Welcome to Pall Corporation's Conference Call and Webcast for the Fourth Quarter of Fiscal 2012. Today's call is being recorded and simultaneously webcast. [Operator Instructions] We'd like to remind you that the company's fourth quarter and full year press release is available at www.pall.com. Management's remarks this morning will include forward-looking statements. Please refer to Slide 2 or request a copy of the specific wording of this qualification of the company's remarks. Management also uses certain non-GAAP measures to assess the company's performance. Reconciliations of these measures to their GAAP counterparts are included in slides at the end of the presentation. At this time, I will turn the call over to Mr. Larry Kingsley, Pall Corporation's President and CEO. Please go ahead, sir. Lawrence D. Kingsley: Good morning, and thanks for joining us. I'm here today with Lisa McDermott, our CFO; and Brent Jones, our VP of Finance. Our remarks this morning will be on a continuing operations basis, which excludes the results of the Blood product line, which we divested on August 1. I know that most of you have read our release and know the key headline. We executed a strong fourth quarter and turned in very solid results for the full year. Our pro forma EPS was a record $0.99 or $0.86 excluding Blood, and our full year results met the midpoint of our original guidance at the beginning of the year, and that's despite second half economic and FX headwinds. While the sales result for the quarter was strong, our cost to serve, essentially the cost to catch up from Q3, remained high. But before I jump in to our results, I want to take a few -- make a few preparatory comments about what we've accomplished over the last year and what we anticipate for the year in front of us. I first spoke to you as Pall's CEO in December. At that time, I said that I viewed Pall as a huge long-term value-creation opportunity. I believe that statement even more so today. We talked about foundational work that we had to do, particularly with respect to people, process and technology, and I'm happy to report that we've made significant progress but with much more to do. With regard to people, as you know, there have been a number of changes to the executive management team. I'm incredibly pleased with the talent that we now have, as well as the developing bench strength behind them. In the fourth quarter, we added business development capability, which is critical to our growth strategy. With regard to process, in the quarter, we focused almost exclusively on restoring customer service levels to pre-SAP implementation levels and are now working toward best-in-industry metrics. And with regard to technology, we're increasing R&D spend. We're also taking a much more focused approach as to where we invest. We've added significant talents in R&D to accomplish this. Last year, I articulated the strategy which highlighted our move toward more emphasis on strategic acquisitions to enable core growth. We will do so in a disciplined manner. This may include enhancing our current offerings but also moving into adjacent product markets where our applications expertise and our global channel are a natural fit. We closed the transaction with Haemonetics on August 1 as planned, and there are no other planned divestitures. In short, we believe that we can more actively organically manage the portfolio to position ourselves well for future growth. We're building an acquisition pipeline and expect that we will begin to more consistently acquire about a year from now. Our team has done a solid job integrating ForteBio, and we anticipate that it will exceed our preacquisition model for both growth and return. I'll now move to our outlook generally. The global economy is concerning with a large dose of uncertainty. We assume that Europe will worsen, particularly for our Industrial business, China will grow but only significantly in about 1/3 of our vertical markets and the Microelectronics global end markets will not recover as previously assumed. However, all in, I think we have gotten ahead of the concerns, and we have a plan to deliver reasonable results in the face of a choppy environment. Consistent with this, as you know, we've committed to $100 million in structural cost improvement over the next 3 years. We are targeting that half of that will be accomplished in fiscal year 2013, this year. This program is well underway, and I'm confident that we will achieve our target. It's critical that we rightsize our fixed cost structure at the same time that we reposition SG&A to take advantage of where growth can be achieved. So let's move to the quarter discussion. We executed a strong recovery from our ERP-induced challenges in Q3. Nearly all of the shipments that were deferred into Q4 shipped in Q4, bringing down our past dues significantly in the quarter. To be clear, again, we have a long way to go to claim best practice, but the team should be congratulated for how well they worked across function and with our external supply chain to restore confidence. Very solid execution. We're beginning to make tough choices regarding our systems business and the required linkage to consumable sales. At the same time, our sales force is being repositioned and compensated to deliver the Pall value proposition to win consumable opportunities based on our industry-leading solutions capability. As we walk through the slides, you'll see that we've added emphasis on the business performance of our consumable products as we believe it is more meaningful to understand that in analyzing current trends. So with that, let's dive into the specifics. I'll start with a brief overview of our Q4 and full year financial performance, and I'm on Slide 6. Sales grew about 6% excluding FX in the quarter, and 7% for the year, with contributions from both segments. Pro forma EPS increased 32% to $0.86 per share in the quarter and 16% to $2.80 per share for the year. Operating margin improved 370 basis points in the quarter to 19.3%. And Lisa will discuss the key drivers in a little bit. For the full year, operating margin came in at 17%, a 50-basis-point improvement, still negatively impacted by the ERP implementation expense and, in particular, the customer Hypercare transition-associated costs that we discussed last quarter. Free cash flow for the year increased 17% to $316 million. On Slide 7, Life Sciences sales grew by 8% in the quarter and Industrial grew by 5% excluding FX. Consumables, which comprised about 84% of total sales, grew almost 14% in Life Sciences and 5% in Industrial. Systems, which comprised 60% of total sales, declined 6% overall as growth in Industrial was offset by a decline in Life Sciences. Some of the decline in Life Sciences reflects our rationalization of low margin Food & Beverage systems, again, where we don't have that razor-blade opportunity. Looking at the year, sales in both Life Sciences and Industrial increased a solid 7%. Consumable sales grew 7% in Life Sciences and 5.5% in Industrial. System sales grew 13% in the year, with both segments achieving double-digit growth. Now I will discuss the key drivers of the Life Science sales and the orders results in the quarter and the year on Slides 8 and 9. First, look at consumable sales. The growth in BioPharm consumable sales of almost 20% in the quarter and 12% for the year reflects continued strength in the biotech sector. The new Octet and BLItz products from ForteBio added about 4% to consumable sales growth in the quarter and 2% for the year to the BioPharm result. Consumable sales in Food & Beverage excluding the impact of the divestiture of our Verona business in Europe increased organically by about 12% in the quarter and 4% for the year with all regions contributing. The growth was driven by new applications and products. Medical consumable sales growth in the quarter reflects growth in our OEM channel. For the year, this was partially offset by specific customer inventory reductions and weak economic conditions in Europe affecting hospital spend, as fewer hospitals spent their -- on consumables accordingly and there were fewer hospital bacterial outbreaks. System sales declined 31% in the quarter, primarily due to reduced CapEx spend in the Food & Beverage market and also a reduction in BioPharm system sales during the period. The year-over-year comparison also reflects Q4 2011 large system sales in Asia. Life Science orders increased 14% in the quarter, with similar growth in both consumables and systems. The growth was driven by BioPharm. Consumables sales in Process Technologies, and I'm on to Slides 10 and 11, which consist of Energy & Water markets and the Machinery & Equipment OEM markets, were flat in the quarter, mainly due to reduced capital goods shipments to the Energy market, which, as you may recall, were extraordinarily high in Q4 of '11. This was offset by increased consumable sales in the Machinery & Equipment markets, reflecting strength in mining and mobile OEM sectors. For the year, consumable sales in Process Technologies grew 8%, reflecting growth in all of the process technology markets. On a full year basis as well, sales to Machinery & Equipment OEMs were particularly robust. Aerospace consumable sales were up 22% in the quarter, reflecting strong growth in both Commercial and Military spares. For the full year, Aerospace consumable sales increased 12%. Military sales were particularly strong, increasing 20%. Microelectronics consumables sales increased modestly at 2% in the quarter and down 3.5% for the year as growth in the Americas and Europe was partially offset by continued weakness in Asia. So moving on to Industrial systems performance. System sales increased 7% in the quarter and 15% in the year. This was primarily driven by the energy market reflecting investment in oil and gas infrastructure in the Middle East. This was offset by a decline in Municipal Water sales in the year, as capital spend for water plants remained weak with deferred spending and delayed project decision-making. Looking at Industrial orders for the quarter, growth was 9%, primarily driven by systems orders, which increased over 33%. Systems orders were particularly strong in the Energy and Municipal Water markets. Consumables orders were up about 3% in total. So now on to Slide 12 for a look on a regional basis. Sales in the Americas increased 23%, again tied to our operational recovery. We estimate that about half of the year-over-year growth in the region for the quarter was recovery and the other half consisted of organic growth of about 7%. Contribution from ForteBio and the acquisition of our Brazilian distributor, those 2 combined, contributed about 4%. Orders in the Americas increased about 16% in the quarter. This reflects recovery demand as well. Orders in Latin America were particularly strong at over 50%. This added about 3% to the Americas total orders growth. The robust sales growth in the Americas was dampened by flat performance in Europe and in Asia. Sales in Europe were flat for the quarter, but orders in Europe did increase at just under 5%. The sales result in Asia was impacted by a 21% decline in system sales, as well as an 8% decline in the Microelectronics market. Sales to the emerging markets in Asia declined in the quarter on weakness in China and India. However, we do anticipate that both China and India will grow just under or at double-digit rates in '13 based on known projects. Japan also performed well in the quarter based on the ongoing biotech investment there. Orders increased 16% in Asia. Systems orders increased over 70% from Korean firms in particular working on large Middle Eastern projects, while consumable orders increased in the low-single digit range. So with that, I'm going to turn this over to Lisa to wrap up the financial review with some details around profitability drivers and cash flow performance in the quarter and for the year, then we'll finish up with our outlook for the fiscal year 2013.

Okay. Thank you, Larry, and good morning, everyone. I'll start with a review of segment performance, jumping off of Larry's remarks on sales, and I'll begin with Life Sciences. Reflecting the favorable mix and absorption benefits from solid consumable sales growth in the quarter, particularly in Pharmaceuticals, Life Sciences gross margin improved 170 basis points to just under 58%. Favorable pricing and the benefit of sales channel changes from distribution to direct also contributed. However, this was partly offset by about 130 basis points of FX headwind related to the deterioration of the euro. For the full year, Life Sciences gross margin improved 130 basis points to 58.2%, primarily driven by the same factors as in the quarter although FX was neutral for the year. With SG&A increasing about 5% excluding FX and down 70 basis points as a percent of sales year-over-year, the flow-through resulted in Life Sciences segment margin improving by 190 basis points in the quarter to 25.7%. Turning now to Industrial. As compared to the unfavorable product mix and execution in the fourth quarter of last year, gross margin improved by 280 basis points year-over-year. Systems gross margins improved 600 basis points or 6% year-over-year with improved execution and success of higher margin water trailer unit rentals. Some pricing achievement and absorption also provided some benefit as well. That said, gross margin also improved sequentially by 60 basis points from 45.4% in Q3 to 46% this quarter. For the full year, Industrial gross margins increased 10 basis points year-over-year to 45.9%. That mainly reflects some improved pricing. The cost reduction efforts in Industrial became evident in Q4 in SG&A. And this was flat excluding FX year-over-year and down sequentially by 1.5%, then that's despite sequential sales growth of about 17%. The 140-basis-point year-over-year decline in SG&A as a percent of sales, together with gross margin improvement, yielded a 490-basis-point improvement in segment margin in the quarter. The Industrial segment margin in the year improved to 14% from 13.7% last year. Turning now to Slide 14, and recapping our earnings per share performance. I'll spend a moment on the restructuring expenses recorded in the quarter, and these amounted to $36 million, approximately $0.25 in EPS and were principally related to cash severance for the structural cost improvement initiatives that Larry mentioned earlier. Again, this is reflective of what's needed to align our cost structure post-divestiture of the Blood business and to properly prepare us for what we believe will be a choppy economic environment going forward. Excluding these items, pro forma earnings per share in the quarter were $0.86, an increase of $0.21 compared to last year. Bridging the increase, the growth in operating profit contributed about $0.22, and this was net of $0.05 of transactional FX headwind, and the tax rate contributed about $0.04. Translational FX headwind also was about $0.05; together, $0.10. To recap the year, sales were $2.9 billion, including Blood, and $2.7 billion excluding it, an increase of 6% over last year. Foreign currency translation decreased the top line by about $27 million or about 1%. And so to be clear, excluding FX and Blood, sales were up about 7%. Overall, gross margins improved 70 basis points to 51.7%, primarily driven by the improvement in Life Sciences. Now SG&A excluding FX increased 8%, and the increase in SG&A reflects many of the things we've been talking about through the year: the ERP implementation-related and customer Hypercare costs incurred as we concluded the last phase of our global deployment; increased expenses from geographic expansion into Latin America, the Middle East and Asia; and the incremental costs related to the acquisition of ForteBio. And these increases were partly offset by savings generated by cost savings programs, most notably in Industrial. Turning to income taxes, excluding discrete items, the underlying tax rate in the year was 23.2%, and this compares to 26.5% last year and reflects the tax benefits associated with the company's Asian and European headquarters. Pro forma earnings per share in the year were $2.80, an increase of $0.38 compared to last year. And bridging this increase, the growth in operating profit contributed about $0.25, and this is inclusive of transactional FX headwinds of about $0.04 for the year. And the tax rate contributed about $0.12, and the share count about $0.01. Translational FX was neutral to EPS for the year. Turning now to cash flow. Operating cash flow in the year, and I'm on slide 15, was $475 million, an increase of $45 million or 10% compared to last year. So we saw increased earnings exclusive of restructuring costs as most of these costs, the Q4 costs, will be paid in FY '13 and a reduction in inventory offset by some increase in receivables. The most significant uses of cash during the year included $210 million that we return to shareholders, and this was dividends of $89 million and stock repurchases of $121 million, $168 million for the acquisition of ForteBio and our Brazilian distributor and just under $160 million in capital spending. Wrapping up the discussion of our liquidity, our cash position stood at $500 million at July 31, 2012, and our net debt position was $196 million or 11.5% as a percentage of net debt plus equity. This compares to 9.1% at July 31, 2011. I'm going to turn to some forward-looking items before Larry wraps up with a full year guidance of fiscal 2013. I'll briefly cover the Blood divestiture and foreign exchange to set the stage. So I'm on Slide 16, and reviewing quickly the impacts of Blood. I'm not going to review all of the pro forma impact on earnings as we've done so in 2 prior calls, but I will highlight that accounting for the proceeds of the transaction, net of tax, we move from a net debt position again of $196 million at year end to a pro forma net cash position of $245 million. So in conjunction with the EPS guidance, Larry will discuss assumptions around these proceeds. Now moving on to FX impact, I'm on Slide 17. Looking at the major currency pairs impacting our business in Q4 compared to a year ago, the euro weakened against the U.S. dollar by 13% and the pound by 9%, and the pound also weakened against the U.S. dollar by 4%. The dislocation of the euro in the second half of our fiscal year was a headwind to Q4 and, more importantly, to fiscal year 2013, which I'll discuss in a moment. To review the Q4 impact again, FX headwinds adversely impacted EPS by $0.10, with $0.05 of translational impact and $0.05 of gross margin degradation transactional impact. Looking at the major currency pairs for the full year on a basis weighted to our results compared to a year earlier, the euro weakened against the U.S. dollar by about 4% and against the pound by about 3%, and the pound also weakened against the U.S. dollar by 1%. Conversely, the yen strengthened against the U.S. dollar by 5%. Together, these movements adversely impacted EPS by $0.04, and this was all transactional-driven as the translational impact was about neutral to EPS for the year. Turning now to fiscal 2013. We are forecasting that FX headwinds will adversely impact earnings per share by $0.22 to $0.24, with $0.07 to $0.08 of translational impact and $0.15 to $0.16 of gross margin transactional impact. We have taken actions to mitigate our long euro exposure, including hedging forecasted transactions to cushion the risk of further weakening. Our need to enter into hedge agreements will lessen as we make changes to our transactional flows to minimize -- to maximize natural hedges through better currency matching of revenue and expense. That concludes my report, and I'll hand this back to Larry. Lawrence D. Kingsley: Thanks, Lisa. As we look forward, as I said, the market environment, it's mixed. Q4 was solid, and we did recover from our internal issues. Our assumptions for 2013 correlate pretty closely with the macro regional depiction that we have on Slide 18. Against that comparison, we'll outperform against the general environment in Asia and the Americas, but expect that we could, as we said, contract at a low- to mid-single digit rate in the Eurozone for the year. Slides 19 and 20 depict our modeling assumptions for the year, which are pretty consistent with what we said in the third quarter. You can see the region and the segment expectations for growth, the operations' improvements and their associated impact, the year-over-year FX impact that Lisa just walked through, our intended R&D investment and our repurchase assumptions. Given all the above, we expect pro forma EPS in the $3.05 to $3.25 range, reflecting a 9% to 16% earnings per share growth. And again, that assumes an adverse impact of between $0.22 and $0.24 based on current exchange rates. Obviously, if the markets are better than we anticipate or we take more share, we should be able to convert organic sales very well based on our improved fixed cost leverage. Our current view, though, is that we're working very hard to achieve that stated range. So with that, we're going to open the line for questions, operator.

[Operator Instructions] Your first question comes from Richard Eastman, Robert W. Baird. Richard C. Eastman: Larry, 2 things. Nice detailed guidance. For fiscal '13, how do you believe the systems versus consumables growth will shake out against that low-single to mid-single digit? Do we anticipate growth in the systems side of the business? Lawrence D. Kingsley: Systems will be flattish, Rich. And consumables will basically, and this, as you know, it's the lion's share of the business. It's 85% of the revenue. Basically, it's where we come up and tally the low- to mid-single digit growth assumption. And there's a number of things impacting the systems year-over-year piece. There's some that are down by design because we paired back less profitable systems opportunities. We talked a bit about that in the prepared remarks for Food, that's ongoing there. But that also, to a lesser degree, applies to other areas of the business. And as we walk through 2013 in the future quarter calls, we'll probably walk through some quarter comps in systems in particular that'll talk about negative growth. So you will anticipate that as we go in the first half in particular. Richard C. Eastman: And is some of the systems, again, are we continuing on this path of kind of calling out systems where we don't have the consumables opportunity? Is some of this self-inflicted or is this pretty much how the geographic demand shakes out for the year? Lawrence D. Kingsley: I wouldn't call it self-inflicted as much as self-determined. But yes, we're -- no, we're basically pairing somewhere all in about a point of growth out of the total company results as a function of getting out of systems opportunities that aren't profitable and that don't yield the consumables on a pull-through basis. Richard C. Eastman: Okay. And then just as a last follow-up here. The share repurchases that you're anticipating here for fiscal '13, is that still expected against the preapproved, the preauthorization that you had or maybe you could just talk a minute on the redeployment of the proceeds from the Blood sale? Lawrence D. Kingsley: The answer is yes to your first question. The assumptions that we have built in that support the EPS bridge and some of the capital allocation comments that Lisa made would be against the existing authorization. And that's more coincidental than anything else, but the plan right now is to keep most of the powder dry for acquisitions for the balance sheet [indiscernible].

Your next question comes from Hamzah Mazari, Crédit Suisse.

First question is just on your European exposure. Larry, maybe if you could drill down a bit and talk about where within Industrial you expect that business to get worse? And maybe just frame for us, excluding Middle East and Africa, how much is Europe and what are you baking in? Do you expect that business to decline throughout the balance of fiscal year '13? How should investors think about your European exposure? Lawrence D. Kingsley: Yes, sure. Well, you know the numbers as we present them from an all-in regional perspective, just under 40% is Europe. Not all of that is Eurozone to your point, but inclusive of the call to higher growth markets in Europe and the more mature markets, we add that, we sum that to get to -- in the neighborhood of kind of down low- to mid-single digit. In terms of vertical markets that are soon to be down, it's going to be within the process group, so within Industrial, in process. Even inclusive of Energy, the assumption is down and Food & Beverage to be down. M&E would also -- at this point, we expect that to be down in the Eurozone in particular. We're not anticipating huge growth even in the Middle East in our plan assumptions that, as you know, for us supports by way of our European region. And some of that's about where the transaction is because we do see continued revenue coming out of Asia, particularly Korea in support of big projects that ultimately end up in the Middle East. But I think our thinking is fairly prudent given the trend rates that we're seeing right now from an internal perspective and the macro headlines that we're all reading.

Great. And just a follow-up on capital allocation. You know maybe, Larry, if you could frame for us how much cash are you comfortable holding? I know you want to do acquisitions. And as well, how much leverage should this business have post-rightsizing the fixed cost base? Lawrence D. Kingsley: Well, if you come back to Lisa's comments about her $245 million pro forma kind of net cash post-transaction, certainly, we don't want to be net cash ever. And there's plenty of capability for us to acquire. We have a strategic plan, which would be a little bit premature to talk about. We're reviewing the final phase of that with our board in a couple of weeks. But it calls for significant acquisition opportunity over a 3-year planning horizon. As I said in my remarks, we've built our business development team. That group's in place now. We're building a proprietary transaction funnel. We're more actively engaging with the investment banking community, and we're tasking our senior team with cultivation responsibilities. So this will become a more acquisitive company, but it'll be certainly very strategic acquisitions and it'll be those that we can take advantage of principally the sales and applications expertise that's a pretty big component of our SG&A structure globally. To your structural question about what's ideal, think about high 20s net debt kind of numbers. And that gives us a lot of spend capability. But we're going to do it in a disciplined fashion, and you probably won't see consistent acquisition contribution from us as I think I said in the prepared remarks until early 2014 as it takes a while to ramp up that capability into -- to get sellers to the point of selling.

Your next question comes from Brian Drab, William Blair.

First question, just on R&D guidance. What do you mean here by $12 million to $15 million in R&D for 2013? Lawrence D. Kingsley: Within the EPS walk that we talked about, the assumption is for an incremental spend in '13 versus '12 of between $12 million and $15 million, and I hope it's closer to $15 million. And again the bigger impact that I hope we'll see as a function of that is not just the increase in spend but also a much more efficient deployment of our R&D investment. And on top of that, we're making some reasonably significant commitments to capital associated with new R&D preproduction capability.

Okay, great. I thought you did mean an increase there and that's helpful. Then on the revenue guidance, low- to mid-single digit is your expectation for organic revenue growth, clearly. And what -- you talked through the FX headwind. What is the FX headwind specifically on the top line? What's the rate?

About 2 points.

About 2 points, okay. And then in China, Larry mentioned about 1/3 of the business you expect to grow, I believe. Can you talk a little bit more about which businesses those are and what falls into the other 2/3? Lawrence D. Kingsley: Yes. What we don't see growing, let me start with that, is the primary metals end markets that we have served and seen some significant growth in. We do see some of the other process markets continuing to grow. We expect that BioPharm will grow and grow nicely. And we think that there's opportunity in a number of the other niche markets within Industrial. So it's a rough number to get to 1/3 of the verticals that grow substantially. When you do the math, as I said in the prepared remarks, you get to -- still get to double-digit organic growth assumptions for China and close to that for India. But that's with some assumptions about where China is going to spend money, and there is some infrastructure spend that needs to happen for that to be the case.

Okay. And if I could, just one last quick one. In the fourth quarter, did you see some of the benefits already of the new cost-cutting efforts? Lawrence D. Kingsley: Yes, we did. It's $0.02 or so, maybe as much as $0.03.

Your next question comes from Jon Groberg, Macquarie. Jonathan P. Groberg: Just a couple of clarifications that's unclear. What are the FX assumptions for '13 in terms of like rates, when did you set them in terms of your guidance, sort of what you're looking at with the euro having rallied quite a bit here?

I'll take that question. So our euro rates are a little bit conservative, a little bit dated. The euro against the pound, we have it at GBP 0.79 and the euro against the dollar at about USD 1.24 -- USD 1.25, I stand corrected. So yes. The other thing to keep in mind is that -- is our hedged rate, so we have hedged about half of our long euro versus the GBP at 0.79. Jonathan P. Groberg: Okay. That's helpful. And then when you talked about -- and going back to kind of the systems and you're pruning your portfolio, I may have missed this, I'm sorry. But if you think about -- what percent of sales for Life Sciences was systems and what percent of sales for Industrial was systems? I think you said overall, it was 16%. And as you talk about pruning, I'm just curious, you mentioned Food & Beverage. Are there other -- I think you also mentioned something about BioPharm. I'm just curious, where specifically are you looking at pruning the portfolio? Lawrence D. Kingsley: The top candidates for where systems, let's call it our less strategic force, i.e. they pull through less consumables, would be Food & Beverage and Water. So Food & Beverage, as you know, we report within Life Science and Water within Industrial. BioPharm is a very strategically critical business for us, and systems obviously breed quite a bit consumables opportunities for most of those applications, so we're not pruning any BioPharm systems. Jonathan P. Groberg: Okay. And as a percent of each -- of Life Sciences, what percent of sales? Just -- I'm sorry if you said it. But what percent of sales were systems in Life Sciences and Industrial? You called out 16% overall number. Lawrence D. Kingsley: It varies a lot by quarter. You shouldn't...

Well, overall systems in Life Sciences is about 8%. And for Industrial, it's 16% to 17% of total Industrial sales to blend to about 15% of total sales. Jonathan P. Groberg: Okay, that's helpful. At then one last one. If you think about '13 again, I'm just thinking about kind of what you're talking about of systems being flat. I think BioPharm, expect to drive growth, and if I'm remembering correctly, I think BioPharm is one of the more profitable businesses. If you just -- if you can -- if you just help us think of on your organic growth given the outlook that you have, what kind of incrementals would you expect in '13? Lawrence D. Kingsley: Specific to BioPharm or in total? Jonathan P. Groberg: In total. Just thinking about on your organic growth, do you expect -- given what you're doing, do you expect the incremental -- it seems to me like the mix of business should actually be more favorable than maybe in a more normalized environment. Lawrence D. Kingsley: Yes, I think that's a fair comment. The mix should be pretty good. The challenge with incremental assumptions on organic growth when it's lower single-digit organic growth versus higher single-digit organic growth is you know you have to first outpace the natural inflation factors. And so no matter what your P&L profile is and what your improved cost structure might be or better mix might be, the incrementals, the margin -- the incremental rate grows substantially once you clear that inherent inflation requirement or number that's part of the year-over-year bridge. So it does depend substantially on how much growth there is. On a lower organic kind of single-digit assumption basis, it's going to be 30% to 35% incrementals. And if we can do mid-single digit or better, it should be 40% or better.

The next question comes from Derik De Bruin, Bank of America Merrill Lynch.

It's actually Rafael in for Derik. He's marketing out in London. But just had a couple questions on 2013 guidance. I mean, just wanted to get a clarification on the 2013 outlook. If I were to annualize the company's Q4 EPS numbers, the 2013 guidance would appear to be on the conservative side. So can you help me understand that disconnect? Was it -- was there a larger restructuring charge taken in Q4 that then would otherwise -- than what we should assume for other quarters in 2013? Lawrence D. Kingsley: Rafael, you're trying to bridge something that doesn't frankly work. And so what we could probably do maybe in a separate call if you want is help you work you through the numbers and understand our Q4 for 2012. But in typical seasonality form, you can't really bridge the upcoming year to Q4. And there are a lot of moving pieces there that probably don't make sense to walk everybody on this call back through.

Okay. And on Aerospace, that was a bit stronger than we expected. So just wanted to get some additional color on what you think drove the outperformance and how you see this market unfolding in 2013. Lawrence D. Kingsley: Yes, sure. Military spares and Commercial spares, for that matter, were both strong, a little stronger than we anticipated in the quarter. However, we do see fairly robust opportunity in the Commercial side of the business moving forward. And we've talked about it a bit before, but the challenge for us is to improve our cost to serve so that we can take what is a slightly lower margin Commercial mix effectively to the bottom line. So good news is we're positioned well. We've got a good growth opportunity, but we do need to be mindful of the fact that it's going to be Commercial versus Military as we work forward.

Understood. And one last one, if I may. Just on Microelectronics. Larry, I think on your prepared remarks, you said that markets aren't unfolding as you previously thought. So just wanted to get some additional details on how -- what the outlook is there, whether it's stabilizing and what kind of trends you're seeing. Lawrence D. Kingsley: Yes. Well, you probably heard it from others that are frankly better predictors of what's going to happen in the semiconductor segment than we would be able to tell, to predict from an overall industry broader perspective. What's certainly going on there is that, as we all know, the only thing growing right now from a consumer products perspective is phones and tablets. And the assumption's that a number of the large -- both chip producers, as well as the capital equipment guys have modified in their view of the back half of the calendar year '12 and their view of calendar year '13 are such that it's kind of flattish performance. And you got some share gain shift going on among the chip producers. And so for folks like us, what's most important is to make sure that we're participating with those that are taking share in the segment versus losing. And there is an interesting dynamic in that regard. But the bottom line is that we still have a little bit of growth assumed, organic growth assumed for 2013. But it's a few points less than what we would have assumed at the end of Q3.

Your next question comes from Jon Wood, Jefferies.

I apologize if I missed this, but Lisa, did you give the cash flow guidance? And if not, would you do that?

I'd be happy to. So as we look into 2013, we see operating cash flow in the range of about $400 million to $440 million, and we see CapEx at plus or minus $130 million. So we see free cash flow coming in on the low end at about $275 million and on the high end at about $310 million. What's important to understand in these numbers, especially if you compare them to our fiscal year 2012 result, is that we have a number of perturbations in our cash flow numbers, first of which is some of the cash outflows that we'll see associated with the sale of the Blood business. So the taxes that we'll pay as it is and the way it's reflected in the cash flow statement will negatively impact our free cash flow, but the gain goes below the line. And then we have a number of, as we disclosed in our release, we have a number of IRS audit settlements that we're working on that we expect to be settling from a cash perspective in fiscal year '13. So we have in those numbers, if you will, $140 million to $160 million of unusual-type items that if you wanted to make a pro forma cash flow, you would add back.

And that's all on the tax side, Lisa?

It's mostly on the tax side, yes, related to beta, as well as settling some audits.

Okay. So what -- can you give us the -- what cash taxes you expect to pay in '13?

Well, most of the $160 million, I would say about $130 million of the $160 million relates to that.

Okay, great. On the top line, I don't know if you guys have rolled it up this way, but can you discuss net pricing contribution as built into your guidance? And also, is there a net benefit from acquisitions less divestitures incrementally in 2013? Lawrence D. Kingsley: So in reverse order, the benefit from a full versus stub year associated with acquisitions is a little less than a point, and pricing is similar, less than 1 point as well, say 85 to 90 bps.

Okay, great. And last one. What should we assume that you guys -- the pacing of the buyback for 2013? I guess another way to ask it is what's the share base assumption that's built into your FY '13 guidance? Lawrence D. Kingsley: Assumed ratable and...

About 4.5 million shares on a kind of sort of ratable basis.

Your next question comes from Tracy Marshbanks, First Analysis.

In the quarter, it sounded like you still had some Hypercare ERP implementation costs that may be going away or have already gone away. Can you quantify those, if so?

It was a couple of million dollars a quarter.

Okay. And on the same vein for the cost savings -- structural cost savings you're expecting in 2013, roughly how should we think about those flowing through sort of from the beginning of the year through the end? Where do you achieve the cost savings at? Lawrence D. Kingsley: Well, you're -- you'll start to see the improvement pretty significantly right here in the first quarter. It does ramp slowly versus the year in terms of impact. In terms of impact on a full year basis, you should assume roughly $0.30.

Yes. Okay, so you have a lot of it already locked in starting early in the year, though? Lawrence D. Kingsley: We're already well underway.

Okay. And pricing in the quarter, what -- you mentioned you had pricing in both segments. Was that -- what did that look like in the quarter just completed? Lawrence D. Kingsley: We actually didn't speak to it. But it was in the same order of magnitude that I just talked about as to what we expect for 2013.

And there are no further questions at this time. Are there any closing remarks? Lawrence D. Kingsley: Just a couple. Again, I'm pleased with our execution in the fourth quarter and most pleased because we were able to restore our customer confidence. Our team worked very hard to achieve this, and I'm very thankful to them for their efforts. We do have much to do that we can demonstrate on a continuous and consistent basis that we are industry-leading. And at that point, we'll be proud. But our team is working very hard to enable our strategy and to build the processes that I talked about upfront to deliver that consistent performance. And I think that we have taken all the action that's appropriate given how we're characterizing the environment to generate solid or at least reasonable results as we head into 2013. So thank you for joining us, and we'll look forward to talking to you through the course of the year.

This concludes today's Pall Corporation webcast. You may now disconnect your line.