Good day, ladies and gentlemen, and welcome to The Clorox Company First Quarter Fiscal Year 2013 Earnings Release Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would like to now introduce your host for today's conference call, Mr. Steve Austenfeld, Vice President of Investor Relations for The Clorox Company. Mr. Austenfeld, please go ahead.

Great, thank you. Welcome everyone, and thank you for joining Clorox's first quarter conference call. On the call with me today are Don Knauss, Clorox's Chairman and CEO; Larry Peiros, Executive Vice President and Chief Operating Officer; and Steve Robb, our Chief Financial Officer. We're broadcasting this call over the Internet, and a replay of the call will be available for 7 days on our website, thecloroxcompany.com. Let me remind you that on today's call, we will refer to certain non-GAAP financial measures including, but not limited to, free cash flow, EBIT margin, debt-to-EBITDA and economic profit. Management believes that providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. Reconciliation with the most directly comparable financial measures determined in accordance with GAAP can be found in today’s press release, this webcast's prepared remarks or supplemental information available in the Financial Results area of our website, as well as in our filings with the SEC. In particular, it may be helpful to refer to tables located at the end of today’s earnings release. Please recognize that today’s discussion contains forward-looking statements. Actual results or outcomes could differ materially from management's expectations and plans. Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management's expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. On today's call, Don will start with his perspective on the management changes announced earlier this week, including Larry's retirement, before then turning it over to Larry to discuss our volume and sales results. Steve will follow with a review of our financial performance for the quarter, as well as discuss our outlook for fiscal year '13. Finally, before turning it over to Q&A, Don will close with his thoughts on our first quarter performance. With that, let me turn it over to Don.

Okay. Thank you, Steve, and thanks, everyone, for being on the call today. We know it's certainly been a very challenging time for many of you who on the Eastern Seaboard, obviously, due to the storm and its aftermath. And we certainly hope each of you and your loved ones are faring well. We greatly appreciate your flexibility this week as we rescheduled this call to obviously give folks some more time along the Eastern Seaboard to begin recovering. So first, let me start off by recognizing Larry Peiros, our Chief Operating Officer. You obviously read in the Tuesday press release, Larry has announced his retirement from the company. We're pleased Larry is staying on for the next 5 months to ensure a smooth transition of his responsibilities. However, this will be his last earnings call, it's something I know he deeply regrets. For more than 3 decades, Larry has had a profound impact on the company, rising from the ranks of a summer intern in 1980, overseeing our -- [Audio Gap] our business operations and core functions as Chief Operating Officer. He's had a significant hand, obviously, of the company's strategies and priorities and the results we’ve driven. He's been certainly a great partner to me over last 6 years. And -- but Larry’s not one to enjoy being in the spotlight, so I'll keep my remarks brief. Suffice it to say, the company owes Larry a depth of gratitude for his leadership with many contributions, so we wish him well as he heads into his retirement. So while we're going to miss Larry's experience and talents, we do have a robust succession plan that provides I think a really rich source of internal talent. And I'm excited about the opportunity to give some of our strongest leaders, many…

Thanks, Don, and welcome to everybody on the call. First, let me say that I've truly enjoyed my 32 years at Clorox. It's a great company and a great group of people. I will probably always have bleach running through my veins, but now is the right time to turn to the next generation of Clorox leaders. I, too, want to congratulate Benno and George. I've worked with each them for many years. They're both incredible businesspeople and also gifted leaders. The company is in very good hands in moving forward. With that, let's get on with the call and our Q1 business results. We had a solid start to fiscal '13, with 3% sales growth on top of 3% sales growth in the year-ago quarter, and sales up in 3 of our 4 business segments. Our Q1 volume was down about 1%, primarily driven by price increases taking over the last year to address increases in commodity cost. We also had one less shipping day in the quarter and have seen strong volume results in October. Overall, we feel good about the growth in Q1 and confident about our 3% to 4% sales growth outlook for the full year, solid performance in what remains a very tough economic climate. Turning to U.S. market share, this is the first earnings release in which we are reporting share results based on the new multi-outlet data. Because I think most of you know, this data includes gathered data from Walmart and a few other retailers that were not previously sharing information with syndicated suppliers like IRI and Nielson. The new database covers about 80% of our U.S. retail sales. The remaining 20% is in accounts like Costco, Home Depot and PetSmart that do not share data. Our U.S. multi-outlet share results reflect…

Thanks, Larry, and welcome, everyone. We had a good start to the fiscal year. And as you saw on the press release, we reconfirmed our outlook. I'm going to provide more depth on our first quarter results and our financial outlook for fiscal '13. Starting with sales, we delivered 3% sales growth in the quarter, which included 3 points of price increases and over a point from acquisitions, partially offset by nearly a point from the unfavorable impact of foreign exchange. Volume was all also down about a point due to the pricing increases. Turning to gross margin, we're very pleased with our efforts to rebuild margins are beginning to pay off. Our first quarter gross margin increased 110 basis points to 42.9% of sales compared with 41.8% in the year-ago quarter. The biggest factors contributing to the gross margin improvement were strong cost savings across our portfolio of $26 million, with $22 million of that reflected in gross margin and the benefit of price increases. These factors were partially offset by inflationary pressures in manufacturing and logistics and other supply chain costs. As expected, commodity cost were about flat, and we anticipate an overall flat commodity environment for the fiscal year with some variability across the quarters. For the full year, we continued to anticipate the combined benefit of cost savings, and price increases will enable us to deliver both gross margin and EBIT margin expansion. We also continue to anticipate 150 basis points of margin benefit from our cost savings programs. First quarter selling and administrative expense increased versus the year-ago quarter, due in part to the continued infrastructure investments, including our IT investments in Latin America. We recently completed our IT systems rollout in the region as planned, with all 12 countries now up and running on…

Okay. Thanks, Steve. So I think in summary, we're off to a good start to the fiscal year. We're, I think, especially pleased that we delivered increases in both sales and margins in the quarter. And although it's still early and there are factors we need to watch closely, we're certainly confident in our outlook and our plans for the balance of the fiscal year. I think in particular, we're encouraged about the growth we continue to see in our categories, and we believe our product innovation plans will help drive continued category growth and maintaining the strength of our brands. And the next wave of innovation for us, of course, is in the January timing. We certainly do have a proven track record of innovation. I think, as many of you know, for the last 10 years, we've delivered against the annual target of at least 2 points of incremental growth. And right now, I can say with high confidence, we're on track to meet our higher target of 3 points of growth in this fiscal year. So as Larry mentioned, we're pleased with the introduction of new concentrated Clorox Bleach that's doing quite well and feel great about the new products that we've lined up for this January launch. So with that, why don't we open it up for your questions?

[Operator Instructions] And we will take our first question from Joe Lachky with Wells Fargo.

Congratulations on your retirement, Larry.

Thank you.

I guess I'm a little bit concerned with the volume being negative this quarter, and I know you mentioned pricing was an impact there. But it seemed like in the last half of 2012, you guys were able to offset that a little bit and gain volume, even though you had a significant pricing. And I guess the 3% pricing in the quarter, it seems like we're almost getting to a point where it lapsed. So is this volume just like a temporary impact of like maybe weakness in Household, kind of one-offs in Charcoal and that sort of thing? What are you guys kind of expecting going forward? Can we see that volume start to turn around?

So let me give you a perspective on volume in the quarter, and the overwhelming factor is pricing. And you know we've been taking a lot of pricing, some of it fairly recent, to offset the commodity cost. And I expect that, that particular factor to be with us pretty much throughout the year. We did have one less shipping day, which doesn't sound like a big deal but does impact you a bit in terms of delivery in the quarter. We did have a weak quarter on Charcoal. And it really was indexing off of a very high base period driven by some incredible merchandising. I think if you go back to the year-ago quarter, you'll remember us talking about some particularly hot feature pricing in places like Home Hardware -- the Home Hardware Channel where they're trying to drive traffic with the Kingsford brand. And then a little bit of a [indiscernible] from nonstrategic export issue in International. So I would say the one factor that will continue is really the pricing factor. The one less shipping day, we're already making up for that in the current quarter. Charcoal will be back to normal. Of course it won’t impact as much than not only because it's pretty small now, but we expect a normal year. And we start lapping this little bit of a nonstrategic export issue immediately. So I expect it will be about flattish for the year and most of it will be around the pricing impact.

Yes. Look, the only thing I'd add, Joe, is if you take this one less shipping day for example -- it doesn't -- as Larry said it doesn’t sound like a lot, but we do on average about 1.5 million cases a day. Our volume decline in the quarter was 800,000 cases. So if we've had the normal shipping day, we would've a positive volume. So I think there will be some pricing impact throughout the year. And I think Charcoal, as Larry said, will return to more normalcy now. So I wouldn't put too much into the quarter.

Okay. And then if I could just ask you a quick one on category growth. And correct me if I'm wrong here, I think you said category growth was up 2% in the quarter. Is that all outlet? I mean -- and I guess if you look at it on the track channel data, which is all we can see, looked like some of the key categories like garbage and lawn bags and bleach and charcoal, the growth is kind of sequentially slowing there. So what are you guys seeing on an all outlook basis as far as category growth? Is it stabilizing? Is it increasing? And how is that trending?

Okay. So just to clarify there, the all-outlet data that we referred to now is really the MULO data, which is 80% coverage. So of course we don't have any -- no longer have any kind of category growth numbers on these untracked customers like the Home Hardware, that specialty channel and Costco. We've obviously tracked our result, but we can't track the category. So if you look at the MULO, the multi-outlet data, the category is growing about 2%. If you look at that versus history, we've seen a delta of improvement of about 1 to 2 points over the last 3 years or so. So we are seeing some recovery in our categories. There is always variability category-by-category. Differences are driven by various things like innovation, in particular. But overall, the categories are about 2% on the quarter in the multi-outlet data.

And we'll now take our next question from Joe Altobello with Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: I also wanted to congratulate Larry on retirement. Good luck. It was very, very enjoyable working with you over the last few years. So good luck with that.

Thank you. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: In terms of the EBIT margin, I think that was the biggest surprise, the gross margin being higher and also the EBIT margin being higher. Could you kind of walk us through what the big surprises were to you at least in the quarter?

Yes, Joe, this is Steve Robb. And as expected, we fully anticipated that the gross margin would be up on the quarter; and of course, it was. But it came in better than we had expected. There was really 2 drivers for that. Number one is our cost savings program. Cost savings came in very strong. As you know, we target 150 basis points of margin improvement from the cost savings programs each year, and we've got about 170 basis points in the first quarter. The second driver was the timing of certain manufacturing costs. Our inventory levels we're running a little bit higher because of the SAP implementation and some new product work. And so we had some favorability come through inventory absorption. And some of that is going to reverse out in subsequent quarters. So I would say the fact that we did better in the first quarter on an EBIT-margin basis is really a reflection of the strong gross margin. But I would not have you take all of the goodness from the first quarter and project it to the full year. A good part of that's going to fall, but not all of it because some of that is in fact timing. Nonetheless, we feel great about the margin improvement plans, and they're working for us. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Okay, that's helpful. And then just secondly, you mentioned earlier that there is some competitive activity going on in some of your categories. I imagine that includes Glad, but which of the categories are you seeing the most intense competitive pressures?

Joe, let me first go back to the first question on category consumption, because Don pointed out that I was -- the 2% I referred to in terms of category growth is a 52-week data, the past quarter is more like 1%. So we have seen a bit of a change there. With respect to competitive activity, definitely most acute in the Glad business and the Glad Trash business, specifically. That's very typical when you see commodity pressure -- price pressure relief that some competitors peeled back some of that commodity savings in terms of trade spending. And that's where we are responding to some degree in kind relative to the competition. The rest of the portfolio, I would say, we're -- it's fairly quiet. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Okay. So it's really concentrated in Glad Trash at this point?

Yes.

And our next question will come from Jason Gere with RBC Capital Markets.

I guess I just want to kind of go back to the price elasticity that you talked about, what you saw this quarter. Can you just kind of frame up how pricing was -- the effect on volume compared to maybe what you saw a couple of years ago when we're at the heart of the recession and obviously, there was a trying time to take pricing through. So did you see this -- I guess I'm trying to frame up the consumer and right now, the impact of pricing on the consumers. The consumer is weak as you anticipated. I do have a follow-up after that.

So in terms of the -- I think we've talked many, many times about all these models that we run, which are terribly predictive of the impact of what our pricing actions are going to be. And I would say those predictions remain very high, very accurate. We have not seen any difference in elasticity, by and large, during the economic downturn. So it maybe -- I'm sure a little counterintuitive, but we have not really seen a change in elasticity driven by the economic downturn. What you just see, obviously, is people seeking more value and trading up for larger sizes and bigger packs. So there is that kind of value in tact because of the recession. And we can see -- continue to see that in things like trash bags and wipes where people are trading up to either the club sizes or larger packs within other channels.

The only thing I'd add, Jason, is through panel data now, we know that about a little over 80% of the shopping trips are -- combined as still in trips. So this is buying 15 items or less. So clearly, people are doing a lot of channel-hopping, value-seeking, looking for the deals. But despite that, I think the model accuracy that we've seen has been very high.

Okay. And I guess the next question is really kind of looking at advertising versus promotional spending. And I think you're saying in Glad, there's a little bit more promotional spending out there. The advertising levels have been kind of near the low of your long-term 9% to 10%, so with some of that gross margin upside that you're seeing. Category growth, I think you're saying, is now closer to the 1% in the quarter. What are the plans -- at least what you can say in terms of reinvesting a bit more of the gross margin upside into advertising so you can kind of hit that 2% to 4% sales growth with ease?

This is Steve Robb. Let me lead off on this question. So the advertising, as we have communicated and expected, was about 9% of sales; and that's in the 9% to 10% range. I think if you pull up the International business and look at the U.S. domestic business, the number was closer to 10%. Keep in mind that some of our international markets, particularly those markets where we're focusing on price controls and other challenges, we're trying to be smart in the deployment of our advertising dollars, creating the demand that you may or may not want to fill is a challenge. And so I think we feel good about the advertising levels. I think over the long term, as we rebuild the gross margins, we'll make sure that we're reinvesting to keep the brand equities healthy over the long term. But I feel very good about the level of investment we're making today.

Yes, I think that's the important point on this is that the U.S. spending is at the upper end of the range. It's just the international drag; and particularly, Venezuela, Argentina with the price controls, it doesn't make a lot of sense to do a lot of advertising until we get the price gaps, right?

Okay, great. And Larry, congratulations.

Thank you.

And we will take the next question from Ali Dibadj. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: And just to share, congrats again, Larry, and Benno and George. To get to a couple of things, wondered if you could talk a little bit more in detail about the drivers of top line growth that you expect accelerating going forward? You talk a little bit about innovation, if you could talk a little bit more about that. And also the impact of the concentrated bleach in that kind of calculation given some of your tougher compares across the board.

So innovation is definitely will be the #1 driver of improvement over time. And we feel very good about our innovation program. We've exceeded our target last year, and we expect to be near above our target for this year. It's pretty much across the board, so it's not a focused on 1 or 2 business units, but it's pretty broad-based. And I'd say that's the #1 thing that will drive growth and drive both brand growth as well as category growth.

The other thing I would add, Ali, is the Healthcare business, as we talked at the May Analyst Meeting with all of you, we look at the business in 3 chunks: the U.S. Retail product, Professional Products and International. I think if you look at Professional Products, there's another acceleration there for our business, even the base -- we talked about the base business in health care being up double-digits again. We see that continuing to ramp up. So as we go through the balance of the year, as we integrate Aplicare and HealthLink and we see some cross-synergies, if you will, in terms of, for example, the HealthLink sales force selling Clorox disinfecting germicidal wipes into doctors' offices, there's another piece of top line acceleration. And then I think lastly, we are seeing some stabilization in some of the international markets. We'll see what happens in Venezuela with the devaluation. We fully expect it, but we are seeing some fairly good volume growth in a lot of the Latin American countries along with price growth. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: So I'll get to International in a second, but just if you could help me with the concentrated bleach part in particular, that question. So as that’s rolling out, what type of volumes are you seeing, what type of category response are you seeing? We see it just as well as you do that the private label in any other brands in that area, if any, are following. So what are your hopes from that particular innovation, if you can share those?

Well, it's early. Really hard to conclude from the anecdotal and data we have. But I would say, anecdotally, we're seeing very positive trends in terms of shipments. I was -- I visited a bunch of stores in Chicago, which is part of the first wave, the shelves look terrific. Private labels have followed. We haven't really lost any incremental -- haven't lost any shelf space. So remember, facings on shelf is higher and out-of-stocks are therefore down. We saw the first growth in terms of CLB shipments in 2 years in the quarter. So we're hoping this will stabilize and start to grow the Clorox Bleach business over time. We're pretty optimistic at this point, but it's definitely early going. As I've said, we've been in wave 1 for about 2 to 3 months and just started wave 2, and we'll finish out at the end of the fiscal year.

I think the other thing I would add is we're seeing better growth in the wave 1 conversion markets than we are in the balance of the country. So I think some of that may be due to out-of-stocks going down over the weekends. Also, there's more shelf presence for some of the higher-margin trade-up items like gel bleach in those shelf sets. So as Larry said, it's early, but those trends bode well, we think. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And is it -- so is it better or worse that [indiscernible] falls. It sounds like you're saying it's a positive because it probably raises confusion, kind of gets everybody on the same page from a consumer perspective, it’s a bigger driver.

Absolutely. We did this before in many other categories couldn’t have converted to a more concentrated formula. And you definitely want the category to convert with you so that you're price value perception doesn't get out of whack with a competitive set. So we work very hard with our retailers to convert the entire category versus just our brand. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: Okay. Then 2 other relatively quick ones, one is on inventory. So you've been doing SAP for a while, but this is the highest inventory day -- at least I’ve seen in a long, long time, many, many years. And so how much of that really is SAP versus some lower-than-expected volumes for resetting because of the concentration on bleach or Charcoal or -- can you maybe just aggregate that for us in terms of what the driver of the increased inventory?

We certainly adjust on a couple of the drivers. SAP is certainly a part of this. We -- don't forget, in the last 3 or 4 months, we've been bringing up quite a few of our Latin American countries and we've got all 12 countries now up and running. And we did bill some inventory in advance of that just to make sure that if there was any disruption, which we're pleased that there wasn't, but then we would have inventory on hand to be able to work through that. We also were building up some inventory to work through the transition to the new bleach and then just felt the new products. So inventory is up a bit, but we've got plans in place to bring that back down again to a more normalized level, and feel good right now about the inventory levels.

Right. And I think just to put into perspective, the total inventory levels for the company in dollars we're about 2.5% above where they were last year in the quarter. So I don't think it's a significant move. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: Even with the 1 day lost adding on okay, its looks like they’ll go down. And then do you want to get back to the International comment, so what are you seeing? Because we're not seeing necessarily great trends in Latin America in many categories, save for Venezuela. So if you were to exclude Venezuela, it sounds like you're entering new areas. Can you give us a little bit more of a view on that? And then also about how you're thinking about Venezuela specifically in that region?

So we are seeing growth in our Latin America business, which is the biggest -- by far, the biggest chunk of our International business. So I would say, the results on the top line are pretty good. We are seeing kind of high single-digit growth in terms of the categories. Actually, we're growing share right now across the categories, so we're feeling pretty good about that. The issue in Latin America is obviously on the bottom line more than the top line at this point, so where we have price controls. And unfortunately, 2 of our biggest countries are where there are price controls, Venezuela and Argentina. That's where we're having some margin pressure, and that shows up obviously in the segment results. Now part of the decline in profit in the segments is due to the SAP implementation, which we have just completed. But a lot of this is due to the pressure that we had to improve margins while price controls are in effect and we had high inflation rate. But the volume and sales rate looks, I think, very solid.

Just to give you a little color on that, Ali, if you look at -- give you an example of 3 countries: Mexico, Peru and Chile, 3 of our larger midsized countries in Latin America, we're seeing volume growth in the mid- to high-single digits. I think one of the reasons the volume is a little bit less than those countries are putting out is because of the export business we exited in Central America, which we didn't think was profitable or know it wasn't profitable. So I think the base trends in those countries look pretty good.

Our next question will come from Chris Ferrara with Bank of America.

Could we -- I just want to follow-up on Venezuela. Could you talk I guess a little bit perspectively about what you think Venezuela could possibly look like over the coming months, right? I mean, I think it seems like a foreground conclusion you're going to see a devaluation. Can you talk about how you'd handicap the odds of price control sustaining, remaining in place even through a devaluation and I guess what you're doing to prep for that?

This is Steve. Let me take the first part of that, and maybe Larry can weigh in on some of the business things that we're doing. I think we, like everyone else, fully expect that there's going to be a devaluation in Venezuela. And in fact, as we've previously communicated, we've included in our earnings per share outlook about a $0.05 earning drag because we believe a devaluation is highly likely. What's uncertain to us, and I think others, is how much of a devaluation we're going to see and when it's actually going to occur. We've tried to take appropriate actions in terms of making sure that you don't overinvest in the country, making sure that you deploy your assets as effectively as you can to minimize the impact of the devaluation. But at the end of the day, there's very little that you can actually do to prevent it. You basically have to respond once it actually occurs. And we think we've taken all of the appropriate steps. As far as price controls, again, over the very long term, price controls are very difficult to keep in place and maintain their effectiveness. But I think we expect that price controls will continue even after a devaluation, at least for some period of time. Although generally, after devaluation, what you tend to see is you get some pricing flexibility will tend to open up a bit. But I think we're going to have to just see what the government does and then respond in kind.

Yes, in terms of the sales of ARM [ph] results, we're positive in Venezuela at this point. So that's good. Categories, I would say, are kind of flattish, not a lot of growth. And as Steve said, we don't know when the devaluation will hit, and we don't know what the impact might be on price controls post-devaluation. But right now, about 70% of our portfolio is affected by the price controls.

Got it. And a quick follow-up, I guess. Do you guys still expect EBIT margins to be down in the first half of the year?

I think EBIT margin is going to be a little bit better than that because obviously, we had good growth in the first quarter driving the gross margins. So EBIT margins are not likely to be down in the first half, but they will continue to be challenged because we're completing the SAP implementation in Latin America and/or investments in Pleasanton, California. So I think you're still going to see some challenges there.

Right. But you're not changing your full year EBIT margin outlook right? So I guess some of that relates to what the timing on the manufacturing variances you're talking about that will -- that you'll give back in the back half of the year, is that the way you're thinking about it?

Yes. And we've got a range on it. The 25 to 50 basis points, I would say we're off to a very good start to hit the 25 to 50 basis points or probably even more confident today than we would've been 90 days ago. But we still believe that 25 to 50 basis points of EBIT margin makes sense. And again, as we just talked, we're closely monitoring situations, including Venezuela, which depending on what happens there, that can also have an impact on margins.

Next is Bill Schmitz with Deutsche Bank.

It's Nick Cavallo filling in for Bill. Just wanted to ask quickly about the Lifestyle segment. And I think you guys have laid out the drivers of at least most of the volume decline in the quarter. But curious in this segment in particular, if you've seen any inventory destocking or any changes in customer ordering patterns? And then secondly, I was wondering if you would actually tell us what the sales decline was for Brita On-The-Go in the quarter?

So no significant inventory changes that I'm aware of, so nothing there that I can point to. There is a comparison on Burt's Bees to a quarter that had a lot of pipeline on new products. And so this -- the results were kind of flattish for the quarter, but the consumption rate is actually very high. So the business is very healthy. We just hit kind of a year-over-year comparison issue that deflated the shipments.

Got it. And do you have the sales decline for Brita On-The-Go?

We don't release that level of information, but the Brita On-The-Go continues to do very well for us, and we're very pleased with the results.

We're just launching the introductory period, and that's what drove it down somewhat.

Next is Javier Escalante with Consumer Edge Research.

I have -- I mean, I'm going to the micro level, but it has to do with the $50 million to $55 million spending and how that impact operating margins calculations on your guidance. Could you at least tell us 2 things: one, whether if you can -- did that spending last year had -- was lumpy or was evenly spread? And when do you think the $50 million to $55 million spending is going to be over this year? I -- my understanding is, is that it's going to go all the way to June next year. So if you can let us know when do you expect to complete the idea IT spending on the R&D facility?

Javier, this is Steve. So we are anticipating still $50 million to $55 million of restructuring and other related costs. The bulk of it, as a reminder to everyone, is the IT investments we're making in Latin America and the rebuilding of our R&D facilities in Pleasanton, California. We expect a disproportion amount of that is going to fall in the first half of the fiscal year, but we also continue to expect cost to continue into the second half. So it will continue through Q3 and Q4 of this fiscal year. In terms of the -- how that fell in the first quarter to give you a little bit of color, we did see a larger amount come in this quarter versus the same period in the year ago. We had about $14 million, $15 million of infrastructure-related costs this year, and we had about $7 million last year. So that's part of the reason you're saying SG&A was up a bit in the first quarter of this fiscal year.

And going into the -- I mean, just for modeling reasons, going into the second quarter, it seems like we should be modeling a pretty big hike in that spending as you accelerate for the completion of all these 2 projects, right?

I don't want to get into the quarter-by-quarter split. But let me just say, a bit more than 50% is going to certainly fall in the first half and a bit less than 50% will fall in the second half. And we're going to continue to see expenses, obviously, come through the second quarter. You are likely to see SG&A as a percentage of sales higher in the second quarter because of the seasonality of sales and these investments that we've talked about. I think that gives you a pretty good sense for your modeling.

And we'll now go to Connie Maneaty with BMO Capital.

And let me also offer my congratulations to Larry, George and Benno. About Venezuela, the $0.05 hit in this fiscal year, does that assume Venezuela operates at a loss or margins are just compressed? Secondly, should we -- assuming first a January timeframe for devaluation, do you think it's wise to put another $0.05 into the back half of the calendar year, which would be the first part of your fiscal -- next fiscal year? And then finally, if the business goes into a loss, do you make a determination at some point on whether or not it's in your interest to stay there?

Okay. Let me see if I can answer you to those in turn. So first, we don't give out the relative profitably of the countries, but the #1 challenges we've indicated before is the rising inflation and the pressure that it creates on margins, particularly in a price-controlled environment. So it's really a margin challenge that we're having. Second, we have a good business in Venezuela today. The business is stabilizing. We've got leading brands. Even with everything that's going on, we're going to continue to invest for the long-term health of the business, and we like the business. But clearly, we're going to be challenged over the next couple of quarters. And then finally, regarding the devaluation, we wish we knew the timing. We don't. We put a $0.05 placeholder into the outlook because we recognize this as a fairly high risk that something is going to happen. But as I mentioned earlier, the timing, the amount is unclear. So I don't think we can predict whether the $0.05 is sufficient or whether you need another $0.05. I think we need to see what the government does one, with the devaluation; and then two, how that manifests in the form of price controls and what adjustments they make there if any. So we're just going to need more time on that, but we'll keep people updated as we all learn more.

Are you having any negotiations or conversations with the government about the tradeoff between price controls and actually being able to supply retailers and consumers?

So there definitely are ongoing conversations with the government. The government has reached out to manufacturers. I can't say that we've seen a lot of impact from those conversations just yet, but they are going on.

And I'm hoping, Connie, that post the election now, that those conversations will become more fruitful than they were before the election.

We'll now go to John Faucher with JPMorgan. John A. Faucher - JP Morgan Chase & Co, Research Division: Larry, congratulations as well.

Thanks, John. John A. Faucher - JP Morgan Chase & Co, Research Division: There've been a number of incremental restructuring announcements over the past few months from many of the consumer companies, even ones like you that have sort of a strong history of delivering on cost saves. And I guess I'm wondering if there's some sort of sense that companies need to run faster these days just to standstill? And I know you're a little more optimistic about the categories, but it certainly seems like growth has taken a step function down over the last couple of years. So as you look at that, do you have any thoughts in terms of whether your current sort of incremental approach to cost savings needs to step up in any way? Do you need to start thinking bigger about this? Or do you feel like you have the right approach right now? And how long can that keep going?

Yes. Let me start, John. I think because a number of our competitors are who are stepping up, are stepping to get into the range we've delivered. So I think we've been in the zone, as you know, of 150 to 200 basis points a year for multiple years on end. And I think the first quarter of 170 basis points is just another indication that we think we've got the right approach to this. I do think, to your point, that companies are obviously getting more and more focused on cost savings. It's something they can control a lot more than they can control category growth or what the consumer is doing. I think, though, that based on the engagement of our people, the strength of our brands, we want to stay focused on the approach we've got and not whipsaw this organization with this whole notion of big layoffs, which we just don't think are necessary. John A. Faucher - JP Morgan Chase & Co, Research Division: Got it. And then is the time frame you guys have historically talked about sort of having visibility, I don't know, like say 4 or 5 years out, do you feel like you still have that level of visibility with your current programs?

Yes, we actually run a 3-year pipeline. So we literally have teams of people as we've talked before that are not just managing cost savings that we're focused on delivering this year of 150 basis points, but they also project out 1, 2 and 3 years and both develop the ideas and then we start to put plans in place. And I think as Don said -- and this is really important, we would rather focus on consistent, steady cost savings results because we think over the long term that translates into better margins than focusing on cost savings for short periods of time, and then people are off doing something else and then they come back to it. So this notion of consistency in your cost savings and focusing on a 3-year pipeline and making what I would define as modest, smart investments over time to support that, we think it's a best-in-class approach. And it certainly worked well for us.

And I think that systemic approach, John, if you look at once we get past these investments this year, I mean we'll get back into this 13.5% to 14% range, which is a top tiertile performer and we've been there for years. So I think if that systemic consistent approach can deliver that kind of result, we think that's actually the right way to go.

And at this time, I'd like to turn the conference back to Mr. Knauss for any additional or closing remarks.

Thanks. Well, thank you, everyone, for joining us on the call. I know it's been particularly difficult for a number of you, and we certainly hope things start to settle out in the Northeast soon. We'll look forward to talking to you at the -- in February as we get through the second quarter, but thank you for being on the call with us today.

Thank you very much. And that does conclude our conference for today. Thank you for your participation, and you may now disconnect.