Good day, ladies and gentlemen, and welcome to our Fourth Quarter 2013 Mettler-Toledo International Earnings Conference Call. My name is Jay, and I will be your audio coordinator for today. [Operator Instructions]. I would now like to turn our presentation over to your hostess for today's call, Ms. Mary Finnegan. Please go ahead, ma'am.

Thanks, Jay, and good evening, everyone. I am Mary Finnegan. I'm the Treasurer and responsible for Investor Relations at Mettler-Toledo. I'm happy to have you on the call tonight. I'm joined by Olivier Filliol, our CEO; and Bill Donnelly, our Executive Vice President. I want to cover just a couple of administrative matters before we get started. This call is being webcast and is available for replay on our website. A copy of the press release and the presentation that we'll -- we will refer to in today's call is also on the website. Let me summarize the Safe Harbor language, which is outlined on Page 1. Statements in this presentation, which are not historical facts, constitute forward-looking statements within the meaning of the U.S. Securities Act of 1933 and the U.S. Securities Exchange Act of 1934. These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. For a discussion of these risks and uncertainties, please see our discussion in our recent Form 8-K. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under the captions Factors Affecting our Future Operating Results and in the Business and Management Discussion and Analysis of Financial Condition and Results of Operations in our 10-K. Just one last item. On today's call, we may use non-GAAP financial measures. More detailed information with respect to the use of and differences between the non-GAAP financial measure and the most directly comparable GAAP measure is provided in the 8-K. I will now turn the call over to Olivier.

Thanks, Mary, and welcome to everyone on the call. I will start with a summary of the quarter, and then Bill will provide details on our financial results and guidance. I will then have some additional comments on 2014. As always, we will have time for Q&A at the end. The highlights of the quarter are on Page 2 of the presentation. Local currency sales increased 3% in the quarter with solid results in the Americas and Europe. As expected, demand was weaker in China, but was offset by better conditions in other regions of Asia / Rest of World. Similar to what we have achieved all year, we had another quarter of gross margin expansion, which, combined with the benefit of our cost control initiatives, drove a solid increase in operating profit and earnings. I'm pleased with the 10% increase in earnings per share in the quarter, given the modest sales growth. As we turn to 2014, we are cautiously optimistic on the developed world, as it appears our markets have stabilized. We expect emerging markets to improve as the year progresses, largely based on easier comps. Bill will provide additional details on our updated assumptions for 2014, and I will have some additional comments on our growth initiatives for this year. Let me now turn it over to Bill to first cover the fourth quarter financial results.

Thanks, Olivier, and hello, everybody. Let me start with sales, some specifics there. We had sales of $684.3 million in the quarter, an increase of 3% in local currency. On a U.S. dollar basis, sales increased by 4%, as currencies benefited sales by approximately 1% in the quarter. Now turning to Page 3 of the presentation. We outlined sales by geography. In the quarter, local currency sales increased by 8% in Europe and by 2% in the Americas. Asia / Rest of World was flat as compared to the prior year. Without the impact of exited product lines, Asia / Rest of World increased by 1% in the quarter. For China specifically, local currency sales, excluding exited product lines, declined by 5% in the quarter, modestly better than expected as compared to the last time we spoke. Exited product lines contributed a further 2% decline in China sales for the quarter. On Slide #4, sales growth by geography for the full year is summarized. In total, local currency sales increased by 1% for the year, with a 3% increase in both Europe and the Americas, while Asia / Rest of World declined by 4%. Sales growth by product line for the quarter is highlighted on Slide #5. Laboratory sales increased by 6% in local currency, while industrial increased by 2%. Adjusting for product line exits in China, industrial sales increased by 3% in the quarter. Food retailing declined by 4% in the quarter. The next slide shows results for the full year. In laboratory, our sales grew by 3%, while they declined in industrial by 1%, and food retailing increased by 1% for the year. Turning to the next slide, let me walk you through the key items on the P&L for the fourth quarter. We're very pleased with our…

Thanks, Bill, and let me start with summary comments on business conditions. Lab increased 6% in the quarter with very good growth in Europe and Asia / Rest of World, while Americas also had good growth. We had growth in all major product areas, with particular good growth in Balances, Analytical Instruments and Process Analytics. For the year, lab increased 3%, and I continue to feel good about our market position. Industrial increased 2% in the quarter, with Product Inspection up double digits and core industrial down mid-single digits. We are very pleased with our Product Inspection growth, which reflects our strong presence in this market. The decline in core industrial is driven by Asia, particularly China, and we also had a decline in core industrial in the Americas. In Europe, core industrial was roughly flat. For the year, industrial was down 1%, with Product Inspection up single -- mid-single digits and core industrial down 4%. Retail was down 4% in the quarter and up 1% for the year. Now let me make some additional comments by geography. Europe was up strongly in the quarter with an 8% growth. While comparisons were easy, we were pleased to see solid growth in most countries. For the year, Europe had growth of 3%. Americas was up 2% in the quarter, with growth in lab and Product Inspection offset by declines in core industrial and retail. For the year, Americas increased 3%. Asia / Rest of the World was flat in the quarter. The decline in China, which Bill already mentioned, was offset by strong growth in most other regions. For the year, Asia / Rest of the World was down 4%. That covers my comments on the business, and now let me make some comments on 2014. I would characterize our outlook…

[Operator Instructions] Our first question comes from Paul Knight with Janney Capital Markets.

This is actually Bryan Kipp on behalf of Paul. Just want to start off here on the margin front. In the past, you guys alluded to 50 to 100 bp margin expansion on the op margin and just kind of want to get the color on that. With the 150 in the past, 150 on price, obviously, you have some headwinds there with SG&A variable comp. I'm just trying to get my head around what do you expect. Do you expect it to be more flat with that pricing leverage, or you think it's -- you have some opportunity for upside there?

In terms of our margin for -- margin expansion for 2014, I think we should have something approaching 50 bps. I think, at today's exchange rates, it might be slightly less than that, but something in that range is realistic. And that would probably be a little split between what we do in margin, gross margin and operating margin. But I think we feel pretty good that we can have further gross margin expansion next year.

And just probably leveraged more to the back half like historicals, or do you think that's changed?

So we -- and maybe the way you posed your question, I think, actually, we tend to look at it Q4-on-Q4, Q3-on-Q3. And this year, our -- in the second half, we had a little bit less expansion on the gross margin line than we did in the first half of the year. I think, sitting here at this stage, not quite knowing how things will play out exactly, I'd see no reason why the gross margin should have as big a delta. I think we'll have a gross margin expansion in the first quarter. It might be a little bit better in the second half of the year, but I don't think it's going to make such a difference quarter-by-quarter as it did this year. Prices[ph] went into effect in January so that's, of course, one of the bigger levers. In terms of cost measures, those might be realized more gradually through the year, but that would probably be my main comments.

Okay. Appreciate it. And just a quick follow-up on China as well. Last time, you guys alluded to a leading bottler business. Potentially, it's growing extremely fast and a potential opportunity for you, all, and additional capacity utilization potential out in China. Are those -- do you still see excess capacity there? And the potential of that bottling business, is that ongoing?

So in terms of the overall business in China, I think that it's -- of course, we weren't so happy to see the recent PMI numbers. We would comment that we saw some -- if I look at fourth quarter growth in our core businesses, actually order entry was pretty good. Our order entry was up mid-single digits with many of the businesses actually doing better than that and retail actually being down. In January, the numbers were a little bit more mixed, so it's tough to judge because of how Chinese New Year and everything falls. But I think, at this stage, we're kind of feeling that, in the current cycle, it's kind of bouncing along the bottom now. If new headwinds come from something else in China, it could -- or tailwinds for that matter, it could change that. But I think we kind of cautiously feel that what we've predicted to you guys, we would see evidence that things are moving in that direction. Now with regard to the bottling reference, I think we did mention, for example, last quarter, I think it was last quarter that there was some big expansions in that area. I wouldn't want to over-exaggerate that as a key end market for our business today. It's a market that we serve. And I think we were more commenting as an example of people in certain sectors, particularly those closer to the consumer economy, are making more investments and that's maybe just as an example of that. I think that we still have a long way to go to kind of convert the economy because that's where the majority of the spend is. But I think, step-by-step, we're moving our business there. As you know, sometimes transitions aren't totally smooth, but we think that we're very well positioned for these kind of consumer markets with food, pharma, cosmetics, et cetera. These are really markets we have excellent positions in, and excellent application knowledge, and we should be able to compete very effectively in China.

What we are also saying was that is in China, we will have to differentiate more than probably in any other markets segment-by-segment. We see certain industry segments that it will take years until the overcapacity has rebalanced, and we're going to see good growth again. I think we mentioned in previous occasions, for example, the cement industry, the steel industry and so on, these are very difficult segments because they are also related to infrastructure. And then there are other industry segments like the food industry, life science industries and so on, that we perceive as much more attractive and have better growth potential. And also, geographically, we see differences. For example, there are multiple second-tier cities that we have good growth in Q4 and expect, actually, also good growth in 2014. We need to tap fully in these opportunities, shift resources towards that, and that will help us. But this differentiation by segments is particularly important in China and reflects the current economic state of that country.

The next question comes from the line of Tycho Peterson with JPMorgan. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: So maybe just following up on the last ones on China specifically. I mean, it sounds like you're confident in the second half of the year recovery. Could you maybe just talk about, I mean, what your overall expectations are for the full year then? Have they changed since you guided last quarter?

So, hey, maybe what I -- just to clarify a little bit what I was trying to say, Tycho, is I think we provided a certain guidance that, hey, we would expect a decline in Q1, flattish in Q2 with some mid-single-digit growth in the second half of the year. I think everything we've seen so far would say that, that path is very realistic. At the same time, I want to put it in perspective, it's a relatively short cycle business. So if I have -- I probably have a handful of orders that go into the second half of the year. But we think, based on the order trend we saw, what we view as our outlook for the first quarter, where we have a little bit more certainty on, we think that, hey, things seem to be moving in that direction. And I guess, I think that was kind of your question, or did I miss part of it? Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Yes. No, that -- that's helpful. And then as we think about where the growth will be coming from, in China, you talked about food, pharma, environmental, I mean, do you need to invest in any of the channels there? And maybe just talk a little bit about globally, where you're making selective reinvestments for this year?

Okay. So related to China, it's about -- we saw shifting. It's not that we need to do net investments. It's really moving the emphasis on different segments, different applications, so no specific investments. Most of the investments that we have initiated as turbos here went actually to the developed markets. These are certain territories that might have been under-penetrated, and we feel that we can gain market share and growth by having additional field resources. Sometimes, it's also initiatives, like we see good growth opportunities for service in Product Inspection in U.S., and we dedicate more resources to that. So it's actually really broad-based. I mentioned on -- in prepared remarks, more than 45 projects. So you can imagine these are many small projects, sometimes just 1 resource, sometimes it's 10 resources. It's about developing organic growth opportunities together with the countries, together with the strategic business units. And in the past, we were more focused towards emerging markets. This time, more focused to developed markets. The reason certainly is that we have been very selective in resource allocation in the West for many years. Now we feel we see a stronger development in the West, and we want to tap in that opportunity. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Okay. And then, Bill, can you just break out gross margin contributions by price, material costs and mix? Then I'll hop off.

Okay. So in the quarter, we had a 200-basis-point net realized price increase, and our material costs were down 240 basis points. In terms of the impact that, that had on gross profit margin, the 200-basis-point price increase was about 90 bps on the gross margin line, and the 240 bps on material cost translated to about 60 bps on the gross margin line.

The next question comes from the line of Brandon Couillard with Jefferies.

Bill, just want to make sure I understand some of your comments right. It looks like currency was a little worse, both in the quarter and in terms of the full year '14 outlook. Looks like it was a couple of pennies, perhaps, in the fourth quarter and maybe as much as $0.10 negative to the full year view. Can you quantify that delta for us?

Quantify it in terms of how much by currency or quantify it in which sense?

In terms of the incremental EPS impact from currency.

So as compared to the guidance that we gave for full year 2014, I think the number is between $0.05 and $0.08, the incremental.

Incremental.

Incremental is $0.10 to $0.12. Okay. Sorry. Mary corrected me. And then in terms of the impact on the fourth quarter, it was $0.06 per share. But that's versus the prior year. In terms of versus what we guided, I think it was -- and Mary is looking it up.

And it was pretty much on the top[ph] .

Pretty much -- yes, fourth quarter wasn't too far -- in terms of the EPS impact, it wasn't too far off what we expected.

Got you. And then when I look at your first quarter organic growth guidance of about 3%, if you look at it kind of on a 2-year stack, you're lapping the easiest comp of the year. It implies a bit of a deceleration. Is that a reflection of perhaps the order trends that you've seen in January? Could you give us some color there? And to what degree was there any budget flush effect in the fourth quarter?

So hey, it doesn't relate to what we see order-wise in January. I would comment that actually we enter 2014 with a healthy bit more backlog than we entered a year ago. As you know, sometimes, we are -- we overdo it with our stacked comps, so I -- Mary is providing me here our 1, 2, 3, 4, 5 years -- 3-, 4- and 5-year stacked comps. If I look at, for example, 3 years, the 3-year stacked comp based on our current estimate is 8% for the 2014. And by quarter, it moves between 7% and 9%, our current forecast. So I see what you are saying, but I think we -- we think the 3% would be a good number. And now I'm really getting into details. But if you go back, you'll see, and I am not recalling the exact amount, but that we took down backlog in the Q1 last year, and particularly projects in China. And that was something I commented on, although I don't recall off the top of my head how much that was in Q1 last year. But I know we talked about it on the call.

The next question comes from the line of Dan Arias with UBS.

Bill or Olivier, maybe just a question on China. Can you sort of update us on how things looked with regards to facility expansion, which I think you've kind of talked about as being a source of weakness there? Are you starting to see some movement there? And I guess, is the dynamic one where there are projects that are being planned, but not executed on, and it's sort of just an on-hold type situation? Or do you get the sense that activity just in terms of really thinking about new plans is -- or new plants is off the table?

I think the topic in general is about capacity expansion, that we see our customers still being very selective. I think that's still a topic. What we saw last year, in particular, was often that international brands, global companies were very cautious. I start to see that things are gradually improving. But I would also recognize that the uncertainty that came up again in the last few weeks will -- could have an impact, and we need to monitor that. So that's certainly a reason why we'd say, "Oh, we remain cautious," and I -- it's probably too early to really see a clear trend change that we would see again these investments coming back. But -- and with that, I think it takes also more time to get back to this double-digit growth that we experienced in China before. It's going to take new expansion projects through -- for us to really have this double-digit growth. But gradually, it's kind of coming back. Yes, I would give that flavor. I think it's difficult to be too specific here. I wouldn't have hard data, how many new facilities we really see being built in our customer base.

Okay. Maybe just sort of a bigger market question. You guys have talked about the fact that your markets are pretty fragmented in several areas, and that kind of gives you a bit of an opportunity. Can you just remind us which of the businesses or which of the markets have the greatest number of low share, maybe local players that are either more favorable to compete against or have M&A potential, just sort of how you're looking at the fragmentation over all the market?

Okay. So if I thought of business like -- so the lab business is the most global one and the most concentrated one. This would be particularly true for Balances. In Balances, there is only very few players that operate on a global scale, and the 2 top players have major market shares. When -- the one that would then be most fragmented is the industrial business. For industrial business, you have a lot of local players specific to country, sometimes, regionals. And this would be particularly true for -- in -- for China. In China, we would have hundreds of scale companies that would compete with us. When -- in terms of consolidation opportunities and market share opportunities, I think our market share gains that we realized over the years was across all the businesses. It was against global competitors in lab, but it was also true for the industrial business, where we won market share against local competitors, i.e. we are in mature markets. It's -- and we don't see these major shifts. We, from time to time, see that smaller players might get out of the business, but I haven't seen a particular acceleration of that in the recent months, quarters. In terms of acquisition and opportunity for us to buy competitors, this is not a high priority. We feel we have a very strong product portfolio. We have definitely a very strong global presence. There are a few selected opportunities in countries where we might consolidate. I would remind here that a few years ago, we bought the biggest liquid handling company in U.K. that allowed us to become a leader in pipetting there. But these are relatively small acquisitions and very selective. We don't have an M&A strategy focused on acquiring competitors. And yes, I think, the examples that I gave, however, for certain local markets, yes, we might do that, but it's relatively small.

The next question comes from the line of Jon Groberg with Macquarie.

Maybe just following up on that last question a little bit. I noticed you didn't want to buy competitors, wasn't really your strategy, all of you[ph] . But if you look at product verticals and you kind of evaluate how you're doing relative to competition and just how the markets are growing, everything else, is there anything that would make you kind of rethink your strategy a little bit and do something else to boost growth in certain of those product verticals?

M&A is definitely part of our strategy. The only thing that I would say here is that we are looking at adjacencies and product categories that would complement the portfolio. They are -- our focus is there, mostly on the lab and Process Analytics and our Product Inspection businesses, where we have very strong positions, we have excellent brands, we have excellent customer access, we have excellent service organizations, and we feel by adding adjacent product categories, we can leverage these strengths. And we did that, for example, just a few years ago by acquiring Vision Inspection for our Product Inspection business, very complementary and, in that sense, also very strategic. Our M&A strategy is focused towards these opportunities.

And I guess my question was so, along those lines, do you -- just kind of slower growth over -- or if it kind of spills into 3 years or so. Does that make you more inclined to be more aggressive there, or doesn't really change kind of how you go about looking at the -- at those opportunities?

No. Actually, we have so much more opportunity for organic growth, and I feel actually really good how we performed over the last years and on that one too. We had a more difficult market environment, but we still -- we are winning market share. We expanded our margin. We want to continue to be very focused on this organic growth. However, M&A is part of the overall strategy, and I am very open, and we proactively pursue and nurture opportunities along the lines that I've described before. But it's not that we've become more aggressive in terms of M&A because we are coming out of a more difficult economic environment.

Okay. That's helpful. And Bill, if you -- on your -- kind of your comments around the variable comp and the increased amortization, et cetera. I mean, if you just put in -- can you help me -- help us maybe just put that in a little bit more context? As for example, in '13 on 1% local currency growth, you guys grew your EPS 9%. Your guidance is 3% to 4% organic growth for '14, and also the midpoint is 9% EPS growth. So just maybe -- if I was to put it -- if you were to grow 1% to 2% as opposed to 3% to 4%, what would that mean in terms of what you think you could do from an EPS standpoint?

Okay. Maybe I don't want to speculate on such a precise number, but maybe I'd answer your question this way, Jon. I think, to the extent that we would exceed 3% to 4% growth, you'd probably see our incremental margins being in this 30% kind of range, maybe a little better, depending on how much we exceeded it, that you've kind of seen in the past. I think if you look at our incremental margins in 2013, they're very high. And I think, as an organization our -- we -- and that was achieved by large -- in a large part due to restructuring efforts that we had done. And I think, right now, organizationally, we're still kind of digesting that. It's not that we will never be able to do other cost measures again in the future. But I think just completing the ones we have already underway would make it -- in 2014, making those all sustainable as it translates to us realizing we don't want to organizationally start a new round of them right now. We need to digest and make the current moves we've made sustainable.

The next question comes from Isaac Ro with Goldman Sachs.

It's actually Joel Kaufman in for Isaac. Can you guys just address the impact, if any, the recovery in Europe is having on the various margin lines?

So certainly, we have a nice mix of direct sales in Europe, and Europe has a slightly more weight towards the laboratory side of the business. It's also, because it's a direct sales organization, it has a high percentage than our other regions. You have more commission, so some more variable comp in that element, too. From an operating profit perspective, kind of looking at it from a see-through basis, our European entities are kind of in line, I would say. Even though the gross profit margin is higher, their actual profitability and op margin line is not above the corporate average.

Great. And then just turning to U.S., can you give us some color around the visibility and assumptions for the spending environment for capital equipment as you move through 2014?

Could you repeat that again? Sorry, you broke up a little bit.

Yes, no problem. Just regarding the U.S., could you give us some color or visibility on your assumptions for the spending environment for capital equipment in 2014?

So I think the majority of the products we sell are capital equipment to our customers. And so we would expect somewhere between low- to mid-single-digit growth in our U.S. business. Overall, maybe service could grow marginally better than that, but something in that kind of range. If I think about the different business segments we serve, we're probably expecting the lab stuff to do a little bit better than the industrial stuff in the U.S. market. With the exception of our Product Inspection business, I think we have actually quite good hopes for those products from an industrial perspective in the U.S.

The next question comes from Dan Brennan with Morgan Stanley.

Did you provide your bookings growth overall and by region? If you did, I apologize, but could you just give us that?

Sure. We had better order growth than we did sales growth by about 2%. And I did mention earlier in the call that the Chinese number was quite a bit better in the month -- or in the fourth quarter. January was a little bit more difficult to read. It wasn't as strong of a number, but it's kind of tough to judge. I think for some of you who we've talked to lately, our view on Q1 in China is you got to get to the end of the quarter to really see where the trend is. There's kind of funny impact of the Chinese New Year, and sometimes, how the government treats it differently makes it kind of hard to compare the months of January and February individually. But our view would be by the end of March, we'll have a better read on the Chinese market. But at least what we saw in the fourth quarter was -- pointed to a turnaround. They finished with good order growth, more backlog. January, it's tough to conclude on.

And how about as it relates to the U.S in January, though? Just given the weak number so far, did you see any impact in your business thus far?

You mean the weak PMI numbers?

Yes.

Hey, we actually had pretty good start to the year, but I want to preface that by saying we also went live on Blue Ocean, as you know, in the fourth quarter, and that -- there could -- how much of that could be some push out as a result of that, it's tough for me to judge. And I also -- I would caution everybody on the month of January, I don't know about for all our peer companies, but certainly for us, it's not a great data point. It's, by far, the smallest month of the year. And then -- so therefore, 1 order, 2 orders in a region can kind of make the difference. I think -- yes, I know, for example, our China number, we have a big comp in China because of 1 order in Q1 -- or January of last year.

And then maybe just another -- just a couple of quick ones. Within China, can you just give us some color on the core industrial business in China? You're maintaining your outlook as pacing through China in the year, but how does core industrial look, specifically, how they do in the quarter? Any color on that, or the outlook for '14?

Sure. Mary is pulling together some sales numbers. I just know by heart that the core industrial order entry growth was positive. I think it was about mid-single digit in the fourth quarter. The actual sales number was down, let's call it, low-double digit in the quarter. I mentioned that we finished the year with -- for China, a good increase in backlog. Almost all of that relates to the core industrial business. That's the longest cycle business that we have in China.

And maybe just one final one, just on emerging markets outside of China. I mean, obviously, there's been a lot of volatility with currencies. Is it just amongst your biggest emerging market countries? Can you just give us some flavor there, kind of are you seeing any impact from some of the unsettling trends? And what's kind of implicit in your 2014 guidance for EM x China?

Hey, actually, if I look at Q4, we have pretty good numbers in other emerging markets outside of China, like India, Southeast Asia, Brazil, Eastern Europe. They did all, actually, well for us. The countries where there is lot of potential right now, like Argentina and Turkey. In Argentina, we go through a distributor. Turkey, we have our own presence, but it's actually rather small, so our exposure is not that significant. And as mentioned, Turkey is more a buildup, so I think we are still going to do reasonable. Brazil, we did actually well in Q4. I think we have a really, really strong team there, a good development. But obviously, the market itself is challenged more. The recent events bring more uncertainty for us, and that's never good for us. But overall, I think, actually, these other emerging markets will do quite reasonable for us in 2014.

The next question comes from the line of Derik De Bruin with Bank of America Merrill Lynch.

It's Rafael in for Derik. I may have missed this, but can you provide us with the local currency sales growth expectation by the various segments, and also just your expectations in terms of price, volume and mix?

Sure. So maybe, I get the last one out first. So we would expect net realized price increases in the range of 150 bps in 2014. That's, I think, in some ways, an ambitious target in the sense that we want to -- we, at this point, see no reason that we could justify a midyear price increase, so achieving that through this January 1 increase will mean good -- requires good execution. In terms of our expectations for how to break down that 3% to 4% guidance for the full year of 2014, we would see probably lab in the, I don't know, 3% to 5% kind of range; Product Inspection, maybe high-single digits; core industrial, probably low-single digits; and then, hey, food retailing, probably low-single digits as well.

Okay. Great. And just another follow-up. On the prepared remarks, you were talking about the Shanghai free-trade zone, a pilot program. And I was just wondering if this could be a source of upside. I was wondering if you could comment with regard to as to whether there are other competitors in your field and part of this pilot program, and I guess how you see that unfolding in 2014 and into 2015.

I've seen the list of 20 companies, and there was no direct competitor. There might've been one of the larger, industrial guys that we might have some minor -- actually, yes, I didn't even think that. But -- so there's definitely not any of our direct competitors that are in that 20. In terms of the benefits to us, we definitely are happy. This will be beneficial to us, but it'll take some time. It's just that the program is just being rolled out. The government is laying out their processes, but we're going to -- we're already working on some of the business process side, systems-wise, to be ready for that. We've kind of figured out our legal entity structure. We're looking at our warehousing capabilities in the region. I would say that beginning next year and then through 2018, we kind of ramp things up. That has a little bit to do with how we see moving business there around other tax holidays that we enjoy in China and our ability to -- what's the right timing to do that. But we think it can be a meaningfully beneficial thing. And I think a comment we might have made to investors recently, but in general, or I don't know if we've had it on the last call or just in recent conversations, is one thing that we like about this free-trade zone is we think this very much speaks to China trying to acquire more foreign direct investment. As you guys know, that's been dwindling off a little bit in China. We were talking a little bit in our board meeting that U.S. foreign direct investment now, there's higher foreign direct investment in the United States now than there is in China. And these are the kind of activities. I know it's financially attractive for us to invest in this Shanghai free-trade zone as they expand into a broader group, which is clearly the intentions. We think that these are the kind of positive signs they can do to help foreign direct investment. And maybe, as a reminder, there were some things that China did a few years ago that kind of went in the other direction, that maybe discouraged foreign direct investment, in their efforts to try to manage some of the potential for bubbles in parts of their economy. And I think that, that took a while to have full effects, but maybe this will take now a while to have some positive effects on it.

The next question comes from Richard Eastman with Robert W. Baird. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: So could you just speak to -- we faced these credit issues in China for pretty much the balance of a year now. Is there any regional difference in credit conditions that you've seen emerge? Olivier, you talked about some of these smaller second-tier cities, but is there any use of credit to drive investment and demand in those second-tier cities?

So I think when we talked about some of these businesses we exited, I think one of the principal examples we gave is some of these second, even really third and fourth-tier cities, where there were projects out there that, in effect, they were asked -- we used to get significant advanced payments in these type of vehicle business. Now they were looking for a 5-year financing and stuff. So those some of the businesses that we've walked away from are related to kind of regional-specific financing. So if I look at kind of how we view the overall situation from a credit point of view, we see it not deteriorating. We -- not that it's gotten better, but we just don't see it deteriorating. As an example, I think our DSO now has kind of been stable recently there. I think it's -- certainly, there is parts of the market that have gotten tougher because of credit conditions. But we, in our discussions with the field guys, we don't view this as something that's getting incrementally worse right now. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: So then they're not using credit availability to reapportion investment into these consumer-facing industries in those markets versus getting even tighter on the infrastructure side, or is that too tight to cut?

Well, I think, hey, I would tell you at -- in some conversation, but I would struggle to point to economic data. But certainly, there are favored industries that the government is supporting more than others, and that would be an impression that we have. I think that for our business, the majority of our core business is still people that are financing things themselves, whether they be multinationals or even the larger Chinese national companies. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then maybe just a question about the service and the consumables side of the business. When you look at '14, is it -- it sounds like some of your field resources are going into the service, and I know that's been a Spinnaker focus for a while as well to try to improve the productivity on the service side. But is that -- can I think of services and consumables as maybe a mid-single-digit grower in '14? Would that be a reasonable target?

I would expect that service is growing above the group average. So in that sense, getting close to this mid-single digit. It did actually also quite well on -- in 2013. I think that's very much a reflection of our strategy and the many initiatives that we have on that business. This was -- yes, definitely true, and actually, if I look at 2013, we reached service and consumables together to 29% of total. That shows we are moving in the right direction, and I would expect in 2014 that this ratio will go up even again. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: And is that -- when I look at the residual piece then, basically the hardware, are we able to get our 1.5 point price on hardware?

Sure. On -- in average, that's true, yes. What I would stress is, of course, there are differences by different product lines. Retail, for example, is extremely difficult. Core industrial, I would say, also. But when I look at lab and Product Inspection, we have very good pricing power. And so for these businesses, I expect more than the 150 bps, and for retail and core industrial, less. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: And is it just fair to assume if you take the services/consumables cut and then the hardware cut that essentially, in your guidance, they're certainly at the 3% core growth rate, that you're basically thinking flat volume in hardware; mid-single digit, service consumables, and so any upside to the 3% to 4% guide is probably going to be more determined by the hardware market globally?

Yes. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. So that's where the -- I don't want to say risk, but that's where the upside would reside?

Yes, yes. It's part of this also more volatile. It's -- the service is more stable. And typically, when we grow nicely, you're going to see that we might actually grow faster with products than with service. And when the economy is weaker, service will outperform product. But over an economic cycle, I would expect service to do better than product. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. And I think maybe just one last question. When you were commenting in your comments about new products, is -- your TOC new product is portable? Is that a market niche that you were not in previously, or were you in there with a bench-top product and this is portable, or is that a new kind of...

No. Our core in -- with TOC was really in line, and what we are offering here is now a portable at-line instrument, actually. And the portable instrument allows you to move from 1 measurement point to another, but it's not a lab product. It's not one that you measure in the lab. It's really at-line.

The next question comes from Steve Willoughby with Cleveland Research.

Just 2 things real quick. One, I was wondering -- given a little bit stronger growth in the lab business, was wondering if you could comment regarding how much of a budget flush you saw, if any? Maybe another way to ask is kind of the pacing through the quarter?

Hey, it's -- they don't -- I'm not being sarcastic. They don't necessarily come with a red flag on them kind of saying this is a budget flush order. So it's a little bit -- maybe I -- you saw that the lab was good, so we think we had a reasonable budget flush period. I think the product categories that might have benefited a little bit more than others were lab balances, kind of picked up at the end. We didn't see as much in maybe AutoChem, some of the higher-end stuff than we might have hoped in that category. And I think it was most of the guys that kind of finished a little stronger than expected were more in Europe than in the United States.

Okay. And then just like last thing is on the variable comp comments, where there wasn't variable comp this year, and you are expecting a variable comp next year. I guess, when did -- in 2013, when did it get to the point where you ended up not having a variable comp? I'm just curious if in the fourth quarter was there some sort of benefit where you were accruing then all of a sudden you had reversed that, or how does that kind of work?

Yes. I think -- I could -- I think even since the beginning, after the first quarter when we saw the -- I believe we had a minus 2% sales growth in Q1, if I recall correctly. I think, at that point already, we were -- we started to get nervous in terms of how that might flow. I may be now trying to digest some numbers here, and I would say that, hey, maybe in the fourth quarter was probably the lowest amount we accrued of the -- as opposed to being at straight line. But it's not so materially different.

The next question comes from the line of Sung Ji Nam with Cantor Fitzgerald. Sung Ji Nam - Cantor Fitzgerald & Co., Research Division: Just 2 quick high-level questions here. Was wondering if you could -- given you're seeing more stabilization in the developed markets, was wondering if you could provide more color in terms of where the biggest drivers of growth there. Is it more the leveraging the product replacement cycle, expansion into adjacent markets or taking market share?

Both. The improved environment helps us mainly on the replacement business. The replacement business, I see it coming back to historical levels, as in weak economic environment, people were holding back on replacement. So that's the key driver for us expecting better growth. I would also see selected investments in the West, in automation, higher quality measurement points and so on that will benefit us. Sung Ji Nam - Cantor Fitzgerald & Co., Research Division: Okay. And then last one. Maybe if you could talk about how important your tiered branding strategy is in China as you're trying to expand into the lab market, or is it more relevant now for other emerging areas?

I didn't pick up the first part of the statement. Sung Ji Nam - Cantor Fitzgerald & Co., Research Division: Just the tiered branding, the dual branding strategy?

Oh, the dual branding, sorry. The dual brand strategy is very established for us in the West, in particular in the U.S. In China, we are still investing and strengthening the dual brand. So for example, the dual brand, we really expand the dealer network in China. We had good developments on that, and we're going to continue to leverage that. It's -- we will really also want to penetrate markets that we would not be present with the Mettler-Toledo brand with our direct approach. And so it's very relevant in our strategy and the core also in China.

The last question in queue comes from Greg Halter with Great Lakes Review.

I thought I heard a figure thrown out about the service and consumable business. Was it mentioned that it's 29% of your total revenues, or did I hear that wrong? And that's for the year.

Yes. For 2013, it was 29%.

And what kind of growth did it experience?

5% growth for the year. And in the fourth quarter, it was 4%.

All righty. And the one last one I have here is can you provide the metrics for the share repurchase in the fourth quarter, number of shares and the dollars spent?

Sure. We repurchased 317,179 shares at an average price of $244.52 for a total amount expended of $77.556 million.

There are no further questions in the queue.

Thanks, Jay, and hey, thanks, everyone, for joining the call. I know we went a little longer tonight, but I think we answered everything. Of course, if you have any other questions, please don't hesitate to give us a call. Take care. Thanks.

This concludes today's conference call. You may now disconnect.