Good day, and welcome to the Roper Industries Fourth Quarter and Full Year Financial Results Conference Call. [Operator Instructions] I will now turn the call over to John Humphrey, Chief Financial Officer. Please go ahead.

Thank you, David, and thank you, all for joining us this morning as we discuss the results of the fourth quarter and full year 2010. Joining me this morning is Brian Jellison, Chairman, President and Chief Executive Officer; and Paul Soni, Vice President and Controller. Earlier this morning, we issued a press release announcing our financial results. The press release also includes replay information for today's call. We prepared slides to accompany today's call, which are available through the webcast and also available on the website at www.roperind.com. So if you turn to Slide 2, we'll begin with our Safe Harbor statement. During the course of today's call, we'll be making forward-looking statements which are subject to the risks and uncertainties that are described in this page and as detailed in our SEC filings. You should look into today's call in the context of that information. And now if you'll please turn to Slide 3. I'll turn the call over to Brian Jellison, Chairman, President and Chief Executive Officer. After his prepared remarks, we'll take some questions from our telephone participants. Brian?

Thank you. Good morning, everyone. We'll start off by just saying the outline for today, we'll talk first about our full year financial results here for 2010 and then go into the enterprise results on a financial basis for the fourth quarter. Then we'll look at the individual segment detail and the outlook for each one of those segments for 2011. I'll talk a little bit about sort of beyond the numbers, things that happened in 2010 that have been learnings for us during the downturn as we come out. And then establish our 2011 guidance and move to Q&A for you. So next slide. For 2010, our enterprise financial results are just fundamentally in every category, an all-time record whether it's orders, sales, backlog, earnings, EBITDA, cash flow, anything one can think of. Our EBITDA margins for the year reached 26.7%, of course, another all-time high. Our operating teams performed exceptionally well, and we enjoyed full year EBITDA leverage on the next dollar of incremental sales of 40%. We had a record asset loss, we will have more to talk about there. And for the first time, we were at $500 million in operating cash flow for the calendar year. Our free cash flow became 20% of sales. We look around it, capital market competitors for us and many of the S&P 500 businesses don't enjoy 20% operating margin, let alone 20% free cash flow to sales. Our free cash flow exceeded net income for the 13th consecutive year. We increased our dividend this year by 16% for 2011 after raising them last year, 15% for 2009. Our book-to-bill ratio for the full year was 1.06. This has created a record backlog of $785 million, which is up $220 million from our year-end backlog last year, and I think…

[Operator Instructions] And we'll take our first question from Christopher Glynn with Oppenheimer. Christopher Glynn - Oppenheimer & Co. Inc.: Question on Energy. You had some very strong orders, talked about the oil and gas markets really picking up. So just looking at the leverage to the cyclical versus some of the seasonal lumpy, would we be looking a little more level loaded year for that business than normal?

In 2011, you mean? Christopher Glynn - Oppenheimer & Co. Inc.: Yes.

Well, we had dropped margins in Q1 this year in Energy with some things that were self inflicted, and we don't expect that to happen. So yes, I think you should see more level margins throughout the year as opposed to down in Q1 and catching up in the rest of the year. Christopher Glynn - Oppenheimer & Co. Inc.: And what about from a demand perspective?

A lot of the Energy businesses have little longer lead time than the rest of our book-and-ship kind of businesses, and we're seeing very strong backlog and lots of activities. So we wouldn't see any falloff during 2011 in terms of our sales. If there was any order softness, we are not seeing anything that would indicate order softness in the upstream area.

But Christopher, in terms of the fourth quarter activity where we normally see stronger performance out of a couple of those businesses and their end markets and their customers kind of spend what’s in their budgets, that returned. So that seasonality returned in 2010. We would expect to see that continue in 2011 as well. Christopher Glynn - Oppenheimer & Co. Inc.: And then just my other follow up on the timing of the Verathon new products and the adoption curve and ramp of that business, obviously pretty impressive. Could we get a little color on what's coming through pipeline there?

Well, I think they prefer to let their customers know rather than their competitors at the moment. So we'll stand down on that and we'll talk about them when they're launched. I think they'll be noticed by the market place.

And next, we'll go to Deane Dray with Citi.

Brian, I'd be interested in hearing some further color around the comment of that state and local municipalities having a more of a challenging budget outlook, not surprising there. But just in terms of is this affecting tolling bidding projects? And is there any of the E-ZPass delays involved in that as well?

Well, this past year, we would've been off in those areas in excess of $30 million, and yet, you can still see the performance we've generated. So it's been a drag throughout the year in terms of actual sales and it’s been certainly frustrating. The E-ZPass thing is beyond unbelievable. And I can't say a lot more about it. Some people have written recently that well maybe there'll be a decision in August of 2011. We saw another article from somebody who's talking to somebody saying, "Well, maybe they won't decide then it could rollover to August of 2013." And we have a lot of questions about what's going on there but we have very little influence in it. We just offer them the best technology in the world at the lowest price and continue to pay money to get it tested. And some time somebody will decide something. And now as far as other projects are concerned, the decision making around projects has been very slow. We thought we might get some benefit in 2010 as just the stimulus situation went away. But in fact, there's just very slow decisions. We still got a lot of questions, we got a lot of people who are wanting to convert to our United Toll products and so that's given us kind of a leg up. But we're not assuming any kind of real spike in 2011 on that portion of the business. Now remember in that segment for us, it's now finally less than half of the segment. So we got a lot of other things in the segment that are really driving margin and driving cash and driving economic performance. I do think that our results in terms of revenue have really bottomed on the items in the transportation and traffic arena. We've got a meeting later this week to kind of refresh where we are, I know people are starting to develop a little bit more confidence.

And then just a clarification on the copper headwind for Neptune. Does Neptune do advanced purchasing? And how much of that additional copper price can be passed through to the customer?

Well, certainly we do some advanced purchasing. We do several things here although we never found it meaningful to hedge because we don't have enough volume. And it's just that the sharp rise in copper, pretty overwhelming and so we model it against our mix of things and the copper content we had. We've been very successful in reducing the copper content inside the water meters itself but on a residential meter basis, it's not easy to get pass-throughs the way we can in our pump businesses. We generally, are maybe six months ahead of what we think consumption is going to look like, so we have a pretty good idea around that. But at the end of the day, we're going to have some leakage. We try to do surcharges on material. We try to certainly do pass through on bids, but it's a challenge.

And just an observation, I see that the segment is now Medical and Scientific Imaging, and how you present it really reflecting the whole portfolio transformation with Verathon bringing you much more of a medical side of the story. Is that both become an official reported segment as well?

Yes. Well, the real reason is that Medical is now over half of the segment. So the Imaging continues to wane as a portion of the total segment, still critically important but it's mostly Medical now.

And next we'll go to Mark Douglass with Longbow Research.

Brian, you talked about the growth investments you made during the downturn. What's your R&D spend like right now? And has it been trending a little higher as a percentage of sales given the growth in some of your, maybe call it, higher tech and gross margin businesses?

The R&D spend in 2010 was a little over $100 million. So that was up sharply from 2009. 2009 and '08 are about the same in the mid-80s I think. And 2010 was $102 million. But what happens, it's important to understand, is remember you think about a little less than half of R&D is kind of an administrative services that we do, revenue management for people and stuff like that. There's not a lot of R&D in there. So R&D spend is a function of revenues, is very high in Medical and Scientific Imaging, reasonably high in Energy, quite modest in Industrial other than in Neptune, and then mixed in our RF software business, most of that stuff we don't treat as R&D. And then we've really spent quite a bit of money in adding to our global reach and sales development, MarCom and Web access and things like that for each of the divisions.

And then with that, are you comfortable with your current investment rates? Or with your record margins right now, you think you will use some of that maybe goose your investments even more and maybe even pick up more market share in '11 looking out into '12?

Well, I think that we have an aggressive internal measurement that the field people use. It would be rare that field people would come in with spending strategies that we wouldn't embrace. Product development and product management is kind of a critical skill set within the company. I mean product managers always like to have more but they have all that they really need. I think you'll see our excess cash that we throw off likely to get reinvested in acquisitions as we've been doing for a long period of time, and the opportunities in the pipeline are pretty interesting.

And next we'll go to Wendy Caplan with SunTrust Robinson Humphrey.

One of your most successful strategies, I think, internally has been to lower the break even across the company. Can you give us some examples of what you see as potential, some ideas about how you might potentially continue to lower the break even as we go into 2011?

Well, certainly, the break even for us continued, it dropped in 2010 as a function of revenue, the nominal breakeven number for sales went up a little bit in 2010. Our breakeven as a function of revenue probably at the lowest point in our history if I have to say, if you get back to the early '90s or something probably not, I'm not sure about that because it wasn't collected that way, and I don't know how you could really segregate the mixed and variable cost component. That would be a pure guess. But in the last 10 years, we're at the best position we've been. And I think IT technology continues to improve. And while we don't believe in enterprise-wide IT strategies, we do believe in look here's four we're willing to go with. And people get to pick the one that best suits their business so you have a couple of different CRM opportunities here and you have different kind of things related to how you're going to pull things through the factory operations, all of those are very good. John, you might want to take a swag at that?

No, I think what you've said covers it. For us, Wendy, it's as much around making sure that our operating leaders are always focused on the leverage ratios. And I think you've seen our leverage on incremental sales actually get a little bit better as we have moved from the 2008 range in through 2010, looking into 2011. So we look at that fixed cost leverage and the breakeven point as a key input and one of the things that all of our businesses need to manage to make sure that the leverage on the growth opportunities that are there really delivers to the bottom line.

And along with that, John, and Brian, you've done a great job with your working capital. I mean do we get to the point where, I mean, I feel almost foolish saying this is as good as a guess given that it's so amazing. But do we think there's still a little room there?

Well, there's a little room. There's always a little room. We're blown away at this 5.4% number. I have to say one of the things we do, we pay bonuses on incremental operating profit performance, and then there's quite a big kicker for asset velocity. It’s safe to say we're paying a lot of bonus money this year for the asset velocity ticker in our Industrial and Energy businesses. They have really performed remarkably. I don't see anything that says they get any worse. I would think they get a little bit better. They've gotten dramatically better in receivables management in their global businesses, they've got dramatically better inventory. And then we have also the last several acquisitions we've made, Verathon is just, man, they got a lot of turns here at Verathon because we really put that stuff through quickly. And then the software businesses don't really have any inventory to speak of. So we're getting mixed variances that have to do with our strategy of the kind of assets we want to own versus people that are in full-line integrated manufacturing.

And speaking of that, finally, the M&A environment is clearly been improving. You have notably bought high margin kind of asset-like businesses that generate a lot of cash with an emphasis on the SaaS businesses most recently. Are there any other factors or nuances that you're seeking in terms of acquisitions? And can you say something about what's out there for you?

Well, there's a lot of stuff that's for sale last year, a lot of private equity transactions wound up not getting into the sale category as they were really able to refinance at extremely attractive rates, and kind of had an opportunity to double dip, if you will, where they get refinancing take out fees and then they can go ahead and sell them again later in 2011 or '12 or whatever. So as long as the finance arrangements in terms of what people are willing to staple on the transactions remains as high as it is, and it's frankly ridiculous levels in our opinion. There's a lot of bid ask spread variances that are still there. But I think people want to make sure that they do exit their positions that they've hope to exit in 2010 and 2011. We've seen an awful lot of activity. Certainly there's so much opportunity, Wendy, the challenge is we don't want to do something that's good at the expense of the substantially better. And so we're, I think you'll see us be slow in the first month of the year because there's just so many different things that we're currently doing diligence on.

And next, we have Matt Summerville with KeyBanc.

First, can you give a little more color, Brian, was the amount in the Houston Tolling project that pulled from '11 into '10 substantial? Could you quantify that? And then similarly talk about what the incremental ramp looks like with Toronto and Mexico City in '11 versus '10?

Well, I think we were kind of assuming we'd be in the $40 million range for Houston in 2011, and about somewhere like $10 million move into the fourth quarter I think, or a little more maybe. So that what it does is it gives us a little bit harder incremental comparator, and it gave us a little more income in Q4. The problem is that these projects like Houston don't carry the kind of margins that you're accustomed to seeing with us. They accrete to us eventually but boy at the beginning of these, they're relatively low-margin projects.

And then our Toronto, we had some revenue kind of mid-single digit revenue for that in 2010, and that will start ramp up in 2011 so we're counting on that for somewhere in the $20 million to $30 million range for 2011 and they're reaching kind of that level and they will be a little bit above that going into 2012. Of course, we're talking in $200 million or so over a five-year to six-year period. So there'll be a ramp-up and then it will come down a little bit on the Toronto side. And in Mexico City, the results are going to be adding to us for Neptune somewhere in the kind of mid-teens of millions of dollars for 2011.

And then just one follow-up, on the Oil & Gas business, how much would you guys, say today, is being driven by upstream versus downstream activity? And can you just provide a little more granularity into your thoughts regarding the growth outlook in those two buckets, if you will, for 2011?

Well, certainly the V-shaped bounce we got out of Energy was really upstream. So there's quite substantial upstream activity. Now in the case of our directional growing of business, that's a different situation, right? So they have reintroduce the proprietary technology that's really clearly superior to what people have used in the past. So it's growing really well. And if I think we'd do that because it's less around the economy and more about the disruptive technology we have introduced, it allows people to drill deeper, faster and with much better performance. But in the other category in Energy, it's mostly upstream. The refinery business that we have an instrumentation is in a lag in our segment. But still up and it's going to continue to be up, just not at that pace, favorable change the rest of the segment has.

And next, we'll go to Richard Eastman with Robert W. Baird. Richard Eastman - Robert W. Baird & Co. Incorporated: I just want to circle back for a second, when you say you've won Mexico City at Neptune, is that meters and RF automation? And can you just give maybe scale and scope of that project?

It's meters. It's just meters periodically from time to time, we get those and the reading technology that goes on them is variable based on what’s happened. It's not the first time we've gotten an update from Mexico City. So it's not like a system win that you're going to have a $100 million over four years. It's pretty much 2011 throughout the year growing against something as John said, it's in the low-teens of millions of dollars. Richard Eastman - Robert W. Baird & Co. Incorporated: And then when I switch down to the RF-tech segment, what do you think, Brian, the margin profile looks like there through calendar '11? Because we've got iTrade that's accretive. We'll have certainly, Houston, that may be pulls that in a little bit. Can we work off of kind of a 23% EBIT margin as a floor here going forward?

Well, let's do a couple of things here. A part of it is the mix of what happens in a quarter, right? So if you look and there's a reconciliation, two reconciliation pages that are in the appendix that show you by quarter. And we try to make this really granular this time where you'll see in a reconciliation in OP line, the amortization line separate and then an EBITA number, and then appreciation added through EBITDA, we gave you the revenue number, we gave you the EBITA margins. So for instance, and RF in the fourth quarter, the EBITA margin was 29.7%, EBITDA margin was 31.2%. In the fourth quarter, I think our intangible amortization was about right at $25 million. Our full year intangible amortization for '10 was about $86 million. So clearly, you're seeing the effects of the intangible amortization on iTrade, which is quite sizable. And the A portion, which has nothing to do with the reinvestment CapEx or anything else is going to be like $100 million. So that tends to pull down operating profit margins and it is, in our view, a foolish way for somebody to think about how well the company is performing. So you'll see a continued growth in iTrade. It will add significantly to our cash performance. It will add less aggressively to the OP margin line. So that's an important distinction. And then the Tolling traffic business is less than half the segment. It comes in at dramatically lower gross margins. We are not talking 50% and 60% there. We are talking very much less than that. And then its operating profit margin is relatively good given its low gross margins. Then the rest of the segment, let's say it gets to be 55%, 60% or more, it's going to have highest gross margin profile higher than imaging does and it's going to come in with the EBITDA higher than any portion of the enterprise. So it's a hard question to answer and say, "Well use a 23 plug." I don't think I'll do that. But it's easy to put a plug-in on a cash performance basis quarter-to-quarter. Richard Eastman - Robert W. Baird & Co. Incorporated: And then maybe just lastly, when I look at the four segments of the business and I'm kind of looking at it relative to your calendar '11 core organic growth guidance of 9% to 11%. What it appears is though there's a comment about RF being double-digit. I assume that's for the whole segment? Energy systems, double-digit?

They're all quite similar, Rich. If you look at them, we are kind of going this day plus or minus 1%, they're 10% growth in each one of the segments organically in 2011.

And next we'll go to Terry Darling with Goldman Sachs.

John, wondering if you could talk a little about how you see organic in the first quarter relative to the full year guidance given a very strong fourth quarter run rate? Obviously, the comps get tougher in the back part of the year so you figure first quarter starts a lot higher, but maybe you could help us with some color there?

No, you're exactly right. I mean the comparisons, as we continue to ramp up our organic growth in 2010, the comps do get a little bit tougher in the second half. The way we're thinking of this is that the first half should be somewhere in the low, call it, 13% to 17% range, so kind of mid-teens performance in the first half, with kind of mid- to high-single digits in the back half.

And then maybe that partly the answer to, Brian, your comment that the first quarter, you're pegging at more like 21.5% for the full year versus that 18% to 20% range. But any other factors we ought to think about there?

No. I think we've got like this Mexico City thing, Toronto thing, continued rollout on gas and [indiscernible] and those things, we have just very limited effect on when people take shipments. So it's really hard to say much of that. This year, if you look at organic growth like I said before, we're getting minus 3%, plus 5%, plus 14%, plus 15%. It's going to be a little better next year but it's probably ramps down the same way this year ramped up. So I heard John say 13%, or more, I can understand 13% or more. But clearly, first half of the year is going to be in the low-teens organic growth. The second half of the year is going to be more like the average we had for 2010, is my guess. And I think if we have upside of the year, it's probably going to manifest itself in the fourth quarter. I think that our field people are forecasting light in the fourth quarter versus what we would think in -- I don't really blame them for that. It's hard to envision you could have double-digit organic growth every quarter in 2011, but it's certainly possible.

And then just a couple of other clarifications, on RF margins, you're not suggesting down margins for the year for the segment, you're just saying there's an element of headwind there on the Houston piece, right?

Yes. I think that's a fair assumption.

And then on the comment that Medical, see double-digit growth, you're talking about for the total segment or just the Medical piece within the overall division?

Actually, for the entire segment, both and Medical specifically. So Medical will be leading the growth profile for the segment, and that brings the segment up to kind of the average for the company for 2011.

And that will end our question-and-answer session for this call. We now return back to John Humphrey for any closing remarks.

Okay. Well, thank you, and thank you all for joining us this morning, and we look forward to talking to you at the end of the first quarter.

And that does conclude today's conference, and we thank you for participating.