Good morning. My name is Shelley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pentair Q1 2013 Earnings Conference Call. [Operator Instructions] Jim Lucas, you may begin your conference.

Thanks, Shelley, and welcome to Pentair's first quarter 2013 earnings conference call. We're glad you could join us. I'm Jim Lucas, Vice President of Investor Relations. With me today is Randy Hogan, our Chairman and Chief Executive Officer; and John Stauch, our Chief Financial Officer. On today's call, we will provide details on our first quarter 2013 performance as well as our second quarter and full year 2013 outlook, as outlined in this morning's release. Before we begin, let me remind you that any statements made about the company's anticipated financial results are forward-looking statements subject to future risks and uncertainties, such as the risks outlined in Pentair's 10-K for the year ended December 31, 2012, and today's release. Forward-looking statements included herein are made as of today, and the company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Actual results could differ materially from anticipated results. Today's webcast is accompanied by a presentation, which can be found in the Investors section of Pentair's website. We will reference these slides throughout our prepared remarks. All references today will be on an adjusted basis, unless otherwise indicated, for which the non-GAAP financials are reconciled in the Appendix of the presentation. We will be sure to reserve time for questions and answers after our prepared remarks. In recognition that there are other calls this morning, we will target it to be done in 1 hour.[Operator Instructions] I will now turn the call over to Randy. Randy?

Thanks, Jim, and good morning, everyone. Let me begin with our first quarter performance on Slide 3. This marks the second quarter for Pentair since we successfully closed our merger with Flow Control at the end of September last year. I want to note straightaway we're very pleased with the progress we've made on integration and the momentum we've been building. Before I go through the first quarter results in detail, I want to note that we will be discussing our operating results on an adjusted basis to better address the core operating performance of our businesses and referring to 2012 on a pro forma adjusted basis to provide a more accurate apples-to-apples comparison that includes Flow Control in the results. You will find reconciliations of this for overall Pentair and the segments in the appendix at the end of the presentation. With that, here are the numbers: First quarter revenue grew 1% on an organic basis but was flat as FX was a 1% headwind. Adjusted operating income grew 4%, while adjusted operating margins increased 40 basis points to 10.1%, as price and productivity once again more than offset inflation. Adjusted EPS grew 7% year-over-year, coming in slightly higher than our expected range at $0.58. Free cash flow for the quarter was a usage of $29 million, in line with our seasonal timing. We believe we're on track to deliver full year free cash flow of greater than 1% of net income once again. The top line and adjusted operating income were in line with our prior guidance. We made good progress in executing the action plans to deliver the $90 million in synergies we outlined in November, and John will discuss that we've now increased synergy expectations to $100 million for the full year. In addition, we completed…

Thank you, Randy. Please turn to Slide #10, labeled Q2 2013 Pentair Outlook. For Q2, we are initiating revenue guidance of up 3% to 4%. We expect the revenue contribution to remain mixed and, again, led by Water & Fluid, which should be up 5% to 7%. We continue to see high single-digit growth in our North American residential market, which represents approximately 20% of overall Pentair sales and nearly 45% of Water & Fluid sales. Valves & Controls should turn modestly positive in the quarter as near record level backlog, 17% growth in shippable backlog versus Q1, and an easier comparison year-over-year produce revenue expectations of up 1% to 3% for the second quarter. Technical Solutions is still expected to be down year-over-year, as mid-single-digit growth in Thermal Management is not enough to offset continued headwinds in equipment protection. Although average daily sales rates in orders in equipment protection are improving, we do not expect to cross over into year-over-year growth until the third quarter. We're expecting operating income to grow 12% year-over-year and operating margins to expand greater than 100 basis points as standardization and synergy benefits continue to accelerate. Water & Fluid Solutions margins are expected to exceed 15.5%, further evidence of our success in driving PIMS and Lean throughout our businesses. EPS is expected to be up around 17% to $0.88 to $0.91 per share with a tax rate of roughly 25%, interest of roughly $18.5 million and total weighted average shares around 205 million. Q2 is a seasonally strong cash flow quarter for Pentair, and we expect cash to exceed 125% of net income for the quarter. Please turn to Slide #11 labeled Q1 to Q2 Seasonality. For those that have followed Pentair for some time, you know that our second quarter is seasonally our…

Thanks, John. And if could turn to Page 15. We'll go through a few of the things John just covered, just to wrap it up before questions. What I thought I'd say in closing is that the first quarter really does position us well to deliver on our 2013 commitments. The top line remains mixed. We have strong backlogs in energy and food and beverage, and we continue to see strengthening in the North American residential market. As we stated earlier, the residential recovery brings with it strong drop through to the bottom line given the prolonged downturn we experienced, the process improvements we've made, and the amount of cost we've taken out of the business over the last 6 years. Our integration and standardization efforts continue to build momentum. And we now expect $100 million in synergies versus our prior target of $90 million. We're pleased that the adoption PIMS throughout the Flow Control businesses, has exceeded our initial expectations and we're happy with the creation of the new Pentair. With that, operator, we'll take our first question.

[Operator Instructions] Your first question comes from the line of Scott Graham from Jefferies. R. Scott Graham - Jefferies & Company, Inc., Research Division: I was just wondering. Last quarter, you gave us a really cool number. And what it was, was, that you said that by -- when you had reported at that time, you had identified 75% of the $90 million of synergies. And I was just kind of wondering if you can kind of give us a similar number updated for the first quarter on the $100 million.

Yes, I'd say that the $100 million is 100% identified, Scott. R. Scott Graham - Jefferies & Company, Inc., Research Division: Great. The other question was kind of simple. I know that you're seeing kind of a choppy energy market. I was wondering, could you tell us what your percent of sales, energy-wise -- and specifically, oil and gas is what I'm referring to -- is North America versus rest of world?

I don't have that right at my fingertips.

No, Scott, I don't know if I have that on top of my fingertips. Because I think there's a breakdown in 2 categories. And our Thermal business deal with a lot of what's going on in the oil sands, which would be up in Canada. And then our global Valves & Controls business is pretty spread across the entire globe, as far as oil and gas. I can certainly...

And equipment protection is skewed. The energy is skewed to the U.S.

But it's probably a good number to know, and we'll see if we can do that. R. Scott Graham - Jefferies & Company, Inc., Research Division: Well, I guess maybe more succinctly, are you sensing that the choppiness in the orders that you're seeing is more of a function of the North American markets or the rest of the world?

I mean, I think what we're seeing is, and it's probably the spread and certainly what's going on within the relative oil and gas, either Brent or West Texas, and then how that compares with what's going on in the oil sands. We're seeing a pause, if you will, in some of those large projects as that all plays out. But we still are seeing a healthy capacity expansion with oil and gas.

And I'd say it is skewed to a little more softness here. The Middle East, Southeast Asia, that remains strong. But again, we skew because of the legacy Pentair. We skew to more in the North America.

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

Just -- so on synergies. So you raised the targets for 2013. You kept $230 million by 2015. It feels as though you've identified almost incremental savings rather than more of a pull-forward. Is there a reason to believe that it is a pull-forward rather than an incremental? Or maybe you can just touch on that.

I think we're very confident in what we can see through 2013. And obviously, the businesses probably have a number greater than what I shared with you. We believe and have always believed that there's opportunities to increase the $230 million. And right now, we're trying to close the gap on what we need for 2014 and ensure that we've got the $230 million and then we'd drive for upsides beyond the $230 million.

Okay. And just back on the Valves & Controls project work, just -- I know that's a business you guys were trying to get your hands around. Had you guys taken a look at the backlog that's existed within Valves & Controls? A lot of the pump players, well, on the pump side, who were selling into a lot of the same projects, particularly in the Middle East over the last couple of years, have experienced a lot of margin pressure that has kind of played out. But I believe that the Valves are really a leader in the sales cycle. I was curious, as you kind of look at the backlog on the Valves & Controls side, do you anticipate that you are going to be realizing some low-margin, lower margin than normal backlog within that business that might mask some improvements from operations that's kind of yet to bleed through. Can you touch on that, please?

Yes, on that subject, one of the things that we've done and I'm really impressed with the Valve leadership team that's come aboard, I mean, the legacy Valve leadership team. As we've focused on the strategy and simplified the organization, one of the things that, that team identified and we certainly supported, was more discipline around bidding projects with good margin. They had -- there was probably $25 million worth of sales we could have had in the quarter, but we didn't bid it because the margins weren't very good. So we think that over time that discipline is going to lead to a better margin in the backlog. There's a few projects in the backlog which have low margins that we know will read out. Some of them read out in the first quarter, maybe a couple read out in the second quarter. But we think that the team has really got their arms around it well and the disciplines are already improved.

So it's a metric -- just to follow up on what Randy said, it's a metric that we've scrubbed, we can basically measure. And it's one that we've actually asked the business to expect a lower outcome, as Randy mentioned, as we work through making sure we've got all the right cost initiatives in place.

Yes, it's not just about shares. It's about profitable growth, so that's the discipline that they have in place there.

Your next question comes from the line of Michael Halloran from Robert W. Baird. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: So just on the Valves side. Could you talk about what the quoting and bidding activity looks like and then also maybe provide a full unit order number? I know you gave it by the 4 pieces, but I'm also curious if you could give the overall one.

Yes, I mean, overall orders in Valves & Controls, were up about 3% sequentially versus Q4, so that's a metric that we're keeping our eyes on how we're doing as we kind of look through the quarters there.

And the book to bill we gave, the 1.1, was overall.

And you know for us in the quarter, the overall trade orders are right around $600 million overall. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: Okay. But the quoting and bidding activity side of things, how does that look and what are the customers seeing there?

I think you've to go by segment. And as Randy mentioned, I mean, I think oil and gas is in the -- what we would -- I don't know if we call it a pause, but there's a lot of projects that are out there. And the timing of those projects feel like they're a little bit slipping. But the projects...

But the activity level is still pretty good.

It's still pretty good.

Yes. Mining is way off.

Mining is starting to taper off. Process and power are starting to get better. Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division: Makes sense. And then, the follow-up from me is a follow-up from Scott's question on the -- how much of the $100 million is visible at this point? I know the repositioning actions have already been completed in the first quarter. Is that the same for the sourcing in the Lean side as well, that the actions have been completed and it's just going to take time to materialize? Or are the actions and the work still in front of you?

The actions are fairly visible. And the way those work is, as you get productivity in sourcing, it has to go through the balance sheet. So you don't get it right away. So against that $20 million of, I think it was sourcing, you could imagine that at a run rate basis. An annualized run rate basis is or going to be twice that.

What we're guarding against, Mike -- I mean, if I gave you the raw number, it would be substantially higher. But what Randy and I want to make sure that we have is that you don't want -- there's a productivity column and then what we synergy and standardization column. And we've got to make sure the productivity column stays positive as well.

And we don't duplicate.

And we're not putting everything into the synergy or standardization efforts because we needed the holistic number to read out.

Your next question comes from the line of Deane Dray from Citi Research.

I might have missed this, but could you clarify on the backlog when you're now highlighting the shippable backlog being up 17%, will that be a number that we'll be able to back into or that you'll provide on a go-forward basis? And then when you talk about what's shippable for the second quarter, what's the mix look like? Because you've got no sense of what's going to be coming through for the second quarter. But what's the implied margin there?

Yes, Deane. As we got through Q1, the business started to share with us kind of the way we need to think about shippable backlog, especially as you take a look at how they performed last Q1, and then if you look at their last Q2, there was a different Valves & Controls. So the shippable backlog is a number that we feel is meaningful, which means, if you could ship everything to the dates that are in the system, that's what you'd ship to. Now obviously, projects move back and forth. It is a number that we think is meaningful, and therefore, probably a number we will share with you on a regular basis. Within there, Randy highlighted there are a couple of projects in the oil and gas area that will ship at lower margins, which I've called out in that seasonality bridge that we did in one of the slides. But overall, I mean, we're starting to build a pretty healthy backlog because as we get power and process into the backlog, those traditionally have higher margins than what we've experienced in oil and gas and mining.

So think the 17% in the dialogue we're having with the team is very helpful. It's 17% -- going into the second quarter that number was 17% higher than it was going in the first quarter. And we missed shipping a little bit from where we thought we'd be in the first quarter. So it gives us more confidence that we'll hit the number we expect in the second quarter. That's how we use it.

Great. And then, maybe just in terms of the upside versus our expectations on North American residential, maybe you can kind of take us through the next layer of detail on North American pull. Were there any special promotions? Is there -- was there an early buy? And what's your sense of inventory in the channel?

Well, I think we might have mentioned this in the last phone -- on the fourth quarter call, that early buy was as strong as we ever saw it. Some of that certainly shipped in the first quarter. But frankly, the regular buy was strong, given how bad the weather has been. It's not just been bad here. It's been bad in a lot of the areas, cooler spring, later start to the season. So the strength we're seeing in that aquatics business is really quite encouraging, and the industry is quite buoyant, pun intended. Then the pool builds are up.

Pool builds are up. We saw our first quarter of positive revenue growth in our valves and tanks in the water softener market. And we're continuing to see pretty nice sales now in the residential components of Flow. And we have a little bit of flooding, which is happening right now, which is always also usually a pretty good indication for that business.

Your next question comes from the line of Garik Shmois from Longbow Research.

The first question is just with respect to food and bev. You saw some demand in the first quarter from projects that were delayed the end of last year, providing a nice bump in revenues. So has a lot of that pent-up demand been worked through in 1Q? Or are we expecting to see some additional project shipments because of the delays that you saw at the end of last year?

No, those I think were specific delays as some of the companies got concerned about -- I wouldn't want to blame it on the uncertainty or on the election, but there seemed to be a lot of clogged capital at the end of the year last year and some of that broke loose. But the bidding activity has remained strong, and the food and beverage business is a growth business globally. And we have some -- we have a really good position and some unique technologies, not just in beer but in soft drinks and CO2 recovery. And we've picked up a couple, as we mentioned, last time, we picked up another big, multimillion-dollar project because we have the broader scope now for the industrial valves with the hygienic valves and the filtration system. So we did get that benefit in the first quarter of the delayed projects, but the backlog is actually up.

And just to add on to what Randy said, I mean, we've always been strong in beer and certainly, our Beer Membrane is a product that's specced into a lot of global breweries, and those breweries are in places like Africa and Vietnam and Malaysia, and there's a huge growth regarding that. But the product that was in alpha and beta state test in 2011 and '12 was our CO2 recovery system. And for 2013, we'll have shipments in excess of $25 million on that product, and that product is becoming a standard product.

Which is up 10x.

Which is up 10x. And we're seeing some substantial revenue and income coming through on those particular projects.

Okay. That's good to hear. And then, I guess, just switching on price cost, if you could provide your view as you look out over the next 3 quarters of the year, where that stands. You made some nice improvements in the first quarter. Are you anticipating any cost pressures from raw materials moving forward, or any benefits in it?

When we look at the activity in the mining segment, we think that that's a good indicator that there's not going to be a lot of commodity pressure, not a lot of commodity pricing pressure. So we don't think inflation goes higher from here. Employee raises are higher than they were, but we think we have that well managed. But John, I don't know if you'd add.

No, I'd agree with that. The pricing is somewhere, going to be greater than 100 basis points, and we think we can do better there. I think our new businesses from Flow Control are starting to put in some of the same price disciplines that we've had in legacy Pentair. And we continue to think we'll make progress throughout this year and into next year.

And if I could add. John mentioned earlier that we want to make sure we don't double comp between base productivity plus the synergistic activities. And in one way we've done -- that one reason we're able to raise that is that those 2 buckets perform well. And when they perform well in the first quarter, it's usually -- it's a good sign for the year.

Your next question comes from the line of Steven Winoker from Sanford Bernstein. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Just looking at Page 3 again, if you could, that 220 points of price productivity and mix, you've referenced it a little bit, but I'd love to get a bit more detail here on the productivity angle versus the mix side. You just talked about pricing. So what was the real productivity side of this? And you mentioned the 2 buckets. I want to get a sense, given how important this is to the story, just give us a sense for the real productivity improvement, if you could.

Sure. I mean, I think, first of all, if you take a look at where we were with price in the quarter, total Pentair, we got about a point price. One of the things that's netted in productivity is mix. Mix was about a negative 30 to 40 basis points. Inflation was about a negative 1.5-ish percent, Steve. And then on the productivity side, we were net $3 million to $4 million beyond what we said we got in the IST component, or the synergies. And that was inclusive of, if you noticed, a higher corporate spend, which is partially a quarterly timing. We always spend a little bit more in Q1 because of just certain fees that come in, in Q1 versus the rest of the year. But we also we're continuing to invest in what we're doing on the tax rate, what we needed to do around the suite [ph] structure and what we need to do to ensure that we're spending and investing in what the businesses are driving, to drive the standardization activity. So when Randy mentioned that we feel good about where we are in Q1, that's in light of incremental investment as well to drive the back half synergies. Steven E. Winoker - Sanford C. Bernstein & Co., LLC., Research Division: Okay, all right. And then when you look at Valves & Controls, I visited a number of those plants before you took them over, and I often thought of them as the gift that should keep on giving as you keep looking for repo and other opportunities to lean them out and drive efficiency. What kind of -- what are you starting? Now that it's a couple of quarters, what are you seeing operationally as you're getting to know these plants and the supply chain associated with them?

Well, as you know because you've been in the plants, Valves & Control is a great product, great quality, like the people a lot, too much complexity and too much differences between plants. So as I mentioned, we've put into 8 full-time operating leaders, basically, if you will, Lean aficionados from legacy Pentair over into the business. They've been very well accepted into the team, and if anything, they're being drawn on even more than I would have hoped. We identified the 3 most underperforming factories, and we've replaced the plant managers in all 3. And we have Lean rangers that we flowed locally from -- in other words, European -- from European Lean rangers from legacy Pentair to the European plants, same in the U.S., same in Latin America, in order to drive the basics of Lean and start driving that common language that we know is going to help simplify. The opportunity in delivery is enormous. It's not in this industry. Valves & Controls is not an industry that is known for their on-time delivery. We have very ambitious targets. If you recall or followed us long enough to know that in our aquatics business, we used to have deliveries that -- I hate to say it, but we're frequently below 60% on time. And now, they're over 95% on time. It's one of the reasons that we keep gaining market share there. Valves & Controls isn't that bad. It's not below 60%. But it's -- as an industry, it's not great. That drives a lot of waste in terms of inventory. That drives a lot of waste in terms of customer planning. It drives a lot of waste in terms of plant planning. And so, we know it works. We know Lean works, and Lean is the way we're going to simplify the business, and so that's our approach to it. And our goal, it took us 10 years to get Pentair where it is, and I want to be able to get Valves & Controls there in 3. But 10 years was hunt and peck. We have a plan now. So it's ambitious, but I think the team is up to it. I'm very impressed with the Valves & Controls team.

Your next question comes from the line of Joshua Pokrzywinski from MKM Partners.

Can we just talk first about the ramp in IST as we head into '14? I guess with visibility into that $100 million at 100%, presumably, you have some level of visibility into a bridge between the $100 million and the $230 million.

Yes.

And I guess, how much would you say you have on what kind of number, order of magnitude for '14? I understand that it's still early but I guess, any way to help calibrate whether it's a half-step jump from the $100 million all the way up, or if we get an accelerated realization? Just any kind of color there I think would be helpful.

Yes, so, Josh, the number I feel obviously best about, from a number perspective, is obviously the repositioning and the restructuring numbers because they're -- when people leave, those costs permanently leave the organization, and that was incremental to anything we were doing at Pentair. So that's an $80 million benefit this year, and that's well over $100 million next year, given the timing when those people are leaving. So 100% confidence on that number, and it's a known trackable number that doesn't get tied up between this productivity expectation and the synergy. To give you a number, the synergy targets for 2013 around the sourcing and Lean exceed $40 million versus what we're saying is $20 million. And they have to work their way through inventory and they have to work their way through the P&L. And we've got to make sure that they're incremental to what would have been in the base plans anyway. When you take a look at that number from '14, and it probably shouldn't be a surprise, lean builds momentum. And as Randy was talking about when we did this deal, having 100 factories all signed up to $1 million of Lean benefit or $100 million, is not a number that would be insurmountable. So everybody has internal stretch targets that they're driving to around those ranges, and so when you look at the productivity decks and the synergy decks, it's very encouraging. That being said, those same people would've been working on base productivity. So we want to make sure that we're not double counting the synergies in lieu of what we would've got in base productivity anyway. And that's why we're a little bit more conservative and cautious on our outlook. And as I think we get through these and we look at the examples I gave you, bar stock, and negotiations that are in the rack, [ph] those are all real. And as we get more and more confident on what's actually a permanent cost out, we'll certainly share that, and then we can have more confidence on what the '14 and '15 numbers will be.

Okay. I think that's helpful. And then just one clarifying point, maybe you touched on in the prepared remarks, the $825 million in buyback that you're signed up for this year, I noticed that the share count at 205 million looks like either that is very second half or even fourth quarter biased. Is that a new number? I know the 205 million is unchanged, but I'm just trying to understand: is there an element of conservatism or just very late positioning of that buyback in the year?

It's actually accelerated from our original views, and we're definitely planning now to have everything complete by the end of '14 and we'd only have $375 million to go next year. As you know, if our debt levels allow, it's in our best interest to do it sooner rather than later. And so we're...

But where we are is where we planned to be at this point. We accelerated before, as John just said, and we announced that last quarter. And we did the $140 million in this quarter, which is about what we thought we would do. And we thought we'd do more in the middle of the year, in the second half. One reason is, we're disciplined about cash flow, and we didn't know what our first quarter cash flow was going to look like because the Pentair legacy typically was a big sucking sound on cash in the first quarter, and it the minus $80 million or so last year. So we wanted to see what the new -- so we did what we planned to do.

Okay, so $825 million is not a new number, quarter-over-quarter?

No, no. Just sharing where we are as a status update, Josh.

Your next question comes from the line of Jeff Hammond from KeyBanc Capital Markets.

Just on Thermal, can you -- as you look at -- do you expect the mix dynamic to continue, i.e. the infrastructure stays weak, and the other businesses continue? And then you made the comment on oil and gas in a kind of a pause in order of quoting activity. Is that more of a Valves & Controls comment, or does that flow over to Thermal as well?

I'll take the first half. I think, when you look at technical solutions, I mean you take thermal and you take equipment protection. Thermal had a great quarter. And our technical -- or our equipment protection businesses is struggling through 2 markets, infrastructure and a slower industrial vertical. Our comparisons in equipment protection get easier in the second half of the year, and we're also focused on the food and beverage market, the energy market and an opportunity for our products to be in those spaces. As far as the Thermal into the oil and gas markets, we're really specifically in the cold weather climates or areas where we see a desert-like environment, where heating is necessary in the process. And those projects are enormous, but they're also dependent on certain price points. And that's what we're constantly monitoring in that side of the business.

So have you seen slowing in the quoting activity in that side of the business?

We've seen a lumpiness, meaning, we -- [indiscernible] was a project that was canceled in its entirety.

Which we had -- the project we had worked on.

We had worked on that. Now there's another project that's starting to come up in its place, which will be in a different location. And then there's large projects or a series of large projects in Canada that are obviously dependent on where the oil spreads are. So, yes, these are slowed, no doubt about it.

They're slow off what I would call our high expectations, but I think the business will still do well. One area that slowed in the first quarter, and for the Thermal business, is that they're fairly large in Scandinavian countries for snowmelt and in commercial and residential. And Scandinavia had been a bright spot in Europe, in Western Europe in terms of growth, and we've actually seen even Scandinavia slow down now, which is more of a -- that's a comment that I would draw across all of Europe, not just what we saw on Thermal, but it's a good measure for it.

So Jeff, just to follow up. I mean, one of the reasons we went back and restated the pro forma as we did without the projects in it, for these solutions, as when those larger projects come, those should be nice incremental upside for Pentair.

And the mid-single-digit growth you see in that business, is that x the big project comp?

Yes.

It's over the pro forma baseline that we set out.

Your next question comes from the line of Christopher Glynn from Oppenheimer. Christopher Glynn - Oppenheimer & Co. Inc., Research Division: I'm just wondering about the Europe linearity, if there's anything curious there, or if you'd even call it may be stable at this point, just kind of an overall complexion.

I would love it to be linear and flat. I would not really lie. It's really a mixed bag. We've seen our equipment protection business, things they bottomed out. Residential seems to be finding new plateaus on our further downward slide. And so I don't really have a lot of faith that we've seen the bottom yet in the U.S. And even in Eastern Europe, which had been pretty robust, even that is feeling a little softer than it did, at least, when I look at orders. So, we factored all that into our outlook and that is piece -- a piece of the mix look. Middle East remains strong. Latin America is not bad. So it's really interesting. And I saw and read in an article over the weekend that the U.S. is the new fast-growth market. From those words to God's ears, I hope that's true. But certainly, the place we're seeing the best growth is U.S. residential right now Christopher Glynn - Oppenheimer & Co. Inc., Research Division: Okay. And then just wondering on your acquisition pipeline appetite and how you're thinking about here, and the range of deal sizes that you might be open to, considering the share repurchase commitments.

Yes, I mean, I think it goes down to what businesses are operating in a high level and have great standardization and are prepared for acquisitions and a couple of those that we said are -- certainly, our aquatics systems business, especially around aquaculture and thermal management right now, as areas that we'd like to put more effort behind, and eventually, Valves & Controls. But that being said, right now, we're focused on what we're doing on integration and things that we do, in lieu of what we're doing on the buyback, would have to be incremental to what the buyback would yield. So I don't think we're feeling like we're missing out on anything at the moment at all. We're certainly making sure that our pipelines are robust, that we're prepared, we're ready to answer, but we think our plan right now is the right plan.

Your next question comes from the line of Hamzah Mazari from Crédit Suisse. Hamzah Mazari - Crédit Suisse AG, Research Division: I just had 2 quick clarification questions. Number one, is there any change in Q2 on infrastructure and industrial end markets versus Q1, or is it more of the same? And second clarification, did you guys say that you guys are front-loading the buyback, is that right?

Well, we said in the last quarter, the multi-year stock buyback, we accelerated, but we announced that 6 months ago. We said that basically, we were going to move everything up about a year, so that's not new news. And we've been going according to plan since then. So the acceleration was the stock buyback we did in the fourth quarter, and that was the acceleration. The rest is -- and everything else pulled up the same way. In terms of industrial, we saw -- we've seen an increase in daily order rates in our core equipment protection, industrial and as we mentioned, Valves & Controls and other big processes within industrial. We've seen that stabilize, so I wouldn't say we expect industrial to be stronger in the second quarter, meaningfully stronger than in the first quarter. But certainly by the second half, we'd expect that, as we said in the outlook. And what was the other -- Hamzah, what was the other question? Hamzah Mazari - Crédit Suisse AG, Research Division: On the infrastructure side, any change there?

Oh, yes. Infrastructure, in general -- in infrastructure, we obviously put water projects but we also put the telecom projects and rail projects and the like. And they just -- it seems to be challenged everywhere. We mentioned that our backlog has been staying at a fairly high level for us in the U.S. in water. But I wouldn't read that broadly because we're a niche player in that. We play, we work strong and we seem to be doing okay in it, but it's not real huge growth for us. It's just a bright spot in what I would call generally a global infrastructure slowdown. The RO projects and the large water products in the rest of the world are just not breaking free.

Your next question comes from the line of Brian Drab from William Blair. Brian Drab - William Blair & Company L.L.C., Research Division: Just first, a quick question on the tax rate. You mentioned that you hit the 25% level. The effective tax rate you reported was 28%. Is the difference there just this divestiture of ad spend or is something else going on there?

Yes, the 25% reflects what we think the full year ongoing rate will be, and the difference are those things related to either the asset sales or one-time impacts, the true-ups related to the overall Pentair structure. Brian Drab - William Blair & Company L.L.C., Research Division: And in the first quarter, the adjusted tax rate was 25%, did I hear that correctly?

That is correct, correct. That's what I also think the full year will be. Correct. Brian Drab - William Blair & Company L.L.C., Research Division: And then on the residential side, you mentioned -- you made a couple of comments on how the residential filtration, residential pump business is doing. Can you talk a little bit more, maybe a little bit more specifics, on how those businesses grew in the first quarter, what the order rates were?

As I mentioned, aquatics was double-digit. Brian Drab - William Blair & Company L.L.C., Research Division: And in aquatics, I think -- and I don't want to make you repeat yourself in aquatics, but I'm looking more on the filtration and pump side.

Yes, filtration and pump in North America only or globally? Brian Drab - William Blair & Company L.L.C., Research Division: North America, given it's weighted towards that market. And if you have any global comments, that would be great.

We had high single digits in residential in our Flow business. And as I mentioned earlier, we're just slightly positive in our filtration -- or our tanks and valves. And then in our filtration platform, we were high single digits.

Operator, how many questions are there left because we're at the hour?

There are 2.

Okay, we'll take those 2 and then wrap up.

Your next question comes from the line of David Rose from Wedbush.

A follow-up question on -- maybe a little point of clarification on the restructuring charge in the $28 million. Can you walk us through the buckets for that? And expectations for restructuring charges in Q2 and how that drives your cost saving goals?

Yes, so where we are right now, the $28 million concludes everything that would get us to the $80 million for '13 and then that slightly higher than the $100 million that I mentioned on an ongoing rate. And we would expect, if we could, to do a little bit more in Q2. And we're looking for everything because the inventory step-up in the backlog and the customer amortization concludes the end of Q2.

For [indiscernible].

And as we said, in Q3 and Q4, we'd expect to have a gap reported number, and that be consistent with adjusted. So any incremental restructuring would be assumed to be an incremental benefit to synergies and/or to next year's synergy numbers.

So to be clear, if we do to see any more restructurings in Q2, that means the synergy target for the $100 million target goes up?

It could be the $100 million, or it could be next year's 14 [ph] depending on the timing of the projects.

Yes, I think about it in terms of the $230 million that we put out as the overall target.

Okay, and then was this largely severance? Footprint reduction? Can you kind of break it down?

Primarily, G&A structure, severance and tweaking of our structures as it relates to the models that Randy is trying to drive across the globe.

And your final question comes from the line of Chip Moore.

For the energy-related business overall, could you give us a sense how that breaks down upstream, versus downstream, oil versus gas and then also the relative mix for mining and power?

Well, that's a big question. I think if we -- let me take the second half of that first, because it's an easier knowable answer. If we take a look at where we are from oil and gas, just north of $800-ish million, $825 million in total for Pentair. Power is roughly just north of $425 million for us. Mining is in the low 200s, and that would be in the Valves & Controls space. And if we looked at the total portfolio, we've always said we're pretty diverse from the Valves & Controls standpoint, so we're about 1/3 upstream, we're about 1/3 mid, and 1/3 downstream, plus or minus a little bit on that equation for 2012, and those are '12 numbers.

All right. Thank you, all, for your attention, and we'll be talking. Operator, can you give the replay information and we'll sign off. Operator?

If you'd like to listen to the replay of the conference, you can dial (800) 585-8637 or (855) 859-2056, and it will be in until the 23rd of May for you to listen to.

Thank you, all.

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