Ladies and gentlemen, thank you for standing by, and welcome to Avery Dennison's earnings conference call for the fourth quarter and full year ended December 8, 2013. [Operator Instructions] This call is being recorded and will be available for replay from 12:00 p.m. Pacific time today through midnight Pacific time, February 4. To access the replay, please dial 1 (800) 633-8284 or for international callers, please dial (402) 977-9140. The conference ID number is 21676580. I would like to turn the conference over to Eric Leeds, Avery Dennison's Head of Investor Relations. Please go ahead, sir.

Thank you. Welcome, everyone. Today, we'll discuss our preliminary unaudited fourth quarter and full year 2013 results. Please note that unless otherwise indicated, today's discussion will be focused on our continuing operations. The company's Office and Consumer Products and Designed and Engineered Solutions businesses are classified on our income statement as discontinued operations. The company completed the sale of these businesses on July 1, 2013. The non-GAAP financial measures that we use are defined, qualified and reconciled with GAAP in the appendix of our Fourth Quarter and Full Year 2013 Financial Review and Analysis and on schedules A-2 to A-5 of the financial statements accompanying today's earnings release. We remind you that we'll make certain predictive statements that reflect our current views and estimates about our future performance and financial results. These forward-looking statements are made subject to the Safe Harbor statement included in today's earnings release On the call today are Dean Scarborough, Chairman, President and CEO; and Mitch Butier, Senior Vice President and CFO. I will now turn the call over to Dean.

Thanks, Eric, and good day, everyone. I am very pleased to report our sixth consecutive quarter of better than 30% growth in adjusted earnings per share, reflecting the successful execution of restructuring actions and other productivity initiatives, as well as better-than-expected sales growth in both of our core businesses. 2013 represented another year of excellent progress toward our strategic and long-term financial goals. We accomplished a major milestone with the sale of Office and Consumer Products and Designed and Engineered Solutions businesses. The midyear completion of this transaction has streamlined our portfolio and allowed us to focus on our 2 industry-leading core businesses to drive long-term sustainable growth and economic value. Both PSM and RBIS delivered strong financial results while continuing to invest to drive future growth and productivity improvement. Both businesses beat their sales growth targets for the year. As a result, we accelerated total organic sales growth by nearly a full point compared to the pace of the prior year, delivering results near the high end of our long-term target range of 3% to 5%. Within the Pressure-sensitive Materials segment, the Label and Packaging Materials business continued to benefit from the relative strength of emerging markets, as well as solid growth in North America and Europe, driven by innovation and share gain. The smaller divisions in Pressure-sensitive Materials grew faster than the segment average. Performance Tapes delivered exceptional growth in the fourth quarter due in part to the successful execution of the strategic partnership with 1 large customer while the Reflective Solutions business sustained double-digit organic growth throughout the year. Our investments in innovation are paying off, in terms of both new product sales, as well as material cost reduction. About 1/3 of our growth in 2013 came from innovation projects launched since 2011 and that exceeded our…

Thanks, Dean. As you can see, we had a strong year with adjusted earnings per share growth of 37%, reflecting the successful implementation of our restructuring program and solid growth in both Pressure-sensitive Materials and Retail Branding and Information Solutions. We achieved organic sales growth of 5%, adjusted earnings per share of $2.68 and free cash flow of $330 million for the year, all in line with our long-term targets and at the higher end of the guidance that we provided at the beginning of the year. In the fourth quarter, we delivered solid results with 6.6% organic sales growth and adjusted earnings per share of $0.69. As Dean mentioned, fourth quarter sales were well above expectations, particularly lower-margin products in Pressure-sensitive Materials. Adjusted operating margin in the quarter grew 110 basis points to 7.4% as the benefit of our productivity initiatives and continued solid top line growth in both segments more than offset the negative impact of product mix in PSM and higher employee-related expenses. As part of our restructuring program initiated in the first half of 2012, we realized $15 million of savings in the fourth quarter and $75 million in the full year. Restructuring costs, net of gains on asset sales, were about $3 million in the fourth quarter and $23 million for the full year. Full year free cash flow from continuing operations was $330 million, above the high end of our range, primarily due to the timing of both receipts and payments at year-end. The timing of receipts and to a lesser extent, payments, is relatively volatile around year-end due to the holidays. Based on past trends, we estimate approximately $30 million of cash flow withholds from the first weeks of 2014 into 2013. As expected, the net proceeds from the sale of OCP and…

[Operator Instructions] And our first question from the line of Scott Gaffner with Barclays.

Just looking at the restructuring expense. If you kind of backed out, in 2014, you talked about $45 million. Mitch, I think you mentioned net $23 million of spend in 2013. And as far as the $45 million, you mentioned RBIS and then some consolidation in the Graphics business. Why the acceleration in the restructuring spend, though, in 2014? Are you identifying more projects? Or any color you can provide around that would be great.

Scott, the decision around Graphics is something we hadn't communicated previously. And as we looked at the market there, we realized that we could get another step-function level of improvement by closing an existing factory and putting a new, more modern asset, an encoding line in the facility in Europe and basically, take out the fixed costs of that factory. So this is a new program but one we think will really accelerate our competitiveness in that business.

And as far as the comp versus 2013, the 2013 number includes gains on the sales of a number of assets, our headquarters and some other facilities. And if you exclude all those gains, we're actually in the low $40 million worth of spend in 2013 as well.

Okay. I guess if I look back to 2011, 2012, looks like you spent somewhere between $40 million and $50 million a year then as well on restructuring expense. Is that -- should we think of restructuring as being more of a normal item going forward? I mean, or was there a point in time where we think this could maybe drop off?

Yes. So a couple of things. If you look at the restructuring trends over time, it ramped up in 2012, kind of peaked. In '13, it started to trail off, with the exception of this action in Europe that we've been talking about. RBIS, we've said will continue to be restructuring for the next few years. We are far along but still have more footprint consolidation to do. And as we look at further expanding the margins by over a point every year, we -- I've been pretty consistent, I think, in saying that we should expect that for the next few years. As far as the normal level of restructuring, if you will, I think the $20 million, $25 million level for the next few years is the right number to use.

Okay. And then just lastly, I mean, I realize you're going to have an Analyst Day in May, and we'll probably get an updated thought around the operating margin for PSM at that point in time. But just looking at 2014, if we assume you go back to the long-term target, that's actually down operating margin for PSM. Is there a mix issue that -- in 2014 that would cause operating margins to come down slightly from the 2013 level?

Our -- Scott, our goal is to continue to improve margins. I mean, one of the objectives of the European restructuring is to improve our operating margins in PSM in Europe. So I think you'll hear -- you'll obviously hear a summary of that in the May meeting. But certainly, as you might guess, it would be really unusual for a corporation to set targets for businesses lower in the next year after you just completed a pretty good year. So it's just not our mentality.

Our next question from the line of Anthony Pettinari with Citigroup Global Markets.

Given that you've had close to 2 years of kind of fairly stable mid-single-digit organic growth and your -- your organic growth guidance for 2014 is maybe in a little bit of a tighter range than what you gave for 2013. Do you feel that your visibility into underlying demand has improved over the last year? Or do you feel maybe a little bit more confident about your end markets or -- I'm just wondering if you could compare your outlook for 2014 in terms of visibility into demand. Has that changed or improved versus maybe this time last year?

I think we feel more confident in sort of the overall economic situation, and we feel more confident about the strategies in our businesses around innovation, around taking market share. We feel good about things like RFID taking hold in the apparel retail industry. But I would say our visibility in the short term in terms of predicting quarter by quarter what's going to happen isn't any better now than it was before.

If you look at Q4, we were well over our expectations for the fourth quarter just because of visibility.

So the confidence is more in internal things that you can control within the company as opposed to maybe a brighter view on your customers or global macro or anything like that?

I think for us the -- especially on the long-term targets, we feel good about, let's say, packaging markets for PSM. They're consistent. We feel like emerging market growth is going to continue. We know the long-term trend for apparel, 2% to 3% growth every year, and it can be somewhat volatile. But we feel really good about the trend in RFID, and we feel good about our competitiveness and our ability to capture market share. So I think it's a combination of both.

And if you're comparing to last year the fact that our low-end guidance started with 1%, part of that is the macro, where there was more uncertainty a year ago as to what the macro environment would be. So it's very difficult to do that.

Okay, that's helpful. And maybe just following up on RFID. You referenced the 24% growth in '13. Do you have a target or a rough estimate for what you can accomplish in '14? And then you referenced large retailers entering trials, if not already using RFID. Are you finding that the speed of those trials are accelerating or shortening as the technology becomes more commonplace?

Yes. I think every retailer goes at their own pace, although the process is somewhat predictable. They start with some pilots in a few stores, and then they expand it to certain product lines. And then, eventually, we've got a couple of customers literally go wall to wall for all of their items. And we just attended the National Retail Federation show in New York a couple of weeks ago. And we -- there was a panel discussion about RFID, and there were major retailers there, as well as some industry pundits. And it was clear from the conversation that the ability to manage our inventory much more tightly is of enormous value to retailers, especially in an omni channel world because as retailers do more online selling, those retail stores are also acting as warehouses so that they can direct the consumer to come and pick it up or even ship it out from the store and not just from -- not from the warehouse. So it's -- what I see is it's picking up momentum, and the tide has really turned from -- RFID, if you're not onboard for RFID, you're really behind the curve, and that's, for me, a really positive move.

Great, that's helpful color. And in terms of the growth rate for '14, is that something that you can...

Again, it's tough to predict because retailers sometimes accelerate the delay in both -- the shorter the time period, the harder it is to predict. But I think 20% to 30% compound growth rate over the next few years is a decent forecast.

Our next question from the line of Ghansham Panjabi with Robert W. Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Just sort of staying with RBIS. Obviously, this most recent fourth quarter for apparel retailers in the U.S. was one of the worst in many years. What are your customers saying about the outlook as you kind of progress through 2014, particularly for 2Q, which is one of your strong quarters for that business?

Yes. We haven't seen major shifts. I think, Ghansham, and the challenges are different depending on the segment. I mean, the performance athletic channel did really well. Fast fashion did well. I think mass merchandise and the department store, kind of the fashion-type channels had a little bit more of a challenge. But I would say that we don't anticipate any major changes. I mean, we did see some slowdown in U.S. I think we -- our shipments were -- if you net out RFID, which is the right thing to do because we had some enormous headwinds there, we grew in the low-single digits from U.S. retailers. I don't really expect that to change going into the next season. But of course, the proof is in the pudding. We won't really have visibility on that until March. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then along the same vein, on RBIS for Europe, what's going on there?

We grew in the high-single digits. We have a number -- again, we believe we're taking market share there. But on top of that, there has been an acceleration of RFID implementations there with a number of different retailers, and that helped us quite a bit. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then maybe a question for Mitch on -- I'm sorry, go ahead.

It was high-single-digit growth from European-based retailers and brands. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Got you. And then, Mitch, just kind of looking at the cash on the balance sheet. If you look over the last few years, it's basically above 2x the average level over the last few years. A fair amount of healthy free cash flow being projected for 2014 as well. Can you, first off, reconcile the end of the year share count versus your guidance for 97 million average for the full year? What does that embed in terms of actual repurchase?

Well, if you just looked at average, the average of 97 million, it's about 3 million less than what we were the average for '11 -- I mean, for 2013. And it's a 2.5 million share dilution. And so basically comping that out, you're looking at 5 million and change [ph] of shares on average. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: And in terms of the -- just one final one. On the raw materials side, you mentioned some inflation. I assume that's along the emerging markets. What's the sort of environment also shaping up here in the U.S., as well as polypropylene has pushed higher and so on and so forth?

Yes. So we're experiencing pressures here in the U.S. as well, and then we're working to offset all that. But we are -- actually, the U.S. is one of the places where we are implementing some price increases and putting in a surcharge for propylene and freight and so forth.

Our next question from the line of John McNulty with Crédit Suisse. John P. McNulty - Crédit Suisse AG, Research Division: With regard to RFID and the RBIS business, in terms of incremental margins, can you differentiate the 2 so that we can kind of understand how to think about the earnings progression as RFID way outpaces the RBIS business?

It's definitely accretive. So I would say, currently, it's at or above the margin range that we're at, and so it's a good trend for us. John P. McNulty - Crédit Suisse AG, Research Division: I guess maybe looking at -- or cutting it a different way, I guess, if I think about $1 of incremental revenue in RFID versus $1 in the rest of your RBIS business, I mean, how should we think about what that incremental revenue brings to the bottom line?

Yes. So if you talk about dollars, dollars per unit are higher than the rest of our business. But if you look at the variable flow-through on percent, it is somewhat lower just because they're higher price point items. But if you look at just a fully absorbed EBIT margins, it is higher than the average of the rest of the business. And that does -- in the early days, we've got quite a bit of business development costs in that as well, but we're funding for future development of getting new retailers up and going. So we haven't quoted specifically flow-through per unit or anything else, and we're not going to comment on that. John P. McNulty - Crédit Suisse AG, Research Division: Okay, fair enough. And then just last question would be on the Pressure-sensitive business. Looking at kind of -- the revenue looked pretty solid, but actually the margins, on a sequential basis, didn't kind of improve the way I would have thought or the leverage didn't seem to kick in -- the operating leverage didn't seem to kick in as much as I would have guessed. What's driving that? Is it a seasonal issue? Is it a mix issue? I guess, how should we be thinking about that?

Well, generally, Q4 has lower margins than Q3. That's a typical trend for us. A number of factors. Graphics sales tend to be lower. Those are higher-margin products. People aren't wrapping cars or putting up graphics on buildings when it's in cold weather. So those tend to be a slower period. We did -- we would have expected higher flow-through, and we don't really have a complete understanding yet. I suspect that there was just higher growth in lower-margin categories than there were in higher-margin categories. We don't have the market data yet so that's a hypothesis. But we are continuing to take share, and we have lower share in lower-margin categories. The business is profitable, and we like the business. So part of it is just that as we grab some share. And we certainly had more volume than we expected. So we did have some extra expenses that we didn't anticipate in the quarter either. I mean, if you look at our guidance range versus what we actually performed, there was a bit of a surprise. So there was an extra cost in the business that -- because we weren't prepared for it, that I don't expect to repeat.

And the other thing I'd add is when I talked about some of the inflation that was currency induced with some of the currency movements that we had, it's a couple million dollars’ worth, it takes time to raise the prices and push that through as well. So that was an impact in the fourth quarter, too. John P. McNulty - Crédit Suisse AG, Research Division: Got it, okay. That's helpful. And actually, if I may, maybe 1 last question. Your 2013 margins in PSM, for the full year, are -- went above your 2015 targets. So I guess the question is, in terms of what drove that or how you got there, I mean, where, in your mind, were the surprises? Was it on the productivity or pricing or were volumes better? Like, when you kind of look back and kind of see your progression, what drove you to already exceed your 2015 target?

Well, I think good execution in the business. There's a number of factors here. We had better-than-expected sales growth in the year. We had good productivity during the year, and innovation was another key driver for us. I think I mentioned that we had almost 1/3 of our products that were new and improved. Some of that is lower-cost products. Some of that is just new-to-the-world products. And that's -- those are all a whole bunch of factors that were positive. So we will update our guidance ranges for the sectors in our May investor meeting. And I think we've got a good trend. We -- again, we did go above our target range. We're investing in restructuring in our European operations for our Graphics business, which will -- won't help us in 2014. It's actually a bit of a headwind, but it will certainly help us in 2015. And all of that will be reflected in our new targets for the next 3 years in May.

And I guess, just to add to that a little bit. When you say what surprised us, it actually didn't surprise us. Our goal -- when we set the targets for 9% to 10% for Pressure-sensitive, we were hovering around 9% when we said that. And we said, "This is the range where this is a good business, and we should focus more on driving profitable growth," but then our internal target was to get to the high end of the range. And so that was our expectation. That is what we've been doing. Whereas, with RBIS, when we set the range, it was just to get inside the range by over a full point of expansion every year. So I wouldn't call this a surprise, John.

Our next question from the line of George Staphos with Bank of America Merrill Lynch.

I guess I wanted to pick up on Pressure-sensitive maybe to start. Can you give us a bit more detail -- you mentioned you're adding a coater somewhere in Europe. You're going to be shutting down your facility, I think you said, in the Netherlands. Will this add capacity or is it purely a cost takeout? And you were mentioning, in response to John's question, I think before as well, that there's a cost headwind associated with this action. So can you quantify that headwind for us?

So George, yes. So we're replacing a 40-year-old asset in the facility. So I would say we're replacing it -- yes, there is a little bit of net add to capacity for the Graphics business, but we intend to grow that business. But we're replacing it with a modern asset that's a heck of a lot more efficient and productive than the one we're replacing and therefore -- that's why this investment has such a good payback. So I would say, as an investment in net -- Graphics coaters tend to run slower. They're not like the LPM coaters, et cetera, et cetera. It's a whole different product category.

So we shouldn't expect pricing pressure from the standpoint that you're adding a new coater, again recognizing that you're replacing capacity, older capacity with this newer coater?

Yes. I don't really expect it.

Okay. And on the headwind you were saying?

It's -- I don't know, it's, I would say, $0.02 or $0.03, something like that.

Okay, okay. Now on RBIS, the -- were you pleased with the operating leverage that you saw in the fourth quarter? From our calculations, although this is neither here nor there, you actually had a little bit more op leverage in incremental margin than we would have anticipated. So if you could provide your thoughts there. And what went well, what didn't go so well from a margin standpoint?

Yes. So we had a nice combination of stronger-than-expected volume growth against some pretty tough comps. We had better contribution margins. And with the footprint reduction that we've been executing, the productivity helped all at the same time. So I would say, again, we're happy but not satisfied. Actually, I think we could have squeezed that -- the team actually thinks they could have squeezed out a little bit more. So they're driven to hit their targets, but we were very pleased with the performance of RBIS in Q4.

I mean, is this an incremental margin that we can continue to see if you continue to put up this kind of volume given what you've already done with the cost structure and given what you plan to do additionally?

If you just do the math, right, so we have improved our operating leverage in the business by over 100 basis points the last 2 years. We need to do about the same pace to get to the 2015 targets by 2015. And so our internal objectives are set to do that. I think that one of the pacing items for us is, as you can imagine in a network business, where service is critical, we are -- you have to pace how you move this capacity around, how you take some of these fixed costs out. I think one of the things I'm really delighted about is even with all the footprint reduction actions we've taken in the business, our service, our quality, our safety have all improved at the same time. So that tells me that the team is operating very effectively to, in a way, reduce footprint and increase sales at the same time. It's not an easy thing to accomplish.

Sure. In terms of Pressure-sensitive, back to that, you -- I forget whether it was last year or 2 years ago, you talked about there being good EVA business to get after, particularly in Asia, to recall, even though it was perhaps lower-margin business, and maybe that's been one of the factors that's been driving. As we fast-forward to today, the margin -- or mix not being as buoyant you'd like. And if I heard you correctly, you now have some initiatives to improve mix. Do you feel that perhaps the strategy went too far in driving for the lower margin albeit higher EVA or positive EVA business or -- and that this is a turnaround from that strategy? Or how would you discuss it?

Yes. I wouldn't describe it as a turnaround. We had a 100-basis-point improvement in margins year-over-year in Q4, and we exceeded the top end of our range. So I think this is -- there is variation in any improvement path, okay? And I think this is kind of a really good job of adjusting to the environment being incredibly agile. So -- and again, we don't have that much forward visibility. So I feel good about our ability to manage mix and price and productivity over the long term. And I think there's -- it's rare when you can sort of plot a super-steady course the whole way. So I think the team is doing a great job. We've got more productivity planned, again, with the European restructuring. I think we are intending to continue to take share, to continue to innovate, and we had good performance in Tapes and Reflectives. And that should continue as well. So I feel good about what we did. So again, I think if you catch a little disappointment in our voice, it's like we had a really good quarter and it could have been even better. And I think that shows more ambition in our voice and intent to continue to drive the business forward and the margins up.

Totally understand. Last question and I'll turn it over. Can you quantify -- perhaps you did and I'd missed it, what the impact of these targeted price increases and surcharges are thus far in Pressure-sensitive, which you've announced to your customers?

No, we didn't quantify, but it's modest, George. It's a few million dollars in North America, and everywhere else it's -- we go to different levels of price increase depending on what's moving with the currencies. So for example, we did comment in 2013 that, in South America, we've been raising prices throughout the year effectively to offset some of the currency movements. So I'm not going to comment on that because it's really just looking to offset wherever the currency moves.

Our next question from the line of Rosemarie Morbelli with Gabelli & Company.

I was wondering -- I mean, if I heard properly, you did say that the game plan was to improve the mix in PSM. So if I understood properly, what do you think needs to be done? Is it a change in tactic, a change in marketing, going -- eliminating lower-margin product lines? Could you help me understand what you mean by that?

Rosemarie, I think it's more about tweaking our strategy. And there's nothing I would say major here. It's again driving more innovation, a little bit of cost out here. This is -- our overall strategy is the same, and that's to continue to grow our business through innovation, through -- and a lot of the innovation helps us take market share, continuing to execute well in emerging markets. We had a great quarter in emerging markets. And so I don't think there's anything major here. It's just a matter of keep focusing on driving the business forward.

Okay. So it is not a question of eliminating some product lines that have lower margins inherently?

No. Our mentality is, "Let's figure out a way to either innovate in those product categories where we might need a little help or to get more productive."

Okay, that is helpful. And one other question is regarding RBIS. Once adopted by a retailer, have you ever seen a case where money is running short and they canceled the program? Or once they adopt it, they mostly either stay where they are or go forward with more of it?

I'd say, generally, most retailers continue to expand it. And we had one major retailer who's moved -- or 2 -- a couple of major retailers that have moved to mark everything in the store because once you get 60% to 70%, it just makes sense to convert. We did have a retailer last year who scaled back some of their ambitions. They didn't cancel the program, but I think that was more about their overall market position and strategy than it was related to RFID.

Okay. And if I may, and I'm sure others know that, but why is the big range in the EPS guidance between 8% to 19%? Where does the major uncertainty come from, retailers or something else?

I think it's a reflection of our inability to really get a good forward look, and it's actually narrower this year than it has been the last couple of years. We just don't have any -- we don't have much forward visibility in our business. We don't have backlogs. We ship out a huge percentage of our orders in just a few days, and it's just kind of a reality for us. And so one thing I will tell you, and that is from an internal objective point of view, we target the high end of the range.

Okay. And what do you need to get there? Do you need help -- outside help from the economy, from any particular area?

We need a continuation of the current -- the economic environment we saw in '13 and continued execution both top line, as well as the productivity initiatives we've laid out.

Our next question from the line of Jeff Zekauskas with JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: It's Silke Kueck for Jeff. A couple of questions. So it looks like your depreciation and amortization expenses went down by $60 million this year. That's sort of like a diamond benefit to your earnings, I guess. Is that sustainable or do you expect your D&A charges to continue to move lower as you close down facilities?

Yes. We -- you'd expect it to continue to -- I mean, if you look at the longer-term trend, it has been going down. Our CapEx for a number of years has been below our level of depreciation expense. A big part of that was just, when we moved OCP to disc ops, we had some depreciation expense in Q1 of last year and then all of DES as well. So it's a bigger reduction than you normally would see. And as we -- and as CapEx and depreciation start to converge, which they are getting close to doing, so you'd expect it to start to plateau a little bit. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay, that's helpful. And...

So one thing to point out, sorry, is also -- in talking about investments in the business, we have said the amortization on the acquisition intangibles in RBIS start to drop off in '16 and '17. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: And what's the magnitude of that?

It's about $20 million. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: A year?

Yes. So the $20 million is total amortization expense. About half of that drops off in '16 and '17. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. Secondly, the raw material prices you are seeing on the propylene side, do you think those are more seasonal in nature? Like, it seems that propylene prices move up every year sort of at the end of the year and early into the year, and then they come down in the spring.

Yes. The spike, I think, happened a couple of months earlier than we had seen in the past, and I know you're very close to this, but it seemed to come a little bit earlier. So we're putting it through as a surcharge, and if it comes back down, then the surcharge will come up. That's one of the reasons we're using the mechanism of the surcharge. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. So like, the surcharge is always, like, temporary? It's only like a quarter or so rather than being annualized?

They're tied to -- if we do a surcharge, they're tied to something specific, whether it be freight costs or whether it be propylene and so forth, and one of the surcharges is tied to propylene. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. And last, I was wondering what the size of the RFID business is now. I guess it contributed like another $8 million or so to sales this year, which is very nice. And I was wondering, like, what the size of the -- the absolute size of the business is by now.

It's around $100 million, a little over.

Our next question from the line of Chris Kapsch with Topeka Capital Markets.

Follow-up questions on the Pressure-sensitive division in particular. When you reported third quarter, there were some hints of softness late in the quarter, I think in September and then early into the fourth quarter, first couple of, few weeks into October. So given the strength of the Pressure-sensitive segment in -- overall, in the fourth quarter, which is this, I guess, 7%, 8% organic growth, I'm just curious what the sequential trends look like throughout the quarter. And if you could provide that sort of by region. Like, where did you see the more pronounced strengthening during the course of the quarter? And what's that sequential trend look like thus far into the first quarter?

Yes. So I think when we spoke last time, we said it's a temp -- the trend was going down, particularly in September and October, as was consistent with the guidance we provided, which we wouldn't imply it was starting to come back. And it did come back, and November had the best month of year-over-year comps. It was pretty strong in most of the regions actually. And Europe came back stronger than -- as I've quoted, they were in high-single digits overall for the quarter. So Europe was particularly strong throughout the quarter but really ramped up. And November and December trailed off a little bit from a year-over-year standpoint, but strong, I'd say, pretty consistently throughout the quarter.

And can you talk about thus far into -- trends into January?

January is our lowest sales month. And so it's not really indicative, and we actually look to February to see -- get a decent read. So we're not going to comment on where it's coming out. I'd say, overall, it's consistent with our guidance expectations for the year, but it's not a good barometer.

Okay. And then if I'm just looking, I guess, on Page 10 of your -- the review presentation, just a couple of questions on that. So your outlook for 2014 free cash flow, calling it, $300 million-plus. I'm just curious, like, given the extra pension payments that you made in 2013 and considering higher discount rates, I'm just wondering how much, if any, pension contributions does that free cash flow guidance contemplate in '14?

So the free cash flow in 2013 excludes the supplemental pension plan contribution. Is that your question, Chris?

I'm just wondering if the '14 guidance contemplates any incremental pension payment?

Well, the guidance has a -- the guidance, really, is just a floor. So we're saying it can be more than that. So it's going to be at least $25 million of pension contributions in 2014. That's what we're required to do. But we haven't locked down exactly what we're going to contribute. The factor there is the floor. I think the bigger factor for as you look at 2014 for free cash flow, bigger than pensions, is just the $30 million I commented on that seemed to move out of the first weeks of '14 into '13, as well as the impact of the 53rd week.

And then, in this net debt to adjusted EBITDA metric, you don't incorporate underfunded pension obligation in net debt here, right?

No, we do not. This we use as a proxy just to -- for how we really look at it, which is full leverage, which is including the pension obligation. So this is kind of a shorthand for how we look at it, where -- if you look at total leverage. And our pension obligations -- our underfunded pension obligation is below -- across all the geographies is less than $300 million now, where it was north of $400 million last year.

Right, right. Okay. So then considering this target of 1.7 to 2 on that shorthand version of your leverage metric and although you say, on average, it was 1.5 in '13, it looks -- it just looks like you're around 1.0, roughly 1x at the year-end 2013. So considering where the EBITDA is likely to be, considering the free cash flow, it looks like you have substantial capacity for incremental buybacks. And then I don't know if this target is sort of a year-end 2015, but if it's a year-end target for 2015, you get the benefit from another year of free cash flow in 2015, which would suggest potential of over $1 billion in capacity for buybacks. I'm just wondering when would you, I guess in conjunction with the Board, decide to take action on pursuing just a more appropriate leverage ratio using buybacks to get there.

Yes. So a couple of comments. This isn't a year-end target. It's actually averaged throughout the year, and Q4 is always the lowest point on the leverage. I think you're right to call it, the 1.5 is a little bit higher than if you normalized our average for 2013 because, the first 2 quarters, we didn't have the proceeds in. So it could be somewhere between the 1 and the 1.5 overall, if you would adjust for that, which would imply, as I mentioned, some good amount of balance sheet capacity. And we do have additional free cash flow in 2014 after the dividend of a couple hundred million. So we recognize that, and I think the key thing here is we've said that we're going to continue to be disciplined as we deploy cash to shareholders and -- through increasing dividends, as well as through share buybacks. And if you look at last year, we did deploy almost $400 million, which was more than our free cash flow from the business, and we will continue to follow the same approach we have been.

Okay, fair enough. And then just one final one. Just on, I guess, the investor day that you're planning for May, did you say you're going to update these 2015 targets or more likely extend the targets beyond where you put the current metrics are for 2015? In other words...

We'll extend the targets probably another 3 years because if we update the 2015 targets, we'll essentially be giving guidance for 2015. And we're not going to do that in May of 2014. So these will be longer-term objectives for the company.

And with that, we'll proceed with our last question from the line of George Staphos.

Two last questions. I'll ask them in sequence, piggybacking on Chris' last line of questioning. Over time, could you remind us, where do you think the dividend -- how should it proceed? What kind of pace should it grow at relative to your earnings or if you look at it more from a cash flow standpoint? And then in capital allocation overall, I noticed that capital spend in your guidance doesn't really move all that much versus 2013 despite the fact that you are adding a coater. How are you -- what are the offsets there relative to the investments that you're making in the coater? And do you expect EVA per share this year to actually move up more or less in line with your earnings guidance?

Thanks, George. So on the first question about capital allocation, dividend versus share buyback, this is something the Board obviously spends quite a bit of time on. And we're going to make our dividend decision every year at the end of the first quarter, so in coincidence with our annual meeting. That's how the Board wants to deal with that. And I think both are important, and it's something we look at. On the second question, actually, we're installing more than 1 coater next year. We typically, especially in emerging markets, are adding a coater or sometimes 2 per year. So that's -- it's not a huge increase -- obviously, we're increasing capacity mainly in emerging markets because we need it for the volume growth. And the one in Europe is really more about -- it's really more about upgrading our capability and efficiency and driving more productivity. So I think on the sort of overall offsets, we -- our spending on IT has been up the last couple of years. We've been putting in a new financial system. We've had -- we're in the midst of building a new headquarters building for our materials business in Europe. So that's a little bit of, I'd say, a onetime thing. We don't do that every year. So there's some puts and takes. I will say that if RFID accelerates next year or we see substantial volume increases, we may have to spend a little more in capital spending, and it would be a delight to do so. It's a high-class problem path. Mitch, did you have any comments?

No. I think, overall, it's just that, every year, we're making investments in different places, and there's not, I'd say, one general theme to the pull, to what's funding these increases. The overall investments, if you look at it relative to '13 to '14, there's increases in Asia. There's increases for the graphics coaters in Europe and modest increased investment in Tapes and the RFID business, so they're both growing.

So if that's normally the case, then EVA per share should grow at least in tandem with earnings overall would be the conclusion?

Our goal is to continue to expand returns, yes, exactly.

Mr. Scarborough, back to you, sir, for your closing remarks.

Thanks, Fran. I'm very pleased with the excellent progress we've made over the past 2 years against our long-term strategic and financial goals. Innovation will continue to be a hallmark for our businesses, further strengthening our industry-leading positions in all of our key markets. Our value-creation formula remains straightforward. Modest top line growth, ongoing productivity improvements and highly disciplined capital management will continue to drive double-digit earnings growth and solid free cash flow, most of which we'll give back to shareholders. I would like to thank the Avery Dennison team members for delivering another solid year. I look forward to working with you to achieve our targets for 2014. Thanks for joining us today, and I look forward to speaking with you again soon.

Ladies and gentlemen, this does conclude the conference call for today. We thank you, all, for your participation. Have a great weekend, everyone.