Good day, ladies and gentlemen, and welcome to the Fourth Quarter SPX Earnings Conference Call. My name is Stephanie, and I will be your operator for today. [Operator Instructions] I would now like turn the conference over to your host for today, Mr. Ryan Taylor, Director of Investor Relations. Please proceed.

Thanks, Stephanie, and good morning, everyone. Thanks for joining us. With me on this morning's call are Chris Kearney, our Chairman, President and CEO of SPX; and Patrick O'Leary, our Chief Financial Officer. This morning's call is being webcast with a slide presentation, which can be accessed in the Investor Relations section of our website at spx.com. This webcast will be available until March 3, and I encourage you to follow along with the webcast as we reference the detailed information on the slides. The 2010 EPS and free cash flow results that we discuss in this presentation are on an adjusted basis from continuing operations. We have included supplemental schedules in the appendix of today's presentation, which provide reconciliations for all non-GAAP financial measures discussed today. Our earnings press release was issued this morning and can also be found on our website. Before we continue, I would like to point out that portions of our presentation and comments are forward-looking and subject to Safe Harbor provisions. Please also note the risk factors in our most recent SEC filings. And with that, I'll turn the call over to Chris.

Thanks, Ryan, and good morning, everyone. Thanks for joining us on the call this morning. We reported our fourth quarter and full year 2010 results this morning, and we're pleased with the results. We met or exceeded all of our Q4 and full-year financial expectations. During the year, we also made progress towards our long-term strategy and improved our financial position. Demand in most of our key markets improved, and we're encouraged by positive trends in many of these markets as we move into 2011. I'll begin this morning with a few highlight from 2010. Last year, growth from emerging markets, early-cycle businesses and acquisitions offset headwinds in our late-cycle Power and Energy businesses. $1.2 billion or more than 25% of our revenue was generated from sales into emerging markets. Revenue into China grew 39% versus the prior year, and revenue into Africa was up 36%. Our Test and Measurement segment reported 15% organic growth and 200 points of margin improvement, reflecting broad recovery in the global vehicle service industry. In our Flow Technology segment, we completed two strategic acquisitions that have expanded our presence in the food and beverage process equipment market. Our total sales into this market grew 10% year-over-year. Despite headwinds in mature power generation markets, our Thermal segment reported flat revenue with 130 points of margin expansion to 12.1%, matching its record margin performance. This reflects very solid execution and high-quality projects. We began 2010 with a solid balance sheet and ended the year in even better financial position, with increased flexibility and liquidity. Adjusted free cash flow for the year was over $200 million, representing 113% conversion of net income. We're pleased with our performance in 2010, and we're optimistic about our growth potential over the next few years. Looking at the key financial results…

Thanks, Chris. Good morning, everyone. Looking first at EPS for the fourth quarter, we reported earnings of $1.30 per share. This includes a $0.17 tax benefit related to the favorable settlement of certain legacy tax matters. Excluding this tax benefit, EPS was $1.13 per share, $0.10 above the midpoint of our guidance, and $0.03 above the top end of the range. For the full year, reported EPS was $3.86 per share. On an adjusted basis, EPS was $3.62 per share. This excludes $0.57 of tax benefits recorded during the year and $0.33 of charges associated with our Q3 debt refinancing. Our earnings per share increased sequentially throughout 2010. Looking at the Q4 year-over-year comparison, adjusted EPS decreased 17%, driven largely by reduced revenue and profitability in our power-related businesses. The lower pricing on shipments of Power Transformers during the period was the primary headwind, resulting in an $0.18 year-over-year decline. Revenue for the quarter was $1.3 billion, flat year-over-year. Acquisitions contributed $58 million or 4% growth. This was offset by a 3% organic decline and 1% impact from currency. Fourth quarter segment income was $160 million, down 5%. Segment margins were 12.1%, better than we had expected, however, down 70 points versus Q4 2009. The pricing decline in transformer shipments reduced our consolidated margins by 90 points. Aggregate margins across the other businesses improved 20 points year-over-year. Looking at the results by segment, beginning with Flow Technology. Flow reported revenue of $486 million in Q4. That's up 11% from Q4 2009, driven primarily by acquisitions. Organic growth was 3%, driven by increased food and beverage systems revenue in Asia-Pacific, as well as increased revenue from the nucleus squib valve project and sales of oil and gas processing equipment. Currency reduced revenue by 1%. Segment income increased 13% to $71 million,…

Thanks, Patrick. Looking at our 2011 expectations, there have been no changes to the financial targets we issued on January 19. Please note that the impact from the pending acquisition of Teradyne Diagnostics Solutions business is not factored into our 2011 guidance at this time. On a consolidated basis, we're targeting about $5.3 billion of revenue with single-digit organic growth. We expect segment margins to be down modestly to last year. Our EPS guidance range is $4.20 to $4.50 per share. This represents about a 20% increase over 2010. We expect to convert approximately 110% of net income into free cash flow, even with capital spending elevated to $150 million. Last year, we saw improvement in many of our early-cycle businesses, and we expect that to continue in 2011. However, about 2/3 of our business is mid-to-late cycle, and based on this, we believe our company, as a whole, is in the early stages of recovery. As economic growth continues, we expect increased capital spending and electricity demand to be key factors in the recovery of mid-to-late cycle activity. Most of our late-cycle businesses also have long lead times. Historically, we've seen a lag of about two to three quarters before positive order trends impact recorded results. In recent quarters, we have seen signs of improvement in the order activity in our key power markets. If this improvement continues, we believe we could see meaningful growth in our power-related businesses over the next few years. So in summary, we are pleased with our 2010 results, as we met or exceeded all of the consolidated financial expectations that we set at the beginning of the year. As we move into 2011, we're encouraged by the order trends across many of our end markets. We're targeting organic revenue and earnings growth this year, and believe SPX is in the early stages of its cyclical recovery. Strategically, we're investing in innovation, large power transformers and our China manufacturing campus. We are in a strong financial position with sufficient flexibility to continue to make strategic investments as those opportunities arise. We remain confident in our long-term strategy, and we're committed to executing it. That concludes our prepared remarks and at this time, we'll open the lines for questions.

[Operator Instructions] Your first question comes from the line of Bob Cornell with Barclays Capital.

I just wonder if you could flush out the '11 prospect for Industrial products. I mean, you talked about -- the revenue's up 4% to 9% and the margin's down. Maybe just take us through the pieces and give us a little more visibility into what you see there and maybe where were some of the variability might be potentially.

Well, I mean, obviously, the largest driver of the Industrial segment is the Transformer business and we've communicated the expectations there, where we expect revenues to be about flat to last year, what you heard from our previous comments and the comments today about the positive trend in orders in that market. The other parts of the business for 2011, we expect strong revenue growth from the Communications Technology. In the guidance meeting, we talked about $10 million to $15 million of revenue from our telephone and the Dielectric business. We've had very strong performance in the Communications Technology business, mostly for military applications. And then in the Hydraulic Tools business, we saw a nice recovery in orders last year. We expect that to continue as we go into this year. And so that, in the aggregate, explains the revenue growth. So what you really see, Bob, is that the revenue growth from the other Industrial businesses at the margin is driving the growth that you see there, and the Transformer revenue is flat year-on-year.

If the orders are picking up in transformers, maybe give us a little color on why we aren't seeing a little bit better pricing environment.

Well remember, Bob, that we're now seeing lead times stretch out six to eight months across the business, and so there is a lag. And what we mentioned again this morning was that traditionally, we'd see a lag of two to three quarters where when we see positive build in the order trend, it takes that long for the results to catch up, i.e. for pricing to be reflected. And that's consistently what's happened in this business over history, and we expect that, that trend should be similar as those markets recover this time around.

And the extension in lead times will in fact cause a shift between the amount of business that we do from open-market bids and the amount of business that we do direct with customers. And again, historically, that shifts to more directly negotiated business, but it does take time.

In Florida, you mentioned that you booked a couple of large-powered transformer orders to go with the expanded facility. I mean, how is the profitability -- you take those orders really to get the plans going? Were the orders taken at levels you can make some money on? Maybe just give us some color on how that is ramping up.

The orders that we've taken so far, and there's other activity clearly going on, just really reflect the demand that we expect to be in that part of the market. And the interest there is among customers to get local supply. And so I think that the orders that we've taken so far and that we expect to take as we get ready to ramp up production in that facility are going to be consistent with where we thought the market would be over time. And those are bigger-ticket items, and so the average price for those large units we expect to be somewhere between $3 million and $4 million. And I think when we disclosed our investment in that facility, we said that over the long term, we saw margins in the large-power market a little below the medium-power market, but still quite attractive in the high teens.

I think our profitability in larger transformers is not different than the medium.

I mean, how much of the margin compression on Industrial is a function of your period costs in the large-power transformer project expansion?

Very insignificant, Bob. If you look at the earnings model, it really is neutralized by the tax benefit but really, really insignificant to the Q4 results and frankly, our expectations for 2011.

Your next question comes from the line of Shannon O'Callaghan [Nomura Securities].

Just maybe first on Thermal, can you talk about what you're seeing right now in China and how you expect that market to play out for you guys as we go through '11 and then beyond?

China is a -- those are open-bid contracts as we bid on new power-generating opportunities and as we have most of the last decade. What we've talked about over the last several years is that we have seen that market become more competitive. That's not a surprise to anyone. We've been talking about that for a long time. And so it has been incumbent on us to continue to fine-tune our business, to localize supply, to appropriately cost our product to be competitive in that market, which we have done, so that we'll continue to be a player in that market. What we see happening right now after a couple of very robust order years in China on the dry cooling side in 2008 and 2009, is a bit of a pause in the market. A lot of that spending was helped by government stimulus and what we're seeing now, Shannon, is the market pausing to absorb those projects as they get billed out. The other thing we're seeing happening is we're seeing more of a focus in terms of China policy on power production shifting to nuclear and to renewables, which we frankly welcome, because we think there is going to be some additional and attractive opportunities for us in that market. So I think over the coming years, we'll see a bit of a shift away from only a focus on coal-fired plants to now a focus on nuclear and renewables. And that's a market we think we can play in as well.

And then just looking at the margins in the quarter, I mean most of the segments came in, I'd say, a little better and you guys were thinking in probably Industrial by the most. I mean, can you just talk about what drove some of the margin puts and takes in the quarter across the segments?

In Industrial products, the segment margins were 8.9% and above our expectations. The operating performance was modestly better than we had anticipated, and the Q4 results also benefited from a $2.8 million credit relating to the partial remediation of legacy environmental matter.

And anything in the other segments of note?

No. If you look at the whole year last year, our project mix tended to be slightly better, and our execution tended to be slightly ahead of expectations. So from the point of view of how the year rolled out, I would say we continue to see the business mix up. I've made some comments in the remarks about the relative difference in LIFO adjustments at year end in the Test and Measurement business.

And in Thermal, Shannon, I think what you saw there was really a reflection of two things. One, continuing good project execution, which we've seen over the last several years as that business continues to improve and stabilize. And frankly, good project selection as well, so pretty happy with the margin performance in Q4 in that business. And to Patrick's point on Test and Measurement, optimistic in terms of the revenue growth opportunities we see now moving forward 2011 and a focus of margin improvement. And as we gear up for a lot of the new platforms that are coming on for our Test and Measurement folks at service solutions particularly, I think there's a lot of engineering investment in the front end of some of those new products as we prepare for the launch. And then as revenue starts to build, I think we get better leverage, and I think we'd start to see margins improve as we get closer to Q4 in 2011 in that segment.

[Operator Instructions] Your next question comes from the line of Steve Tusa with JPMorgan. C. Stephen Tusa - JP Morgan Chase & Co: Just wanted to touch on Thermal here. Can you just talk about -- so what are you expecting for your China revenue in Thermal for 2011?

Well, we don't break it down by region. And we did see a slower order year in 2010, as I just mentioned in response to the last question. But it's difficult to predict because again, remember, that not only in China but around the world, and especially in new power production opportunities, those project-related revenues are sometimes difficult to predict. And they tend to come in big chunks and then there tend to be periods of abeyance where the market does absorb that. I think that what's going to be more interesting for us in China, not only in 2011 but going forward, Steve, is the development of the alternative sources, and particularly, the focus on nuclear, which we think creates some pretty nice opportunities for us in that market.

You can see from the guidance revenues that the decline in China is being offset by growth in the Americas and also, significant growth in the revenue from South Africa. C. Stephen Tusa - JP Morgan Chase & Co: That was really my question. My follow up was going to be on, what's going on in the Americas and any signs of life there? And what's kind of the outlook? I think that's maybe a little bit more of a lever over the next couple of years, it seems to me.

I think that's right, Steve, and what we have seen over the last six month is an encouraging recovery of orders for Thermal in the Americas market, and we're hopeful that that's going to continue. But the other important thing to remember is, we have focused pretty intensely on China over the last several years, but our focus on emerging markets is a much broader than that, and we've had success. And as we develop and broaden our EPC relationships, we've seen opportunities develop in the Middle East, in South America. We think that, obviously, South Africa is going to continue to be important to us in terms of driving revenue over the next couple of years. And then, hopefully, opportunities beyond that. But the other real important market for us to keep an eye on is India. We formed a joint venture with Thermax more than a year ago, and we've spent a year putting that venture together, identifying opportunities and working with our partner, Thermax, to identify opportunities. We're now bidding on those opportunities, and we expect India is going to be an interesting place for us over the next several years. C. Stephen Tusa - JP Morgan Chase & Co: And what is driving the uptick in orders in the U.S., in the Americas? I mean you said encouraging, I mean, what exactly is that? Is that some of the retro fits that are coming through -- and sorry for the third question, my last question.

Yes, fundamentally replacement.

Your next question comes from the line of John Inch with Merrill Lynch.

Could you talk about your Oil and Gas business at Flow? Basically, what sort of trends you are seeing? What happened to the backlog and how you're thinking about that business as the year progresses?

We started to see a pickup in the second half of last year in the gas markets, and we're encouraged by that. We now expect a broader pickup in oil and gas markets for our Flow division in 2011. So we started to see momentum really across all aspects of Flow in the second part of 2010. We expect that's going to continue in 2011, and that will include oil and gas.

And Chris, what happened to the backlog, or what's been happening to the backlog?

In oil and gas specifically?

Yes.

No, I don't have that data.

Strategically, GE announced a very high price to get into oil and gas flow. Does that, in some manner, put a cap on your capacity or opportunity to do deals in that segment? Or possibly, does it make the segment or that division somewhat attractive as a possible divestiture or spin-off candidate?

No. We're focused on growing that segment, John, and we think there will continue to be opportunities for us to do that. As you know, we've got a pretty active and dynamic process to identify acquisition opportunities across the company. We've talked a lot about those opportunities as they relate to Flow. We still think they're there. Our process is still active. And I think, look, as markets recover, I think competition for assets will increase, but I think we're pretty well positioned. And I think we present a pretty attractive strategic buying opportunity for some of those businesses. And so our view in terms of growing that business hasn't changed at all.

And if you look at our Flow business, it really is quite niche-y and obviously, we've got a concentration in food and beverage. So our Oil and Gas business is not a very big part of the overall Flow segment. So we actually see significant opportunity in moving all of our niches forward, and we continue to be engaged in what I would call productive discussions with smaller companies who would like to be acquired by us. So we're driving the segment from a customer-based niche market perspective. And so although we do see pricing for acquisitions in the overall market, particularly in Flow, increasing, I think we will continue to find attractive acquisitions that meet our financial criteria.

Just lastly, Patrick, why was the corporate expense so high, sequentially? I realize it goes up a little bit in the fourth quarter, but it seemed to be a pretty high number. Was there something that was pulled forward in the corporate expense?

A good question, John. We actually made a change to the classification of deferred compensation expense in 2010. Previously, that expense was netted on the other income and expense line against the gains or losses from the investments in the deferred comp plans. And so in Q4, we reported $4 million of deferred comp expense in the corporate expense line. This was fully offset by the gains on the underlying investments, which is actually recorded in the other income line. So there was no net impact to earnings per share, just a re-class.

So how would that affect the run rate then as you think about the 2011 corporate expense line?

It may provide some volatility to corporate expense, but it won't affect the earnings guidance that we have out.

Your next question comes from the line of Nigel Coe with Deutsche Bank.

Chris or Patrick, could you maybe just remind us on the Thermal margin, the decline you're assuming for 2011? I mean, I think it's mix, but could you maybe talk about any impact you're seeing there from price inflation?

Yes, it's a combination of a couple of things. It is a different mix in terms of a different dry cooling mix from China and a different mix of some of the retrofit activity that we did see in 2010.

So the retro was down? I know you're shipping some of those U.S. projects you won in 3Q of last year.

If you look at orders last year, we had a very quiet first half with the book-to-bill less than a half and then it didn't quite double in the second half. And so this really is a very project-based, lumpy revenue segment, with revenues and profitability tending to be quite variable quarter-to-quarter and to a lesser extent, year-to-year. So it's really -- if you step back and look at Thermal, it's more about that hiatus in orders that we had in the latter part of 2009, and the first part of last year. That order trend is improving and frankly, the quoting activity looks decent there, but you are going to continue to have volatility in reported margins.

So it sounds like price inflation is not material here.

No, it really isn't. It's not material to the company as a whole and frankly, not really material to any of the individual segments.

And my follow-on is, you seem to have these tax benefits coming through on a pretty regular basis. I mean, do we read that you're over-accruing on your effective tax rate going forward?

No. I think we try to be appropriately conservative. There's a lot more disclosure around the tax area now than there has been historically. What you're seeing is a company that was built through some significant acquisitions historically, a company that has globalized rapidly from being a North American-based company to now 50% international. And so as we went through that, we dealt with different cycles. We actually, at one point, had three IRS audit cycles going based on predecessor corporations. So what's actually happening now is we're consolidating into a single tax cycle, which will be based here in Charlotte. And we are resolving almost all of the legacy matters. And so what we're doing in the communicated results is just taking that noise out of the communicated earnings, and the 32% tax rate that you see in the 2011 guidance, we feel that that's a good rate to be using for longer-term modeling.

And just finally, I mean maybe I'm just going blind here, but I didn't see the 1Q guidance. I'm assuming that's been just repeated?

It hasn't changed. It's still $0.40 to $0.48, so the midpoint of $0.44.

Your next question comes from the line of Scott Gaffner with Barclays Capital.

I just wanted to follow up on the transformer side of the business. I mean, we talked about price, we didn't talk as much on the cost side. What are you seeing on the price of electrical grade steel? And how are you as far as hedging that recently?

Yes, we are seeing -- well, first of all, steel and copper make up about 60% of the cost of the transformer. And we're not seeing a material impact on pricing so far with raw material cost inching up. We've talked about this before, Scott. A lot of it just reflects the nature in which we sell the product and the contract structure that we offer our customers. And so we've had a lot of success in the past managing those material input fluctuations by giving the customer the choice to give us a large deposit upfront, in which case we can lock in our material costs and manage it that way, or they don't and they agree to ride the risk going forward. And so that choice that we give and that contract structure has really created a lot of success for us in terms of managing ups and downs of cost inputs as we go forward. So as we look forward in 2011, we don't expect those material costs to significantly change our outlook with respect to transformers.

And then any other price cost issues we should be worried about in any of the other segments going into 2011? I mean, you guys are like one of the only companies that we've talked to that hasn't had major issues here in the fourth quarter with price versus cost, it seems like.

Yes. And again, a lot of it, I think, just reflects the way we sell the product and how we structure the contracts and frankly, the success we've had in terms of managing our supply chain and where we source and where we manufacture, so our outlook for 2011, the impact is fairly modest.

Yes. But we have built in commodity inflation into our 2011 guidance, and it's been offset by a pass-through supply chain and lean initiatives.

Your next question comes from the line of Jeff Beach with Stifel Nicolaus. Jeffrey Beach - Stifel, Nicolaus & Co., Inc.: I'd like to ask you to expand a little bit on your acquisition search within the Flow business. The last couple of years, it seems like your focus has been in food and beverage and out of that has come some concentrated acquisitions in food and beverage. Are you putting a much stronger effort into other end markets? And over the next three or four years, are we likely to see the end market division broaden out in Flow?

Well, we have, in fact, concentrated our acquisitions in recent years on expanding our position in the food and beverage markets around the world. And I think those decisions have played out very well for us. And they particularly helped us get an expanded position in some of the attractive emerging markets around the world, where we continue to anticipate that growth in food and beverage and dairy markets will be, in some cases, more than twice what we have seen in the developed markets around the world. So that has been a concentrated focus. We will continue, I think, to look to expand our business in that particular market. Food and beverage now is the defining end market of Flow. Having said that, we're not limiting ourselves in terms of where we think we'll find opportunities to grow Flow. I mean, Flow is a pretty broad-based segment and as Patrick alluded to before, serves some pretty attractive niche markets. And so we we'll continue to look for opportunities not only across Flow, but for opportunities across our three core end market.

Your next question comes from the line of Jeff Sprague with Vertical Research Partners.

Just to be clear on Transformer price, Patrick or Chris, you said stable. But if we think about where you're booking price today and backlog on this six- to eight-month lead time that you're talking about, is that price coming in above, below our equal to the price and revenue that we saw in Q4?

It's sequentially similar. So if you look our 2011 guidance, we're not assuming any price improvement from prevailing rates. So what's actually been happening if you look at Q4 is orders are up in the sort of 10% range, and pricing is sequentially stable. And we really don't expect any significant change in pricing here until some time has passed and the order trends continue to improve. You could tell from the comments today that it has been somewhat of an uptick in the lead time. But in terms of the first six months of 2011, the cake is baked, and that's basically reflected in our guidance for 2011.

And I just wanted to explore a little bit more kind of the China dynamic. So you do have kind of a down swing in Thermal that's unfolding, obviously, South Africa is coming up a lot and offsetting it, and you talked about the Americas a little bit. But if we think about China kind of a transition from kind of the coal-driven demand that you've experienced to transitioning to primarily nuke. Nuke, obviously, would end up being more important than renewables when all is said and done. We've thought about your nuke play more from the flow side, like squib valves and things like that, but I wonder if you could actually give us some color on how you would play in China nuke beyond that? And what kind of order-to-sales conversion cycle should we expect? I mean, if you start seeing things pick up on the nuke side, are we still four, five years away from revenue benefit to SPX?

Well, I think, Jeff, that the nuclear development is longer cycle. And when we talk about opportunities there, one of the things we talk about particularly is our opportunity with moisture-separated reheaters. We had talked about the contract that we just won in Europe for $20 million on retrofitting an MSR into an existing nuclear facility. That is a significant opportunity. And you're right, in addition to Thermal, our Flow segment, particularly given the relationship that we have with Westinghouse, I think, has some attractive opportunities in China as well. And as you know, the Westinghouse technology will be applied to a number of opportunities across China there. So I think there will be additional opportunities for other thermal equipment that we'll be able to sell in Thermal, but MSRs are particularly attractive for us.

I think you've drawn out of your coal plant opportunities, 800 to -- and I guess you got to do it kind of on a gigawatt-adjusted basis or whatever, but megawatt for megawatt or however you want to measure it, is your target content higher or lower on nuke than it is in coal?

Company-wide, total content is greater in coal than it is in nuclear, but the products that we sell into nuclear applications are pretty attractive.

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

I would like to get some additional color on the Teradyne acquisition. Typically, when you do the bolt-ons in Test and Measurement, you've talked about a geographic or a customers or some sort of gap-filling opportunity, and it didn't sound like Teradyne had that, but it was broadly probably overlapped to the number of your businesses. Can you just maybe flush out what the value add is on Teradyne?

Actually, Teradyne brings some attractive technology. They've got some good diagnostic products and some good major OE customer relationships around the world. It's a small business, but it's a global business. And it dovetails very nicely with what we had targeted in terms of OE deal or growth opportunities. We've got 100 additional engineers who are focused on developing on those diagnostic products, and a better opportunity to more deeply penetrate some customers that we previously have not had as significant relationship with. So I think it dovetails very, very nicely with us, and will really help us strength those relationships, those customer relationships.

It also helps us in new product development, where we can make sure that our future new products are completely compatible with existing products in the market, and we can transition the software and the vehicle codes, the legacy market faster into our new products. So it will help us speed up future products and avoid certain costs, and then particularly strengthen customer relationships like Ford and Honda.

Could you comment on margins? And are there other Teradynes in the pipeline like this?

The margins won't be significantly different than the average reported margins of the segment. And there are relatively few small players now in the global diagnostics market. We required a number of -- some companies that were participating somewhat in this market, like Siemens, seem to have stepped back. So I think there will continue to be opportunities for us to broaden our customer relevance, our global reach. Obviously, going forward, our relationship with launch is important to the aftermarket. And then I think there will continue to be opportunities perhaps for additional content as we bring the diagnostic tools to higher and higher levels, our capability and interest in bringing more information to the service delivery. So I think there is interesting possibilities there as well.

Just last one for me, Patrick, when I see the leverage come down nicely to this 2.1x level, is there -- I know you're going to be measured in terms of the buyback opportunities in M&A, but how much lower do you feel that, that leverage can go where you -- and is there a chance that your returns will suffer and you are going to be more motivated to put that cash to work?

Well, as you know, our target range is really 1.5x to 2x leverage, and our model right now, assuming no further acquisitions, shows us frankly significantly below 1x on a net basis, and about 1.8x growth. So we're going to continue to build flexibility. To Chris' comments on acquisitions, I think there will be acquisitions in the market. We will maintain leverage to maximize shareholder wealth. And so I'm very comfortable that we will have acquisition opportunities and if there are significant flaws in our ability to execute acquisitions that meet our criteria, we obviously will be able to maintain the leverage with share repurchases.

This is Ryan Taylor again, just want to let you know, for those that didn't get a chance to ask a question on the call that I'll be available in the office all day today. Please call me if you have any follow-up questions. We thank everybody for their time and for joining us on the call this morning, and we'll talk to you next time. Thanks.

Ladies and gentlemen, that concludes today's conference. Thank you, or your participation. You may now disconnect, and have a great day.