochemical and, actually, mining. In fact, we had a 43% project growth in Q1, which, as we indicated, negatively impacted some of our margins. We do see that global oil and gas and petrochemical project orders are increasing from where they were in the second half of 2014 -- 2013, but these very large projects continue to be delayed. We do expect a pickup to happen in the second half of the year. And the reason that we believe that is because we see that some of the longer lead time projects are being released to EPCs, and that the EPCs are starting to order longer lead-time equipment in oil and gas and petrochemical market. So that's really a good sign for the IP business and why we expect improvement as we get into the back half of the year. In terms of the aftermarket. Service has been weak globally and that's, we believe, due to cost-cutting actions by customers and just some general uncertainty about the recovery -- the economic recovery that's taking place. From a parts perspective, North America has been very weak for us, and that's because of a slowdown in MRO spending, which has been impacted by the economic uncertainty. And we did see some weather-related impacts in the first quarter. We do expect that to pick up in the second half. In terms of the rest of the world outside of North America, we've seen good growth, and that's been due to the growing installed base that we have. Remember, capital spares are important and they can be lumpy. It really depends on when plants begin to start up. And so we do expect that, as we get into the back half of the year, that we'll see more improvement in our capital spares. And then let me just also comment on our baseline business, which is a very profitable business for us. And we saw, also, North America softness in our baseline business for the same reasons that I articulated in the parts business. International continues to grow nicely due to some market share gains that we've had with our new ISO pumps there. So, in general, we expect to see improvements in the IP orders as we go into the back part of the year. We should see some of these larger projects picking up and we do expect to see some improvements in the aftermarket in these baseline pumps, which will help the IP margins as we get into the back half. But it's something, still, that we're waiting to see. We've seen some improvement in the baseline pumps in March and April. We're still waiting to see some improvement on the aftermarket side.

And then, just as a follow-up. Organically, by segment, can you sort of talk about where the businesses should fall relative to the 4% to 6%? Which are going to be above, maybe below or in-line? Some sort of commentary like that?

Yes, Matt. As we look across the year, certainly, we like the opportunities that we see in the Industrial Process business. A lot of that growth is going to be project specific. So we would expect IP, given the demand signals we're seeing in oil and gas and chemical markets, in particular, to give us potentially organic revenue growth at the higher end of our guidance. And I think the other businesses are kind of more in line with the middle of the range, as if you just kind of spread it out. But the one I would really point to is, in our Interconnect Solutions business, we are not planning on significant top line growth this year. We did about $100 million of revenue, I think, for a fourth quarter in a row. And I think that's becoming a little bit of a new trend line for this year. But what's happening, Matt, is we're growing in our strategic end markets and we are deemphasizing some non-core markets. And, really, as a result of that, we're probably maintaining revenue that's pretty close to what we're seeing in Q1 carry out through the rest of the year. So the story at ICS, as you know, is around the turnaround and improving the underlying operational efficiencies. That will set us up for more top line growth, certainly, going into 2015. But on balance, I would say, IP would be at the higher end, really based on project activity. Connectors would be at the lower end of our range. And then Motion Tech and Control Technologies will be in the middle.

Yes. I think it's important to understand with Motion Technologies that, while we've seen some very strong growth rates at the end of last year -- second half of last year and what we saw in Q1, a lot of that was attributable to the OES, the aftermarket. And so as we get into the back half of this year, when you think about lapping that from a year ago, we don't expect to see those high volumes that we saw a year ago. So we do expect that -- on the Motion Technology side that, that should moderate as we get into the back half of the year from a growth perspective.

Your next question comes from the line of Mike Halloran of Robert W. Baird. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: So just a follow-up on the Interconnection growth comments. So the trick here is that you're basically saying the organic growth x these end-of-life contracts remains healthy but it's-- the offset's there. Are you seeing a pretty consistent bleed down on those contracts as you work through the year? Or these step up, step downs that happen at the beginning of the year? How does that cadence kind of work out through the year?

It's really these end-of-life product lines that we identified about 1 year or so ago. It's just a gradual decline that we're seeing in those end-of-life projects. So that's -- it's going to extend over this year and into next year also. So you'll continue to see some moderation on the top line growth for ICS. As Tom indicated, the focus that we've had on ICS has been largely to deal with the cost structure because the cost structure that we had in place was too high relative to where the revenue base was. And so we've been focused quite a bit on driving optimization from a facility perspective in that business, which is why, in the second quarter, you saw us announce a further restructuring in their facilities, moving from a facility in California down to a facility in Mexico. Before that, we announced a facility move out of the U.K. And so we continue to work on optimizing the cost structure, not only with the facilities but also how we operate these facilities, operationally. So we hired a new individual that came in and has really been bringing in a lot of lean activities into these facilities and really leaning them out. So that's been, also, a big part of the cost structure decline that we're experiencing in Interconnect solutions. Now, for the future, we've recognized that we needed to make sure that we had the team aligned around key end markets. So we put GMs in place for each of the key markets for ICS. We have a GM for oil and gas, we have a GM for aerospace and defense, a GM for transportation and industrial and a GM for medical. That's important to us as we go out into the future because we want these teams aligned and if full P&Ls associated with these teams, we want them to go after the most profitable parts of their business. And so eventually, you're going to see the top line growing at ICS. We just don't expect to see a lot of traction around that this year, with these end-of-life programs and these new teams that we've gotten into place. So the margin expansion that you're seeing is really related to the cost structure actions that we've had underway.

And just one quick point on the ICS defense market. Aerospace and defense is one of the key segments. And we've had some strength, to date, in defense but, as you know, it's a market these days that's very difficult to predict. So that's something we also watch as it relates to the revenue and connector business as the year progresses. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: And then, related, on the margin side that you guys we're talking about, very healthy margin gains in the quarter here. Anything about those levels that's not sustainable versus the revenue levels you're at on a go-forward basis?

Is that for connectors, Mike, or for across the business? Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: Yes, just for connectors.

Connectors. Yes, I think we have great traction. We -- as we go through this transformation, as Denise is articulating, the complexity will continue to increase. So we are moving product lines, consolidating facilities and footprint actions. We built a nice foundation but I think we've done that largely by going after the low-lying fruit and using those gains to fund the additional wave of activities that we have coming through this year. But we like where we are at this point in the progression. The complexity does increase as we go. I think once we get through this next wave of complexity and reset the footprint and put the changes in place that Denise was mentioning, I think that gives us a step up from where we are now. But I think getting to this point was an important foundational element for the margins. We just need to execute the transformation as we go through the back half of the year.

And as we indicated, this year we wanted to be above 10%. We hit it in Q1. And we do expect to see some nice, steady progressions from there based on these actions that we've taken because these are systemic changes that we're making in this business. So, as Tom said, we had some low-hanging fruit but we've been going in there and we have really been reworking and rewiring the operational gearing in this business. And those benefits do not go away. They will sustain. So we're going to continue to grow this business. We're going to continue to see margin improvement in it. But it's going to be just gradual because we've got to get these changes in place.

Your next question comes from the line of Brian Konigsberg of Vertical Research.

Just starting off, just with Industrial Process. So Denise, you mentioned that you're still seeing more delays. I'm curious, are those incremental delays? I just find it curious because we have heard some of your peers talk about actually starting to book some of the early ethane crackers, at least, that has gotten off the ground. We've seen a couple more of that hit EPC in late '13. From my perspective, it looks like things are actually getting more traction, not less. So I'm just curious, is this a delay that you're seeing between EPC and procurements? Or maybe just kind of elaborate on that.

It is true that, when we look at North America and we look at the petrochemical market, we did see orders pick up momentum during the first quarter in the Gulf Coast region. And so I think that's probably what you're referring to. So we did see that pick up. It's when you go outside of North America and you look at some of the other locations that we have in Latin America and in the Middle East that we were seeing, on the oil and gas side, some of the delays. Even though we had some good projects coming through, it was more the medium-sized projects. It's the larger ones that we've seen some delays on. But we have seen the improvement in the petrochemical market in the Gulf Coast region in North America.

Okay. And maybe you can just touch on pricing. So that, actually, is a pretty big concern as far as the early work that's coming to market. How are you viewing that? Do you -- are you more interested in, I guess, biding your time and waiting for pricing to firm up? Or do you anticipate being aggressive and trying to, I don't know, use productivity to try to make that a good project over time?

It's very project specific. I would say pricing is very competitive out there because you've got a lot of companies that are going after some of these first projects coming down the pipe. We're being very disciplined because we see that there are so many projects out there, with the quote activity and the order activity that we've got, that we can be selective. And we're being very careful about how we price these projects. We look at it from a total cost of ownership perspective and as you go out and you get the aftermarket and you get some of that business with it also, but we're not chasing price, and we're not going to play that game. But it is competitive out there and you've got a lot of people going after a lot of these projects. But we believe that there's going to be enough projects out there that you don't have to give a lot on price in order for that to happen.

If I could just ask one more. Just on Motion Tech, so it seems like that Continental deal you talked about last quarter actually started to kick in. I was under the impression that was more of a -- maybe a late '14 into '15 type of benefit. Is that right? I mean, is this kind of contributing more earlier than you thought? And maybe just give us a sense of how much growth it can actually contribute over '14 and '15?

In the aftermarket, that line did kick in, in the first quarter. Now the first quarter was large, because everybody was building inventory. And so we'll have to see how this plays out as we get throughout the year but it was really a build of inventory. And what we saw is that in terms of that -- the independent aftermarket that we have, which is both the ATE line and this new Galfer line, that we increased 7%, and that was solely due to this new line that we put into place. But we don't expect that kind of growth to continue into the back half of the year because it was building inventory.

Your next question comes from the line of Nathan Jones of Stifel. Nathan Jones - Stifel, Nicolaus & Company, Incorporated, Research Division: If I could just go back to ICS for a minute. You had talked about a 10% margin target for 2014. Did 12% in the first quarter and are talking about revenues being relatively flat for the year. I would think you would incur more benefit from the restructuring as we go through the year. So is there any reason why we shouldn't now expect ICS margin for the year to be above 12%?

Yes. When I mentioned that 10%, what I really was referring to is, as we thought about where margins should be in 2014 for ICS, probably, 6, 8 months ago, we were targeting in excess of 10%. So we're seeing that the benefits from the restructuring that they have underway, we're actually receiving those benefits sooner rather than later, which is why we put up a 12%. So we do expect that we should be around the low teens or so as we go through the rest of the year. But 12% was a good rate for us. We're happy with that. And as I said, we would just expect to just slowly increment up from there as we get into the back half of this year and as we get into 2015.

Yes. And Nathan, about 25% of the headcount activity has taken place so far through Q1. So we have a lot of kind of ongoing activities as we're moving product lines from one location to the other, there's a very systematic approach to kind of rolling that out through the year. So we'll see the savings kind of build as the year progresses from the current actions. But it really -- I think we get the benefit more realized when we jump into 2015, but we want to make sure that we continue to process those transitions very effectively as we move through the year with ICS. Nathan Jones - Stifel, Nicolaus & Company, Incorporated, Research Division: As you've moved through that process in ICS, have you identified further opportunities to reduce cost there?

We have -- we're continuing to look at opportunities as we go, Nathan. I think we certainly have a very focused operational philosophy of how to build a truly efficient and effective global footprint. So we'll continue to look at -- to ways to optimize our operations. We'll have some improvements in our system so that the locations that we do have interact with one another more efficiently. We're going to continue to focus in main locations where we have the most leverage and a truly lean operational footprint. So I think the momentum is good, Nathan, but we did close one of our smaller facilities in the U.K. earlier this year as well. So as we've gone through the process -- and we did some of that last year, as well. So I think there are a lot of opportunities for us just to continue to optimize with our core facilities and tying those facilities together with an efficient system design so that we can be a true global player in the connectors business. Nathan Jones - Stifel, Nicolaus & Company, Incorporated, Research Division: That's helpful. And just to pick on the balance sheet for a minute. We've been in a suboptimal capital structure here for quite some time now. What are your focuses at the moment for the balance sheet? How's the M&A pipeline? And what are your thoughts about getting more aggressive on share repurchase?

Let me deal with the acquisition front. We continue to look very aggressively at acquisition ideas. As we've always said, acquisitions is going to be a part of our growth out into the future. So we've been investing heavily organically because we saw opportunities, and we've looked at the returns on these opportunities and you can see the benefit that we're getting from the organic investments that we've been making. So we'll continue to make organic investments. We've had some large ones last year and then this year, with some of the facility expansions that we've had underway. But as we go out into the future, acquisitions will be important to us. We continue to look at them. We continue to have aggressive pipelines. We've got some momentum going with it. But as you know, these things take time. They need to be actionable. You've got to find the right ideas that come through. I believe we've got the right focus on it. We've got the right people involved in it. And so it will be something as we go out into the future. We continue to look at balanced capital deployment, so organic is important to us. Acquisitions are important to us. We increased our dividend 10% in February, and so that was a nice return to shareholders. And then with share repurchases, we purchased shares last year, I think it was about $85 million or so we spent on share repurchases last year. And this year it's something that we'll look at, at the right point in time. But for right now, we like the opportunity that we're seeing organically and inorganically. Tom would you like to comment?

No, I think that's right, Denise. I mean, you look at the CapEx spending rates that we have this year, between 5% and 6% of revenue, so it's a fairly significant investment in our internal capabilities. And, obviously, we'd expect that level of investment to start to step down when we exit 2014 and get to a more normalized run rate. But this is a period of continuing the focus on these organic investment ideas. And what's nice about the organic investments and the M&A opportunities from this point is they're built on a solid strategic framework. So as we continue to kind of evolve our businesses organically, I think it's giving us better clarity and focus in the M&A pipeline so that we can really make sure that we have close-to-core opportunities to grow our businesses when we look both -- either through M&A or through organic investments.

Your next question comes from the line of John Inch with Deutsche Bank.

Let me say, based on where you are in your life cycle, I don't think share repurchase makes a ton of sense. So I agree with your strategy. U.S. and Canada was up 7, right? Was that because of -- are you just lumping Canada in with U.S.? Because Canada has been a source of weakness for, basically, most of the industrials. And, particularly, they site oil sands and so forth. So I'm wondering if you could comment on IP in Canada. I know Bornemann's got big exposure there. Just want more color on that region.

Yes, John, it's -- I think it's unique to us in Canada. We have seen some pretty good growth in the upstream markets. A lot of that's coming from Bornemann. So I think our ability to gain opportunities and share using the Bornemann brand capability is also helping us grow our Goulds opportunity set in Canada, as well. It's been a nice market for us but certainly not a call [indiscernible] on the overall economic activity in Canada. But I think it's a reflection of Bornemann share gains and bringing Goulds through that opportunity set, as well.

Yes -- no, that's right. But I mean, resource companies have called out Canada as a source of weakness. So you're actually growing in Canada, despite -- I mean, it sounds like you believe you're taking market share, right? Would that be a fair statement?

That's right, John. I think it's really about share gains with the technology and then really leveraging the channel opportunities that Bornemann has brought to us to really go after a new wave of opportunities. So I think it's very company-specific share gains but it is largely being built off of the activity the Bornemann has up in the Canadian oil sands.

SPX called -- talked about complicated oil and gas projects and pushouts. Could you maybe just help us understand a little bit what all of this actually means? Meaning, shouldn't we have known a few years ago what the nature of these projects and their more complicated nature would actually mean? This is -- it's not entirely clear because pump's not overtly a complicated product. So maybe a little more color on what exactly is -- what exactly are the bottlenecks in terms of this? And what actually happens if floodgates open, all of a sudden these projects get approved and you have to scramble a lot of stuff? Just how are you thinking about it and how are you planning for it? And just help us -- how does this actually pertain to your own product line?

When I think about the projects, John, the delays that we're seeing -- I believe, there's really 2 key factors into the delays. I think it does have to do with just slow economic activity and trying to figure out what that's going to look like as you got out into the future. And then I think it's also remembering that these projects are very expensive. And there's concerns from a cost perspective about how much these companies are actually going to have to spend when they put these projects into place. And I think that looking at -- you can talk about the Gulf Coast region, you can talk about some of the labor shortages that they have down there and the cost concerns associated with that. I think that just puts some concerns in peoples' minds that they're being extra careful and extra prudent before they start executing these projects. But the one thing that we are seeing is, say, why would we think that it's any different now than it was 6 months ago is because we are seeing some of these projects now being released to the EPCs. And we're also starting to see some of these EPCs that are now ordering longer lead time equipment, not pumps per se but longer lead time equipment for these facilities, which we believe is going to be a good sign, that the pumps are going to flow and follow from that. And that's really been in the oil and gas and petrochemicals side.

Yes, and I think the complexity within our portfolio certainly has increased, as you know, John. And that means the size of the pump, the capability that -- of the pump, the efficiency ratings, the ability to move liquids that are of different viscosities. So our complexity as a company has been increasing, which puts us in this category where projects are larger-sized, they stay -- they take longer to build, the length of our project time is extending out. And that's a little bit unique to our evolution and the investments that we've made moving up the complexity ladder. So it makes these conversations much more important to us because we have a bigger opportunity set here than we had in our past. And we're also coming up the learning curve and making more and more of these large complex pumps. It's an opportunity for future efficiency for us as we leverage the new Korea facility and make improvements in our Seneca Falls operation. So complexity is the name of the game, I think right now, with our growth. The geopolitical factors that we're seeing in places like Russia and Venezuela add to some of this uncertainty and, really, predicting order movements and when those orders convert into revenue. So that's another factor that as we move into these kind of pumps, we tend to see larger orders in those kind of areas. So it does add some additional uncertainty around timing of these activities.

Well, that's actually a pretty good segue into my other question. Wall Street loves the sound bite. So, right now, emerging markets are bad, yet Rockwell did a really good job in Brazil and you guys are above 15% in emerging market. So maybe you could just talk a little bit more about sort of your emerging market exposure? You mentioned Venezuela, Tom. Just sort of how you are able to work around macro? And why you think you're getting double-digit growth rates in regions that are obviously economically facing some pressures here?

In the emerging markets, John, where we put up good growth rates, that's really been focused on oil and gas projects, it's been focused in petrochemical and it's in China and the brake pad business that we have in China. So we think we are gaining share in some of these attractive markets where we play. How we've been focusing in oil and gas and petrochemicals is we've developed a broader portfolio, which allows us to meet more of our customer demands. Remember, we invested in Korea. And we've built out that Korea facility. I think it's 3x or 4x the one that we had in place before. And that's allowing us to be able to go after more of these larger complex projects in oil and gas and petrochemicals. And then we've also been building out some localized sourcing. We've been putting some assembly facilities in place and we've been building out our aftermarket. So we think that, that's how we end up gaining some of this market share that we've been going after over these past couple of years is by building out these capabilities that we have. And then, in China, when you look at China, we grew in China about 57% in Q1. But now that was -- a lot of that was due to our brake pad business, where we built our Wuxi facility and we've been building that out. And so we've been getting a lot of traction associated with the automotive market in China, which has been growing at very healthy growth rates and we've been taking share there. And then the IP business had a nice run in China, also, with the chemical market and some aftermarket capture and even some oil and gas wins. So China is a key part of our emerging markets, along with others. We expect China to be up about 20% or so in -- for the full year and its due to the businesses that I just indicated to you.

The final question is a follow-up from Matt Summerville of KeyBanc.

Just a couple of quick follow-ups. What was the mix of project versus aftermarket in IP in the first quarter of this year versus the first quarter of last? And then what do you expect it to be for the full year, please?

Yes in Q1, Matt, we had about 8 or 9 points more project revenue this year than we had last year. So a very significant tilt towards projects in Q1. We would expect that to kind of balance out a little bit over the course of the year. Now that is kind of dependent on one critical factor, which is we do expect the aftermarket and the baseline pump demand to improve as the year progresses. So if we're able to see that kind of improvement, that will bring the kind of rebalancing more in line. But at the end of the year, we still expect pumps -- large project pumps to be anywhere from 2% to 4% higher than where they were last year as a percent of our total mix.

And then with respect to Venezuela, can you just run through what your exposure is there, in terms of balance sheet, cash that's held locally and revenue?

Yes. So, Matt, we have about -- if we extrapolate a potential devaluation -- so just to give the perspective on the balance sheet and our assets in Venezuela, 100% deval right now would be about a $3 million or about a $0.02 EPS impact to us. Given the nature of what we do in Venezuela, obviously we're using the applicable rate but there's a lot of uncertainty as to the rate evolution over time. So at this point, we're using the appropriate and approved rate given the industries we're in. But we did a hypothetical 100% deval and that was about $0.02, as I mentioned. So that gives you an indication of the balance sheet. That comes from the fact that we've had a service and a local capability in Venezuela for years. So we've been operating in the environment for many, many years and we do understand and appreciate this volatility. What has been changing for us, what's new, is going back to that complexity comment. With Bornemann, they have the ability to go after larger projects in regions like Venezuela, where there's a different kind of crude oil mixture, and our Bornemann pumps -- multiphase pumps operate extremely well in those conditions. We mentioned last year, I think in Q3, that we had a $28 million project win in Venezuela. So that's one that's kind of a little bit different that than our typical run rate. And it has nice economic attributes to it that you would expect given the risk profile of doing business in a country like Venezuela. So it's a project that we watch as the year progresses to make sure that all the factors are in line for us to kind of move ahead with that particular project. But before we really transact additional business, we want to make sure that we're seeing good flows of payment and that can, at times, be a challenge. And the payments flows out of country can actually be something that cause us to delay shipments. So it's something we manage but it is a little bit bigger for us now than it was based on some of these Bornemann contracts that are coming through.

And then just one last one, on ICS. With respect to the product line repositioning into low-cost facilities, what do you anticipate the permanent structural cost savings you will get in that segment from this new wave of actions?

That's a great question, Matt, but it's hard to really put a clear line on right now because it's the multiple moves that we're making in rebalancing, even just beyond what we're doing with this set of activities. I think, as Denise mentioned, we've reached that 10% plateau. That was kind of a critical point. We have a nice 12% margin in Q1. I think it's really hard for us to kind of extrapolate how each individual piece will contribute. This is an important move, though. We do have a high cost structure in North America and we have a facility in Mexico that is a very efficient, well-run operation that we can continue to move production into. So we're going to pick up some very nice gains from that move. But there are many other moves that we are taking and actions that really improve the operational effectiveness of this business. So I'm hesitant to kind of pin it to a specific action but I think when you add it up, we have a nice momentum here that we're going to build throughout the course of the year. And I think, really, one of the questions will be -- maybe as we exit 2014, where do we then recast the entitlement for ICS, once we've really put all these pieces in motion.

At this time, there are no further questions. I will now return the call to Denise Ramos for any additional or closing remarks.

Well, let me just thank everyone for joining us on the call today. As you've heard this morning, we are very pleased with our Q1 performance and how we have been able to once again deliver on our commitments and move our strategy forward. This is the result of focus and strong execution and we'll continue to create ongoing long-term value for all of our stakeholders. So I look forward to updating you on our progress next quarter. Until then, thanks very much.

Thank you. This does conclude today's teleconference. Please disconnect your lines at this time, and have a wonderful day.