Ladies and gentlemen, good morning. Thank you for standing by, and welcome to the Fiscal Quarter 3 Earnings Release Meeting. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Vice President of Investor Relations, Mr. Keith Kolstrom. Please go ahead.

Good morning, and thank you for joining our conference call to discuss TE Connectivity's third quarter 2012 results. With me today are Chief Executive Officer, Tom Lynch; and Chief Financial Officer, Terrence Curtin. During the course of this call, we will be providing certain forward-looking information, and we ask you to review the forward-looking cautionary statements included in today's press release. In addition, we will use certain non-GAAP measures in our discussion this morning, and we ask you to review the sections of our press release and the accompanying slide presentation that address the use of these items. The press release and related tables, along with the slide presentation, can be found on the Investor Relations portion of our website at te.com. [Operator Instructions] Now let me turn the call over to Tom for some opening comments.

Thanks, Keith, and good morning, everyone. If you can turn to Slide 3, I'll give you a quick summary of Q3 and an overview of our Q4 outlook. Q3 results were as follows: Sales of $3.5 billion were up 8% sequentially. This was slightly below our expectations, due to further weakening of the euro which had about a negative $50 million effect and a slower-than-expected recovery in our Network Solutions segment. Adjusted operating margin improved 100 basis points sequentially to 14% and very importantly, sequential improvement in all of our segments. Adjusted earnings per share of $0.79 were at the midpoint of our guidance, despite the lower sales. And this is an improvement of 16% sequentially and 4% year-over-year. This year-over-year EPS improvement was on a slight sales decline. Free cash flow is very strong at $414 million and that was up 19% over the prior year. Uncharacterized Q3 for us is a quarter of good execution. Strong cost control and productivity improvement enabled us to improve operating margins back to the 14% level despite lower-than-expected sales. And importantly, margins improved across all segments. In CIS, margins improved 100 basis points sequentially and are essentially at prior year levels on sales that are 12% lower than the prior year. We do expect additional margin improvement in CIS in the fourth quarter. We completed the acquisition of Deutsch in April. The integration is on track and as expected. In Q3, Deutsch added about $0.04 of EPS as expected. We're excited about the opportunities this acquisition will provide. They have excellent products and technology as we've discussed before. We're going to add strong channels, the scale to drive cost down and better customer service, and the results we're seeing are a little better than planned, despite the markets being a little softer.…

Thanks, Tom, and good morning, everyone. Just before I get started with third quarter performance, I want to remind everyone that the segment reporting changes that Tom mentioned earlier will be effective with the first quarter of fiscal 2013, which begins on September 29. We will report current results in this new structure for the first time, as part of our January 2013 release, and we would expect right now, to file an 8-K with recasted segment historical P&L information by December, which should be well in advance of the January earnings call. Now let me give you some highlights to the key markets in each of our segments. Unless I indicate otherwise, all changes will be on an organic basis, which excludes the effect of currencies and acquisitions. So if you could please turn to Slide 6. In our Transportation Solutions segment, sales increased 13% on an actual basis versus the prior year, and 6% organically. Sequentially, total sales were up 10%, driven by the acquisition of Deutsch which added $174 million in sales in total, and the breakdown of that between our businesses are $96 million in automotive and $78 million within our Aerospace, Defense and Marine unit. Overall in the automotive market, our sales performed as expected, within an organic increase of 7% versus the prior year. Sales were up 22% in Asia and 11% in the Americas. While in Europe, sales were down 4%. Global vehicle production was approximately 20.5 million units in the quarter, which was up 10% compared to the prior year. By region, vehicle production was up 20% in the Americas, 22% in Asia. However, the EMEA region remained soft, with production down 8%. The strong year-over-year growth rates in Asia and North America were once again driven by the rebound following the…

Thank you very much, Terrence. If you turn to Slide 14, I'll talk about what we're seeing in our order trends. As I mentioned earlier, the order rate started to slow around the middle of the third quarter, particularly in CIS and Networks. And right now, orders are continuing to run around the $3.4 billion per quarter rate, which is down about 3% organically versus our last outlook. So what we saw in March and April were orders running in the $3.6 billion range, slightly higher. And then it began to soften. And as we all know, there's a great deal of uncertainty in most markets, particularly as it relates to the weak economy in Europe. In our Transportation segment, book-to-bill was 1.01. Orders continued to be solid with steady demand in the automotive and commercial aerospace markets. In CIS, book-to-bill was 0.97, with particular softness noted in the Industrial business and in the distribution channel, as customers continue to be very cautious. In Network Solutions, excluding SubCom, book-to-bill was 0.99. But spending by telecom carriers continues to be less predictable and below expected levels. The net of all this is demand in our Telecom businesses, including SubCom, is at one of the lowest levels in several years due primarily to the slow global economy. We're the leading provider of fiber connectivity. And based on the fundamental bandwidth expansion needs, we believe this -- the long-term growth of this market is going to be in the mid to high single-digit range. And we very much earn a strong position to capitalize on this growth. If you turn to Page 15 or Slide 15, I'll cover the current outlook. For the fourth quarter, we expect our sales to be in the range of $3.325 billion to $3.425 billion, which is down…

[Operator Instructions] Our first question today comes from line of Amit Daryanani with RBC Capital Markets.

I just have 2 questions. Tom, maybe when you look at the operating margin profile, you guys are clearly doing a good job of hitting the 14% target on sub $3.5 billion revenue now. The mix though looks like, of margin to just Transportation has been doing a lot of the heavy lifting. How do you think of margins with the other 2 segments? And could you maybe talk about what gets the other 2 segments to 14% off margins, in terms of for a revenue run rate or for the cost initiative, especially in the Network Solutions side?

Sure. Yes, I think your comment that Transportation has been carrying the load is right. And Networks, I think the issue there is with the bottom of the cycle. We think that I would expect that group of businesses to get back to 15% as the revenue comes up. I think inherently, it's -- the gross margins in that business are good. Some of the highest we have in the company. So it's really a volume, more of a volume issue. Clearly, we continue to drive productivity there. On the CIS, I think it was a combination of 2 things. One, the market softened and the channel correction that happened in the first half of the year, in response to that, we took a lot of cost out. So there's clearly significant cost actions we've taken in that business. And now as revenue -- even though it's not picking up, you can see us improving the margin and we should get significant lift in that business, as the margin -- as the revenue picks up.

And then Tom, maybe I'm reading too much into this. But I think you said, that you guys intend to return 2/3 of the free cash flow back to shareholders. That seems a high number at 67%. Whereas in the past, you've talked about 50% to 60%. Could you verify that? And then would the split between buybacks and dividends change on a go-forward basis?

Well, as I said, we ran about 55, 45 return to M&A in the first 5 years. And if my memory serves me right, about 2/3 of the return was buyback, and 1/3, dividend. So dividend is about $1.4 billion and return's about $2.9 billion in that period. I do think because we've made 2 significant acquisitions that really fill the 2 key strategic areas that by -- almost by definition, going forward, that there'll be much more focus on a consistent return of capital and bolt-on acquisitions. I would never say never, but that's what I say when I think -- when you think in terms of the model, the 55%, the 60% to 70%, is how I think of it as a return. I would expect us to continue to raise the dividend, as long as global economies are sound and our earnings are keeping in line with our target dividend yield. I hope that answers your question.

Our next question comes from line of Matt Sheerin representing Stifel, Nicolaus. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: Just a question on the commentary on the CIS business and specifically, the channel softness. Obviously, you went through an inventory correction there. And it sounds like distributors are being more cautious. But what is sell-through look like in inventory levels? Are they bringing down inventories yet again? Or are they just being super cautious here?

Matt, I think it's more of the latter, super cautious. A quarter ago, when we were all together, I think we were feeling cautiously bullish as the inventory correction was over and we saw in Q2, and in Q3 actually, the lift in sequential revenue through the channel and their sell-throughs were going up. But as this slowdown began to happen in mid-May, with U.S. jobs peaking and all those other things, everybody's just starting to dial back a little bit. I don't think the inventory and the channel, a problem. I think just that -- what we've gone through over the last 5 years, a couple of times collectively, everybody is managing that much more closely, and including ourselves, where our inventory days are actually down this quarter. I think it's just -- everybody's a little bit gun-shy. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: You're getting the sense that the distribution point-of-sales has weakened as well, going into this quarter?

No. I think the slope is just changed. It was ramping, and now it's flattening, and I think that's just leading the caution. Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then on the OpEx side, it looks like you're holding margins fairly well, given the volume softness across different parts of your business. If we're in this sort of a component cycle that's stuck here and we continue to see softness, are you looking at other cost-cutting measures, whether it be in CIS or other businesses, particularly networking, where it doesn't look like things have bottomed yet?

I would say, Matt, I think as we proved over the last year, if we do, we will continue to assess where are we from a volume level and we will take actions as appropriate. So I think what you can expect, and I think what you saw, like we did in CIS over the past year -- CIS was an area that we had to adjust it. We're happy that in the third quarter, we're back to prior year OI levels even on lower volume. Essentially in there, we're going to prove it. So we see markets change that fundamentally, we sort of had a higher level that we will take -- we'll evaluate further cost out. So... Matthew Sheerin - Stifel, Nicolaus & Co., Inc., Research Division: It doesn't sound like you're at the point now where you're ready to do that. You feel like things have at least, fabbed -- aren't you getting materially worse? Is that fair or...

I'd say there's not much visibility, Matt, but what we do have is a pretty robust set of alternatives of what we do, depending on the circumstances. And even though, as we entered the second half of the year, we were expecting, I'd say modest recovery and normal seasonality, we weren't -- we kept our cost structure more conservative to that. And that's why, we were able to get the margin to where it is. So that's -- we're taking a very conservative view, not in a way that would hurt our responsiveness to customers. But it's uncertain out there, and so we're managing it accordingly.

And we'll go to the line of Shawn Harrison representing Longbow Research.

I just wanted to talk a little bit about Deutsch. It sounds as if margins are going to be better exiting the year than you anticipated, and high single-digit revenue growth year-over-year. Maybe if you could just speak to where that revenue growth could get over the next 12 months? Can you see it accelerate, given the feedback you're getting from the channel? And then, why is profitability running a little bit better than expected?

I think a couple of things. On the profitability, the teams had been tremendous at getting at the early synergy opportunities ahead of schedule. So that's helped. The revenue is off slightly, and that's economics, but it's still up year-over-year and the business is solid. I'd say it's -- we're not calling next year yet. It's a little outside our window, and we'll talk about that next quarter, but we're very bullish about the business. We do expect that we'll get lift through the channel because they -- especially in their Aerospace and Military business, they didn't really have much there and we bring a lot there. We're the biggest player to those channels. So I mean, we'll definitely be able to help that there and that's part of that channel strength comment before. And I think we'll continue to find more opportunities for cost synergy. Just because of our size, helping them buy materials cheaper, and things like that. So we feel good about it. It's a little bit hard to call the market, the end-demand environment, but -- much like we did with ADC, the end-to-end system we can offer in fiber, we have that end-to-end hours connectivity we can offer into the Industrial and commercial market, every application we can serve. So we're very, very excited about that.

Okay. And then as a follow-up, just with restarting the share purchase program and understanding that you have some debt coming due, how aggressive do think you'll be in terms of repurchasing stock during the fourth quarter?

Well, we're going to get started. As you know, this quarter, I think our main thing is to be consistent within a certain range. And I think that's the thing that -- we have bought back a lot of shares, but when we've made acquisitions, we've turned it off. They were big acquisitions. You can expect us to be consistent in -- and I'd say, think about the 150 to 250 range.

Our next question comes from line of Sherri Scribner with Deutsche Bank.

I just wanted to get a little bit of detail on what you're seeing or what you're hearing from customers in the networking segment, and clearly there's lots of long-term demand drivers, but as you've noted in that segment, it continues to be weak. Do you have any sense from your customers about when they expect to see a pickup in that market?

Yes. We talk to them regularly. I think it really -- it's a customer-by-customer situation in that business. Last year, Europe was very strong, for example, and the customers were more aggressive even than we thought. This year, they've turned that back. I think it's some of that uncertainty. In the U.S., it started very slow because of all the strategic activities that was going on in the U.S. telecom market. So we have seen the U.S. pick up. It's just not anywhere near the rate, and it was slow last year in the second half. So I think it was a combination of caution, as well as -- if I'm going to spend a little more capital, and I believe that at -- overall, CapEx spending is down, a little more going into the wireless versus the fiber, right now. That's not unusual a few years back. The big push in the fiber to the home, or fiber deep into the premise-type program, those have slowed down. No surprise. We fully expected that. So it's really a case-by-case. And we've seen China slow a bit. It was very strong for us last year, slowing down this year.

Okay, great. That's helpful. And then in terms of the consumer business, consumer devices. That has been a segment where you've been struggling. This quarter, you mentioned PC's down, but you said tablets were a bit better. Can you give us a little more detail? And do you think you're gaining share in that market?

I think we're growing with the market now, Sherri. I think, as you know, we had -- before the double whammy, the customers -- our customers that were losing share, we were strong with them. We hadn't established with the customers that are winning share. So in the last year, it's been about stabilizing the business, both from a top line and a market position and a cost perspective. I think our team has done a tremendous job of doing that. And now we have, we've won several important programs that should -- I used to call it a beach head. I think it's more than a beach head for us now. Still a small part of our business. But this last quarter, in terms of the programs you want and the orders we got, we show good [ph]. So I'd say we're now growing with the market, and that tablet and smartphone market is growing 40% to 50% or 30% to 40%, something like that, and we're finally growing with that, even though it's a small part of our business. So for us, the proof point is, we can serve these customers. We have the technology, and we can get more than 1 or 2 wins. We still have to build on that.

Our next question comes from Jim Suva, representing Citi.

This is actually Samuel Meehan, on behalf of Jim Suva. I want to get a couple more details about Europe. When you look at the weakness in Europe, European automotive, have you seen any mixed shifts or model push outs that would have a significant impact on content dollars per vehicle?

No. Not really. I'd say the strength is still in the high end and a lot of that is exported from Germany to the U.S. and China, and that part is still robust. Most of the weakness is in the Southern Europe OEMs. So we have not seen any negative shifts in content because of mix of cars.

Now we have a question from Wamsi Mohan with Bank of America.

This is Ruplu filling in for Wamsi. Just -- you've talked about the margins and transport connectivity. I just wanted to touch on that again. Some margins improved quite a bit, 140 basis points sequentially. How much of that was Deutsch and how do you see -- how should we think about margins going into the September quarter? Do you think you can maintain that higher margin?

#1, Deutsch as we talked on our last call, both in Transportation as well as the total company, is about 10 to 20 basis points of NOI benefit. So when you look at that part of the question -- when you look at the fourth quarter because we will have seasonal slowdown in Europe, we do participate in the shutdowns that the OEMs have. We do expect our margin in Transportation to be about 16% in the fourth quarter. I think when you look at what's offsetting that, we do expect a further improvement in our CIS segment, going the other way, that helps us to cost improvements that we've had there in CIS. The combination is going to allow us to keep our margin up in that 13.5% to 14% level, Ruplu.

Okay, got it. Just as a follow-up on subsea. I see you've lowered the guidance a little bit from 5 20 to 4 90 for the full year. Last quarter, you talked about one contract coming in later this year. Is that the contract that is being pushed out? And you also mentioned something about $110 million. When did those come into revenue?

If you look at that, Ruplu, the 110 we booked during the quarter was actually a number of smaller projects, really in the oil and gas area. The one project that we've talked about last fall, you're correct. That customer has not completed his funding yet and that's really why the revenue is down from the 140 that we expected last quarter, in fourth quarter, down to the 120. The 110 that we'd talked about, they will be contracts that start up next year and it will be as part of next year.

Again, we have a question from Amitabh Passi with UBS.

This is Jim Hillier for Amitabh. I was hoping in light of some of the macro trends, you can provide us any color on the current pricing environment as well as how lead times are currently trending?

Pricing overall I'd say, not any big change. I mean, I think there's always pricing pressure in the business. But we're not seeing any unusual pressure. It always feels like a lot of pressure. But nothing unusual here. So I think we'll continue to be in that -- I'd expect to be, plus or minus at 2% price erosion range.

And on lead times, lead times have been at normal levels. I mean, certainly on certain products for certain customers and applications, that's specific, but on an overall basis, you look at our lead times, there's no extension or contraction of them. They've been at normal levels for most of this year.

I think what we see more is just change orders. A little more frequent. So it's people waiting, waiting to buy until they get a little more sure. So it's not so much that the fundamental lead times are reducing, but we do see a little more churn in the order.

Okay. And if I could also follow-up on your telco business. It appears that while spending has been weak, if look at the budget outlooks for some of the major North American carriers, spending looks more back half-weighted this year. And from your customer conversations, do you think that ultimately we could see some improvement in this business by year end? And also as a follow-on to that, if you any update on the NBN ramp, that would be really helpful.

Say, for us, we're only 2 months away from our year end. So could there be, yes. I'd say the general feedback has been it's coming. It's coming. And it's been a little slower than obviously, than we expected. Could it happen by the end of the calendar year? I mean, our fundamental view is that pent-up demand is happening because of this. Because you still have to be able to invest more in the wireless part. You still have to get the signal in the ground to have the coverage and the capacity really work. So I'd say we expect the investment to pick up in our portion of the network, but it's hard to call the timing right now. I mean, a quarter ago, we were feeling pretty good in seeing the ramp, that it was our Q3 and Q4 which would have been the June and September quarters. We got half of what we expected in Q3 and it's not going to -- right now, our call is that it's not going to happen in Q4.

And on your NBN -- NBN for our 2012 is about $20 million. We're going to -- we started to get some of that program, started to ramp here on our quarter 3. A similar amount in quarter 4. Next year, right now, we would expect that to increase up to $50 million, $60 million, as that program continues to ramp.

And our next question comes from the line of Mike Wood with Macquarie Capital.

Tom, with the recent management changes, are you expecting any sort of -- after everyone takes over and gets set in the job, are they supposed to come back with cost savings initiatives or growth initiatives, investment suggestions?

We always expect that. I think with this -- look, I think we'll get some fresh looks at things. Right? But all these 4 leaders have been in the company from anywhere from 3 to 25 years. So they may know the company pretty well. We -- they've been part of the senior team for several years now. So they understand even the business they're going into, while it may be new for them to run, they understand it pretty well. So -- but I do think that my comment on vitality, and what I mean by that is, it's good when people shift around, especially if it's not that disruptive because they've been around and they already know the business. So I do expect to get new ideas. Absolutely. I don't expect us to turn the place upside down, as a result of it. But I do expect that we're going to be stronger as a result of these changes.

Okay. And on the Transportation side, your orders were above the growth of global OEM production. Your sales reported were slightly below that. Has that segment also been impacted by the destocking that you'd mentioned, just given the uncertainty ahead of the plant shutdowns in Europe?

No. No. Really, Mike, when you look at it, what you saw in the third quarter of our sales being a little bit less in production, really just due to our Asia content per vehicle and what we've got in Japan, just being such a weight on the production growth. In the fourth quarter, we expect our sales to be greater than production and we expect it to be that way for the year. So it's really just how the production builds were going around the world.

And we will go to the line of Mike Wherley with Janney Capital.

I just wanted to ask on the restructuring. So you're not talking about any further actions right now. But the restructuring that you've already done, is that going to roll through immediately in the fiscal fourth quarter? Or will it be more of a fiscal 2013 event?

Most of the restructuring has to do with the Deutsch integrations. So when you look at that, it mainly relates to Deutsch and the integration of Deutsch into our structure. That will come in the relationship as we have the Deutsch integration. There are some tailing items that are coming. But most of those costs are already in, or will be in, in the fourth quarter. So some of those costs you see are tails related to prior actions.

Okay, so in the CIS segment, for example, is the benefit already being realized in the third quarter? Or will there be some upside in the fourth quarter?

As I've said, we do expect CIS margin to go up sequentially. There is a little bit more benefit because the volume's coming down. But there will be a little bit of benefit in the fourth quarter.

Okay. And then just on the smartphone and tablet commentary. Are you getting on to more platforms? I mean, I know you mentioned a few wins. But is it about a broader set of customers? Or is it more content uptake on each platform that's sort of helping you out there? Which is it more?

It's more customers. It's a couple of customers we really haven't had much of a position with, and now we have a starting position with them. So we have more customers in a broader way and in a deeper way than we did a year ago, is the way I think about it.

Next, we'll go to the line of Craig Hettenbach with Goldman Sachs.

Tom, you mentioned -- or commented on the stable trends in the automotive market. Can you talk about just how suppliers and customers are managing inventory through this environment? Did you see any type of change through the quarter?

No. I think -- I mean, everybody is tight. Where we see it is, as I kind of mentioned earlier, a little more churn in the releasing of orders. So which -- I think it's typical. Right now, in Europe, we're going into the shutdown season. So the Southern OEMs are going to shut down for more than normal, but that's no surprise. We've been expecting and planning that for months. I think it will be kind of a normal shutdown in the North. But inventory levels, whether on the lot or in the channel, seem to be in pretty good shape, and our inventory levels are in good shape.

Got it. And then if I could just follow up on the smartphone and tablet piece, you commented, you think you now have a beach head. Any thoughts around the types of technology? I know you've done antennas, how the kind of connectors fit in, and is there an opportunity to kind of expand your content on programs as you go forward?

I think there's an opportunity to expand it, but within the products that we know best. So right now, our focus is on the key things we do, antennas connect, and connecting systems. So -- no, we're not -- not to say we will never stray from that, but I think there's just so much opportunity as we continue to get better. The good news is we have the technology. We have the products. It's for us. It's -- our problem in the past has been more about execution and the pace of execution, and we're really improving that. And now we have to build a track record. We earn a couple of programs, do well, and then we earn a few more. And that's the way we're -- the approach we're taking.

Okay, and how much -- I know you guys have talked about the management change about a year ago, in terms of the customer interface and things like that, how much has that come into play, in terms of the ability to gain traction now?

The changes we did with our channel?

In consumer.

In consumer, I'm sorry. That's helped a lot. Organizing around the vertical markets which -- it took us a while to take the CIS and break it into these global vertical businesses. But it's -- one of the first we did was consumer and that has made a massive difference, as well as the leadership that's in that group. So they've made all the difference in the world. We have better customer intimacy and relationships and we're executing better. And we just have to keep doing it.

And next, we go to the line of Anthony Kure with KeyBanc.

Just a couple of quick ones. Can you just talk about China, specifically how it progressed through the quarter, and if you saw any inflection points, maybe to the negative and then any change in that, relatively recently, just maybe talk about the linearity of China through the quarter if possible?

I think China has been steady, but slower than we thought. When we sat there a quarter ago, we would have been expecting, and as you know, the government was keeping interest rates up, trying to cool things off, trying to cut back on some of the speculation in housing that was going on and trying to head that off and of course, balance that with economic growth. We saw that for sure, the first 2 quarters. We thought by the third quarter, that, that would begin to pass and that stimulus would happen. Now, there's still applying stimulus. It was announced and things like that, but we haven't really seen it pick up. Auto has been still very robust, although slowing a little bit slower than it's -- for sure, than it has the last couple of years, but still high. 15%, 18% for us. But a lot of our other businesses are flat to -- even slight. In some cases, slightly down. Now, some of that, is the exports are down because of Europe and U.S. But it's -- I haven't seen an inflection point. No. I'd say our people on the ground there expect things to get better because of what the government is saying. But it's hard to call.

Okay. That's helpful color. And I guess in a similar vein, instead of China, maybe on the enterprise IT market, I'm just hearing consistently now that the sea level folks make -- the decision makers here are really taking a sharper eye on budgets in the second half of the calendar year. I'm just wondering, is that -- are you seeing that? And has that had any differences among the geographies, either better or worse?

I'd say we're seeing it pretty broad-based. That second quarter to third quarter, our business that serves those markets picked up, recent sequential pickup, we would have expected that. Again, go back 3 months, we would have expect some sequential pickup in Q4. We don't expect that now in this outlook. So I agree with you. We're feeling that as well.

And we have a follow-up from Amit Daryanani with RBC Capital Markets.

I just want to maybe talk a little bit about the commodity cost, how that's playing out in the September quarter and your progress there? And then secondly, given the fact that FX has been a fairly severe revenue and to some degree, and EPS headwind for you guys this year. Any confidence on a hedged FX on a rolling 12-month basis that you guys come up with annual guidance?

Amit, it's Terrence. So 2 things. Let me take the second piece first. So #1, we do hedge transactionally. We don't hedge translationally. I mean, you are right if you look at this year. It is a significant headwind that we're dealing with, almost $400 million with the euro weakening. I don't see us changing our policy around hedging translation because of -- our earnings are also hedged because that translation comes through at the OI margin. When you look at metals. Metals is a slight benefit right now. As you know, we have a risk management process that we do on how we fix. So really when you look at it, metals are a slight benefit, not significant due to the position we put in place when copper and gold and silver were a little bit higher. So we're relatively fixed out for the next 6 to 9 months pretty firmly. There may be some benefit if metals stay where they are and later next year. But right now, it's pretty minor benefit.

And it goes on the metal hedging. It's still a rolling kind of 2 quarter-out process, right?

It actually goes out 18 months. But the more current it is, the heavier we are fixed from a ratio of what we buy, and then it sort of goes out overtime. But you're right, it's a rolling 18-month program.

This is Tom. Before we cut off the call. Just a few closing comments or 1 closing comment. Terrence and I have been together since we separated in the year before that in the business, and it's been -- for me, it's been fantastic. Many of you, if not all of you out there have had the opportunity to deal with Terrence and the consummate Pro. A guy who loves, and committed to the company, and he's made it a lot better. And in his new role, he's going to make it even better. So I know, it's not easy for him to unplug from this part of the job. But boy, I'll tell you, he's done a good job. He's left our organization in great shape. He's been integral in recruiting a tremendous successor. And he's going to take this other business, in my mind no question, to another level. So thank you, Terrence for everything you've done. And thanks, everybody, on the call. I appreciate it.

Thank you, everyone.

Thanks for joining our call. Please feel free to follow up with the IR team, with any follow-up questions. Thanks.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation, and for using the AT&T Executive TeleConference. You may now disconnect.