Good morning, and welcome to Brunswick Corporation's 2014 Third Quarter Earnings Conference Call. [Operator Instructions] Today's meeting will be recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Bruce Byots, Vice President, Corporate and Investor Relations.

Good morning, and thank you for joining us. On the call this morning is Dusty McCoy, Brunswick's Chairman and CEO; and Bill Metzger, CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call, our comments will include certain forward-looking statements about future results. Please keep in mind that our actual results could differ materially from these expectations. For the details on the factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at brunswick.com. During our presentation, we are using certain non-GAAP financial information. Reconciliations of GAAP to non-GAAP financial measures are provided in this presentation as well as in the supplemental information sections of the consolidated financial statements accompanying today's results. I would like to also remind you that the figures in this presentation reflect continuing operations only, unless otherwise noted. On July 17 of this year, the company announced the signing of an agreement to sell its Retail Bowling business and its intention to sell its Bowling Products business. On September 18, the sale of the Retail Bowling business was completed. Starting with the third quarter of 2014, the historical and future results of these businesses are now reported as discontinued operations and the historical and future results of the Billiards business, which remains with the company, are now reflected in the company's Fitness segment. Therefore, for all periods in this presentation, all figures and outlook statements incorporate these changes and reflect continuing operations only. I would now like to turn the call over to Dusty.

Thank you, Bruce. Good morning, everyone, and we'll start with an overview of our third quarter results. Revenue in the quarter increased 13%. We experienced double-digit growth in outboard, boats and engines, marine parts and accessories, fiberglass sterndrive inboard boats and fitness equipment, which is partially offset by a decline in sterndrive engines. Our gross margin has increased by 20 basis points compared to the prior year. Operating expenses increased by 1% as we continue to invest in numerous strategic initiatives at increasing levels. Adjusted operating earnings increased by 45% versus the prior year. Net interest expense was reduced by $1.2 million. As a result, adjusted pretax earnings increased by 56%, while diluted EPS, as adjusted, increased by $0.05 to $0.63, reflecting a higher 2014 effective tax rate. All 3 of our segments reported double-digit top line growth in the quarter. Sales in our combined Marine segments increased by 14%, while our Fitness segment increased by 11%. From a geographic perspective, consolidated U.S. sales increased by 15%. Sales to Europe increased by 19% due to growth in Marine sales. If we exclude the impact of the Whale acquisition, sales to Europe increased by 13%. Rest of World sales increased by 6% versus the prior year period due to gains in Fitness. In summary then, combined sales outside the U.S. increased by 10%. In the 9 months, the Fitness and Boat segments reported top line improvements of 7% and 6%, respectively. Record year-to-date sales were up 4%. These year-to-date growth rates are now at or approaching our full year guidance targets. From a geographic perspective, consolidated U.S. sales increased by 6%. Sales to Europe increased by 10% due to growth in Marine sales. Rest of World sales declined by 1% versus the prior year period due to weakness in Marine markets,…

Thanks, Dusty. I'll start with the Marine Engine segment where sales were up 11% in the quarter. From a geographic perspective, sales in the U.S. were up 9%, reflecting an increase in outboard engines and parts and accessories, which was partially offset by the impact of lower sterndrive inboard engine revenues. Sales to Mercury's European customers increased by approximately $17 million or 35% as growth was experienced in outboard engines and parts and accessories. Growth in parts and accessories benefited from the recent Whale acquisition and growth initiatives, while stronger outboard performance included benefits from new products, improved conditions in the Nordic region and sales timing. For the 9 months, sales to Europe were up 10%. Rest of the World sales increased by 2%, and these regions benefited from gains in outboard engines as well as parts and accessories, while sterndrive inboard engine revenues were down compared to the prior year. Latin America was the only major region to experience declines in overall sales. On a product category basis, the outboard engine business reported solid overall sales growth in the third quarter of 2014, which included Mercury's new 75-, 90- and 115-horsepower FourStrokes. These new engines, which are built with the same architecture as the popular 150-horsepower FourStroke, have also been well received by OEMs and consumers. Our outlook for the outboard engine business continues to reflect favorable retail demand in most markets in both categories. On the sterndrive side, Mercury's award-winning and recently launched 4.5-liter 250-horsepower purpose-built engine is receiving very positive feedback from OEMs. Sterndrive engine sales, however, continue to be affected by unfavorable global retail demand trends, while diesel engine sales were up slightly year-to-date. Mercury parts and accessories businesses delivered strong sales growth during the quarter with gains in most major markets except Latin America. Revenue…

Thanks, Bill. Our operating plans and assumptions for full year remain fairly consistent with those we've been communicating throughout the year after adjusting for the bowling divestitures. We continue to target 2014 to be another year of strong earnings growth with outstanding cash flow generation. Our plan reflects approximately 6% sales growth, which includes benefit from the success of our new products and continuation of the growth illustrated in U.S. thus far in 2014 as well as a mixed performance in the international market. We continue to anticipate a solid improvement in gross margin levels. As a result of ongoing growth investments, full year operating expenses, adjusted for the divestitures, will increase but, as a percentage of sales, are expected to be lower than 2013 levels approximately 17.6%. As a result, our pretax earnings should continue to demonstrate strong growth of 28% to 31%. On our last earnings call, we established our 2014 EPS, as adjusted, guidance of $2.25 to $2.35. Today, we're updating our guidance to a range of $2.30 to $2.35. The full year financial targets for our 3 operating segments remain largely unchanged. Our overall plan reflects continued revenue and operating earnings growth in our Marine Engine segment. Specifically, we're planning for a full year revenue growth in the mid-single-digit range with a solid improvement in operating margins. We will continue to make significant investments in Mercury. Looking at our Boat segment. Our plan assumes that we continue to successfully execute our large fiberglass boat strategy, which will help to generate growth in the fourth quarter and is a key part of an increasing number of new products that will be shift into the market. As a result, we should continue to see the benefit from a more favorable sales mix, leading to higher average sell prices.…

[Operator Instructions] The first question comes from James Hardiman from Longbow Research.

It looks like things are really playing out the way you guys suggested that they would. Some nice acceleration here in the back half or at least in the third quarter of '15. It seems like the fourth quarter is probably going to look pretty similar. I guess, my question is, as we look to 2015, can you maybe talk about how that year is shaping up? It seems at least in the first half, you're going to benefit from a lot of the things that are driving this double-digit-type top line growth here in the second half of '14. So maybe in the context of your mid- to high single-digit longer-term targets, how should we think about 2015 just given all the dry powder you guys have with respect to new products?

First, James, thanks for the compliment. And the folks talking to you here are very little to deal with it because all our people are out in the field, and we always want to make sure that we and everybody who works for this recognizes that. In terms of 2015, a fair question with the big acceleration that we've seen here in the second half, as I look at '15, I think we'll see continued revenue growth within the range that we had given for the 2014 through 2016 time period that we laid out in November last year up in New York. So that's 5% to 7%. As we -- and I think the next thing we probably have to focus on is leverage. We -- and again, my judgment is today that we'll see leverage in the 20% to 25% range. We had said last November that we thought this year would be on the high end or a little above that range. But that as we look over the 3-year period, we would be within that range, and I think that will prove to be true in 2015. So as we sit here today, that's how I'm looking at 2015 in how it ought to shape up.

Okay. Fair enough. And then to the leverage point, in the third quarter, engine business leverage looks great, north of 30% by my math. Can you sort of help us understand what's driving that? I think you spoke to a favorable warranty expense, maybe quantify that? And then the Boat business south of 20%, that doesn't look nearly as good. I know you had some integration and product ramp-up going on there. How significant was that? When does that roll off? How should we think about sort of normalized rates at least in the fourth quarter?

James, I'll take that. This is Bill. On the Mercury side, volume was obviously a very key factor for Mercury as well as the new outboard engine product that was introduced. That got a favorable margin impact as well. So for Mercury, there were a handful of items along with warranty that were very favorable for them in the quarter, which is why the leverage was so high. On the Boat side, the integration cost and the production ramp-up related to stuff is really probably the biggest headwind that they faced, but you also have to remember that the growth in dollars between our larger fiberglass product and the rest of the portfolio was pretty balanced. So the leverage that they produced for the quarter isn't necessarily outside the boundaries of what you would expect when you've got balance between those 2 things.

Okay. That's very helpful. And then, Dusty, maybe just last question here on the capital strategy. Maybe walk us through your change in philosophy here in the last couple of years in terms of finally announcing this buyback. And then other potential uses of cash, it seems $200 million is only a portion of the cash you're going to have available to you guys over the next couple of years. Maybe talk about the pension, sort of what's the payback on paying down, I don't know, every $50 million of that liability in terms of the pension expense. And then how are you guys thinking about returns in terms of some of the acquisitions that you're making, should they be similar to what we've seen with Whale and Bell?

I'll start off and then let Bill address the pension. Yes, I had been pretty public, it would be over my dead body that we would do a share repurchase program, and I haven't been murdered and I'm still here. And our share repurchase reflects 2 or 3 things that I think are really important to those of you who cover us and our shareholders. We have gotten progressively stronger now quarter-by-quarter since the recession started in 2008. And my personal position on the share repurchase program was frankly to keep the wolves away from the door, looking for a share repurchase program, to give us time to really get our growth initiatives solidified in the company, get the spending ramped up that we need to do in order to drive the growth initiatives and to begin to see the benefit of all that, and we knew it would cost us a lot of money. We knew it require internal change. And if you look back, and I'm sure you have been, for -- on a trailing 4-quarter basis during the second quarter of this year, we didn't report much income gain. And we did a good job of generating cash, but we knew that we had to get through this time period, and we knew as early as 2009, 2010, that these days will come when we had to make big investments and then that again result from the investment. So all that is playing out really well, frankly in accordance with our plans. And I couldn't be more proud of our folks who started from product development all the way to the sales force. Then as we look forward for where we can take the company -- and I've laughingly said our goal now is to become boring.…

Yes. James, on the pension side, our funding strategy, it's still pretty consistent. We're -- of the $75 million we're putting in this year, about $50 million of it is what we're required to put in under a risk and so we continue to have an annual funding obligation that we need to fund. The incremental $25 million is related to this lump sum buyout strategy, which allows us to take care of these liabilities at an attractive rate before they have the ability to kind of grow over time. And we feel that the returns on that stack up pretty well against other things in our list of kind of capital structure opportunity, share repurchases, acquisitions, et cetera, by kind of retiring debt at a discount to what we think the ultimate cost is going to be for the company. And every dollar that we put in, you have to remember that we get a tax deduction and we get to earn money at kind of a tax sheltered rate, which really helps the returns especially when you compare it to just holding cash, where it's really tough to make any sort of return on cash investments in this environment. And then on the acquisition side, we're certainly focused there on trying to get returns that are well above what our weighted average cost of capital is. I would kind of peg that at mid- to high teens with the synergies contributing something to get you to the high teens. Possibly into the low 20s is what the targets would be. So that's the way we're looking at those 2 different uses of capital.

And then, James, to come back into the sort of what I view as the overarching part of your question, and that is, okay, you're doing a $200 million share repurchase. You said you want to have $300 million to $400 million when we say, "Stay at the high side of that cash on hand at the year-end to help us through any downturns that may come. And then it's easy to provided the math and say, "Well, there's still additional cash." And what I'll say today is that is -- this is the fact that we're not tagging that for anything else ought to be an indication that we think we've got lots of growth potential going forward. We're looking at not only growth in our businesses that we operate today in the way we operate them, but we're working very hard on growth adjacencies, and we want to make sure that we've got the powder to go do those when we want them on our terms, on the timing that we want to do them. And while we're not afraid to go to that market for a great adjacency, move either organically or through acquisitions, our view is right now, we're going to be able to do many things with the available cash that we're going to have and still have lots of borrowing capacity for the rainy days or the big one that may come along. So we're pretty excited in -- the world is -- our company is moving to where we had hoped we would beginning in 2009, and it's playing out nicely, and we're really focused on growth, and we're pretty excited about what the opportunities are going to be.

Our next question comes from Mike Swartz from SunTrust.

Just wanted to touch base on boat ASPs for the quarter. It looks like, just doing the math, they were up kind of 15%, and I think they were kind of up mid-single-digit last quarter. I guess, 2 questions. One, how did Sea Ray contribute to that ASP mix number this quarter? And is that the type of growth that we should expect over the next 2, 3, 4 quarters?

Certainly expect it for the remainder of the year on a quarter-over-quarter basis. And then as we look at our production and in retail-wholesale mix, it's a little harder in '15. We can begin to scope that, but I think it will be up in '15 versus '14. But that's the percentage that you're seeing right now ought to be good through the remainder of this year. The big driver of that has been in fiberglass boats, and for us, that's Sea Ray, Meridian, Bayliner, but -- and never forget Boston Whaler also and all that we're doing in that brand. So Sea Ray is the largest piece of that. Sea Ray would be the bigger -- biggest driver of it, but it's happening also in our other brands. And not just that, because I really don't want to minimize the work that's being done in our aluminum boat businesses, be it share, new product -- it's also beginning to show up in AUP quite nicely here in this quarter, and I think it will continue also.

And then just touching on -- I know currency has been a headwind for a number of folks with international operations. Could you just talk about, maybe this is for Bill, just the incremental change in FX from when you gave guidance in July to where we stand today and then maybe how you think about that in 2015?

Maybe modestly unfavorable to where we gave guidance in July but nothing that created significant headwinds for us in the quarter. And then as we look into the fourth quarter this year, the headwinds get to be a little bit stronger.

Okay. And then any commentary on '15 with where we stand today?

I would say, it's going to be a headwind, hard to quantify as I sit here today. There's just too much can happen between now and when we get into there. And you got to remember, too, Michael, that we, from an earnings perspective, do quite a bit of hedging out on a forward 12-month basis, which minimizes our variability quite a bit as we go forward.

And I would assume some of the local manufacturing in Europe also helps to create that natural hedge?

And there's a fair amount of our international sales, Michael, that get done in dollars, and the market pricing happens in dollars, and it doesn't have that same sort of currency risk that some of our other businesses does.

The next question comes from Jimmy Baker from B. Riley & Co.

Nice execution here during the ramp-up.

Thanks, Jimmy.

So just a follow-up here on the Boat group. So there you're really benefiting from higher wholesale shipments of sterndrive and inboard and then some of those higher-priced fiberglass products. And yet despite the industry being down in that category, your dealer pipeline inventory is actually down in that category. So I know you don't break out your retail performance by boat category, but it's pretty obvious you're gaining a nice chunk of share there on the higher-priced category. So can you help us kind of quantify or order of magnitude how you're thinking about the opportunity for share gains through the 2015 selling season? And then I guess the follow-on to that is, is the sterndrive inboard pipeline declining intentionally at this point? Or if you were able to keep up with demand, would you prefer for that to be more flattish going forward?

Let me do the last part, first. It is declining intentionally, and as we see a lot of the new products, the high-priced product, our goal is to work with the dealer network so that their borrowings, et cetera, to keep product on the showroom floor as low as possible. So we're working with the dealer network to try to retail as many -- as much product as possible without having to do stocking. And so that's the big step, and it's working well. And then we have just the practical side of this thing. We got a lot of big products that's -- frankly, demand at retail is so big that we were not going to be able to feel they need to stock anyway for a while. Then for those segments that continue to be in decline, it's important to us that we work with the dealer network to keep them stocked appropriately for what the market looks like and where we think it's going. So the whole fiberglass stocking issue is being done, number one, to help the dealers; number two, with an eye on the market; and number three, frankly, we're being forced there a bit by just real extreme retail demand.

Yes. And I think the only thing I'd add to that, Dusty, is that the decline in year-over-year is more about the actions that we took in the first half of the year versus the activity in the quarter which was pretty balanced.

Good point.

That's helpful. And then just any commentary about opportunity for share gains into 2015 on the -- and some of the higher ASP categories. And maybe if you could just talk a little bit about how your Boat group order book stands today in those categories versus your expectations? Or maybe in terms of weeks to fill or change of year-over-year?

Well, I think just a real, real simple arithmetic as we do it Jimmy says, we will be gaining share in the longer-term categories of fiberglass, and that would be both in outboard and inboard. We've talked about this a lot, we've been long time a company making boats over 50 feet, and now we've got a great product lineup there, and they'll just be beginning to get into the retail world, and I think just -- we're going to good share gain here. As we look at our Boston Whaler brand, we've had a lot of nice, larger product coming, and we've got more in Fort Lauderdale Boat Show next week. It will be a great showplace for some product there. So I think, again, we'll continue to take share there. We will, in my judgment, continue to take share in pontoons. Maybe continue is a bad word. We ought to be able to get more share for pontoons in 2015 than we've been able to get in 2014 as we ramped up our new plant. And I think we have a lot more production capability through working with our suppliers, et cetera, than we had before. So I think our guys are doing a good job on share. The third quarter was a nice share quarter for us, but we needed it. The reason we needed it is because we haven't had enough new products coming. So now it's all coming, and we're going to see the benefit from it.

It's very helpful. And just lastly on the engine side of Mercury. When we're out talking to dealers, we've been hearing that they're starting to see some real additional success with the repowering promotions. Could you just maybe talk a little bit about how those margins compared to your engine sales to OEMs? And maybe what your market share is of the repower market versus your share with the OEMs?

Repower has been a focus, and the Mercury team is doing a great job at it. Margins on repower would be comparable to margins throughout the business. I won't pick just OEMs. I'll just pick throughout the business. As we look at Mercury, our share opportunities are in repower, saltwater, commercial and in some international locations. And the Mercury folks, as they always do, when they get focused on something, they make things happen. And they've begun to really get focused in those areas and I think we'll continue to see shares growing in all those areas.

The next question comes from Greg Badishkanian from Citi Research.

Two questions. First is Canada and the U.S. had colder and leaner winters and springs this year. So I'm just wondering, are those lost sales? Or do you think those -- some of that might be pent up for 2015?

Well, certainly, they are lost today. So any that we didn't get made up, are gone. And my judgment is as follows. In the U.S., it's played out almost exactly as we thought it would. In our prepared comments, we said on year-to-date the market is up about 4.5% on trailing 12 months. It's up 4.7%. And overall, Greg, that's generally right where we thought it would be. So I don't know whether it's all been made up, but it's right where we thought it would be. Canada, a different issue. It was a longer, colder weather, and then when we throw on currency change there and the fact that it froze -- a bad word -- caused people to stop and think before they bought boats, we clearly did not get that made up there. So my hope is that's pent-up demand that we can uncork in '15.

Yes. Yes. Okay, that's helpful. And then generally speaking, dealer inventory levels, how would you -- how do you think that is looking right now? And not just your inventories but also your competitors this year maybe versus last year and just kind of how it's developed throughout the year?

Good question. I think the industry is doing a magnificent job of managing the inventory levels. We're in the floorplanning business for our brands. Just naturally as you do that, you get to see what the competing dealers and even some in of our own dealers who aren't exclusive, we get to see what levels are in those dealerships, and they're being really well-managed, and they're very healthy. And people are doing a good job on a total basis of keeping retail and wholesale well in line. It's just great.

The next question comes from Tim Conder from Wells Fargo.

A couple of questions, sir, here. You talked a little bit in one of the previous responses about Mercury outlook here broadly inclusive of the OEM area. Would you expect to also gain share in OEMs looking into '15? And again, I know there has been some new competition with product moving into that OEM area. Do you feel any major pressure from that at this point?

I'll always feel pressure. We've got great competitors in our engine business, and that's what makes the whole engine segment in the entire marine business a really great segment. Great competitors make for a great segment. My judgment today is, yes, we will gain some share, and that's going to be driven by the 75, 90, 115 getting into the marketplace, Tim. That is a horsepower category that's been growing, and there's a lot of boats that use those type engines. And I think our offering is significantly better than what we have had out there in the past, and therefore, I think we'll take a little share.

Okay. Okay. And then just to maybe put this to rest here, the boat production ramp-up issues. Do you believe that those are largely behind now? And should we then therefore see and -- especially the larger boats here, your wholesale pretty close to approximate retail, given the basically just people waiting for you to deliver the boat?

First -- and please don't be offended when I say this. We haven't had a ramp-up issue. Our...

It's a good issue. It's a good issue, probably.

Yes. It's a high class issue, in that demand is exceeding our ability to make the boats right now, and I think that's probably what you mean, Tim. And in round numbers, in our Boat business, we sell 35,000 boats, and as we're looking up to the entire ramp-up and integration, I think we'd miss just one boat in 2014 [indiscernible]. We'll take that all day.

I'm sorry, Dusty, you're cutting out there in your response there.

As we look across our Boat business as we talked about ramp-up and integration, in round numbers, we're going to sell 35,000 boats this year, and I think we're going to miss 1 boat versus our plan. That's not bad, we'll take that all day. Now the -- I think we'll end the year across our entire Boat business with wholesale and retail well in line, and our goal next year will also, if we run the business on that basis. I think Jimmy had asked earlier, and I -- Jimmy, I apologize right now for not answering your question, we've got a bunch of boats that are sold out as we go into the fourth quarter next year. So we just got to sit there and make them, and if demand were to continue to ramp up, we have to make decisions about whether we can make more. But right now, we're sticking with our plan, and our fellows, men and women who work in our operations and building those things are doing a magnificent job under a lot of pressure with real hot boats. So it's a high-class problem in that there, we've got some consumers who are waiting a while. But my judgment is there's nothing in the world wrong with a heavy product demand to be a little greater than our ability to make the product.

Okay. And then maybe a question for Bill specifically, just to -- can you quantify the expansion ramp-up cost that we're seeing here, Bill, in 2014?

Tim, I guess, if you look at the leverage performance of the Boat group, it's pretty much in line with where you'd expect the long term to be with some favorable mix benefits offsetting that. I think if you can try to play those 2 off of each other, you kind of get a feel for what the size -- what the market impact of one versus the other might be.

Okay. I think you alluded to that before, but I just wanted to revisit that. And then, gentlemen, as it relates to the share repurchase authorization and then folding that -- this into the high end, that $3.50, $4 roughly of '16, if everything goes well, you'll reach nirvana by '16. The $200 million share repurchase authorization, is that a fixed number, meaning, yes, we're going to spend $200? Obviously, that's what's authorized, but is -- are you for sure going to spend that? Or is that more of a fungible bucket if you get some attractive acquisitions? And I guess then along that share repo, are you looking at more steady level load type of approach? Or would you be more opportunistic if you had to play one end of that spectrum?

I would say it's both, Tim, that we do want to kind of orchestrate this in a steady level load sort of plan, but as we get additional opportunities presented to us, we might call it inaudible.

But I think our plan, Tim, is to spend the money.

Yes. Our plan is to spend the money.

With the $200 million towards share repo?

Correct.

Okay. And then at that play into the high-end opportunity cost here, I think you said it before, Acquisitions are your top priority. But how much acquisitions, pension share repo do you need to get to that high-end opportunistic end? Or is that just really a function of the Boat mix?

Well, it's the market.

Yes, it's the market. First, let me come back. Our first priority is not acquisitions. Our first priority, Tim, and I understand. Perhaps wasn't clear earlier is growth, and it's both organic and acquisitive. And we've got a lots of spending to do in organic growth, and we've said we also want to have room to do acquisitive growth. And then thirdly, we also try to leave our sales room to do adjacency growth, which can be either organic or acquisitive. In terms of hitting the top end of this $3.50 to $4, that Tim is always going to be driven by the market -- in the size of the rain market. And in order for us to get there, it's got to be above the range that we're planning on, which is -- the midpoint is probably 180,000 to 185,000 units. For us to go to the larger, it's going to need to be 190,000, 195,000 units with the change in mix, yes.

The next question comes from Gerrick Johnson from BMO Capital Markets.

Regarding your comment on working with dealers to trim the pipeline, Bill mentioned that activity was balanced in the quarter. So does that mean promotions, reserves, things like that, were not impacted either way on your results?

That's correct.

Okay. And Yamaha has announced a push in the freshwater on their outboard engines. Should we anticipate a change in how you go to market there? Should we anticipate additional discounting? Or what's your outlook on the freshwater outboard market with that new push by Yamaha?

Gerrick, for every action, there's an equal and opposite reaction. So we say we're going to saltwater, and Yamaha is going to be going to freshwater. Absolutely. And no, I did not anticipate there will be any change in the way we go to market or additional discounting. I think we're both going to be in the respective segments talking about product. And then more importantly, it's going to be the differentiation of service, and the ability to take care of the dealer is going to be the primary driver here.

The next question comes from Craig Kennison from Robert W. Baird. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: I'll shift gears to Fitness just to give you an opportunity to talk about that. I'm curious about how much...

[indiscernible] received. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: I'm wondering if you're all standing around the table or if you're sitting down.

Right now, we're sitting, but we've just finished the board meeting, so we stood many of us the entire time. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: So to that...

The speaker phone doesn't sound very good when we stand up. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: That makes sense. So maybe to that end, I'd be interested in, first, about how much are you spending? Or did you spend in 2014 as part of these pilots? And two, can you give us any color on how many pilots you have and how they are progressing as you work on that new opportunity?

We're spending high single-digit millions, and we'll be making a decision whether we -- how much we'll be doing in 2015. Again, our view is that we won't begin to see the impact of all this work until 2016, and so it will be a continuing drag in our Life Fitness results in terms of margins in 2015, but we're really committed to it. I don't really want to get into the number of pilots, but it's significant. With all pilots, we have the view that if every pilot is successful, we failed because we've not stressed the business model. We need pilots not to work as well as to be very successful. As we measure one element of success all though across all pilots is where we go, is the participation rate and the location that we go in, and we judge that as most firms have a wellness program. And then when we go and run our pilots, then we look at what's the increased participation rate by employees with our offering versus the wellness program, and it's fundamentally double. So that's one statistic, Craig, keeps telling us we're really into something here, and now we just got to get the dollars right.

And we have a question from Joe Hovorka from Raymond James. Joseph D. Hovorka - Raymond James & Associates, Inc., Research Division: A couple of quick questions. I wanted to go back to the incremental margins in the Boat business. I think you said that there was integration cost, production ramp-up, which makes sense. Then you said that I think the product between segments grew pretty well-balanced, but you had a 15% ASP growth. I just want to foot those 2 statements because it seems like that would suggest that you had a shift to the larger product. And then secondly, I wanted to confirm that Sea Ray does have -- or I should say, all the bigger product, but specifically, Sea Ray should have the highest or among the highest incremental margins -- the Boat group because structurally where they're at and also given that they're closer to the bottom than the top versus the aluminum. And then I have one follow-up question after that.

Joe, I think it's the, on a percentage basis, a bigger product did grow faster than the rest of the portfolio. But when you look at it on a dollar basis, they both grew about the same. So you saw some growth, and ASP is not only increased because of the shift in mix, but it also increased within each segment of the Boat business. So you've got 2 factors at play there. Joseph D. Hovorka - Raymond James & Associates, Inc., Research Division: Okay. Then as far as the incremental margin to Sea Ray versus the rest of the Boat group, are they -- am I correct in assuming that they're among the highest?

Yes. They are above-average, but you've got to remember that at the heart, that the sweet spot is that 31- to 40-foot segment. Everything above 50 still has very attractive margin on a dollar basis, but they start to trail off a bit. Joseph D. Hovorka - Raymond James & Associates, Inc., Research Division: Sure. And then as we look at the -- into the fourth quarter, I think you said you'd have a modest loss in boats, but -- do we start to see those incremental margins improve in the fourth quarter and they get much better in '15? Is that the kind of way you're thinking about it? I mean, will the ramp up and the integration cost be behind us by the time we get to the fourth quarter?

Here's the -- let me give just a bit different perspective. We are going to continue at the product introduction pace we have coming, Joe, have integration ramp-up activities that we got to manage for a pretty long time in this business. So as an example, and I'm not -- for people who follow the industry closely, I'm not divulging any secret. We're introducing a new 590 -- that's a 59-foot boat at the Fort Lauderdale Boat Show next week. That boat has got to be integrated now into a production line that's doing, amongst others, the 51 and 65, and we've said that 65, which was again to integrate in, say, midyear, late spring, we won't be through real ramp-up until the end of this year. That 59, we won't even start the integration on that until spring of this year, and that's going to be something that we're going to have to manage. As we look at other plants, I can tell you there's not a plant in our Boat business where we don't have lots of new products coming to the market through our product plan as far out as we can see. And as we've always said, this requires that when we move it from engineering to production -- an example I'll always give is if you've ever built a house, the builder can't build what the architect provides. There's always a few things that aren't just perfect, and that's a bit true in the Boat business, and we have to get the supply chain ramped up with this. We -- the employees have to work through the best way to build the product, and teach themselves, and all of that takes time and it's a bit inefficient. But that's what it is. So as we look at leverage on the Boat business going forward, it's a little bit below the 20% right now, and it will be between 20% and 25%. And I think as you think about it for the future, think for Boat business more low end of that range versus some of our other businesses.

At this time, we would like to turn the call back to Dusty McCoy for some concluding remarks.

Thank you, ma'am, and I apologize for the length of this call, and it's the verbosity of me answering the questions. So I thank all of you for your interest. Thanks for the kind words that many of you gave us, and we'll make sure that our people out there that are doing it, understand that you recognize that they've done. Thanks for everyone.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.