Good morning, ladies and gentlemen. Welcome to the Masco Corporation 2011 Fourth Quarter Conference Call. As a reminder, today's conference is being recorded and simultaneously webcast. If you have not received the press release and supplemental information, they are available on Masco's website along with today's slide presentation under the Investor Relations section at www.masco.com. Before we begin management’s presentation, the company wants to caution you that written and oral statements made in this presentation that reflect the company's views about its future performance constitute forward-looking statements. The company's actual results may differ materially from the results discussed in the forward-looking statements, and you are cautioned against relying on them. The company's future performance may be affected by factors discussed in the company's risk factors contained in the Form 10-K and its 10-Qs and in other filings with the company makes with the Securities and Exchange Commission. The company also directs your attention to the note at the end of the earnings release, which contains a cautionary reminder about non-GAAP financial measures. After a brief discussion by management, the call will be open for analyst questions. If we are unable to get to your question during the conference, please call the Masco Corporation Investor Relations office at (313) 792-5500. I would now like to turn the conference over to Mr. Timothy Wadhams, President and Chief Executive Officer of Masco. Mr. Wadhams, please go ahead, sir.

Thank you, Shalon, and thank all of you for joining us today for Masco's Fourth Quarter 2011 Earnings Call. I'm joined by John Sznewajs, our CFO, and if you would please flip to Slide #3. 2011 continued to be a challenging environment. We didn't see any lift in North American housing till very late in the year. Europe continued to be unsettled from an economic standpoint, again, particularly in the second part of the year, and we saw a mix shift in both of our major markets, less favorable. Commodity cost pressures were an issue for us. We ended the year with about $35 million of unfavorable relationship between price and commodities. And the retail environment continue to be very competitive, a lot of promotional activity. And while we had some businesses that performed very well, overall, our financial performance in 2011 was disappointing. We didn't get the improvement we anticipated in certain areas, and that was disappointing to us. If you flip to Slide #4, I'll talk about some of our key financial data for the year. On a full year basis, our sales were flat. In the fourth quarter, we were up 1%. And to add a little color to that, our sales to key retail customers in the fourth quarter were down low single-digits. And if you adjust for some of the products that were exiting in Cabinets, we would have been up low single-digits. That's pretty much the same performance that we had in the third quarter. And from a trend standpoint, for us, October was down slightly, but November, December, we started to see a little bit of improvement. We were up 3% in both of those months compared to the prior year. And as we head into 2012, we've got some nice momentum. We're…

[Operator Instructions] We'll have our first question from Peter Lisnic with Robert W. Baird. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Tim, I just wanted to get a feel for -- if we look for -- at Plumbing and Paint for 2012, can you give us an idea of what price and growth spending might do to the incremental profitability outlook there for '12?

Yes. In terms of -- let's start with the Decorative Architectural segment, where Paint is. Yes, I would guess there, Pete, that we'll -- definitely see some pressure in terms of price/commodity relationships in the first quarter. As I mentioned, we're in the process of implementing price increases at this point in time, and TiO2's been very volatile. But as we get those prices in place, we should be in good shape as we work our way through the rest of the year. In terms of incremental growth spend, we do not anticipate any incremental growth spend in 2012 compared to 2011. So we shouldn't see anything incremental there. In Plumbing, we finished the year with a positive price/commodity relationship in the fourth quarter. On a full year basis, we were down in that segment about $15 million, and that really relates to the hedge. So in the second half the year, we started to see some improvement minus the hedge in terms of price/commodity, and I would expect it to carry forward into 2012. The -- copper's gone up a little bit, but our sense is that we'll be working -- we usually have about a 2-quarter lag in terms of significant price volatility there. So my sense is that if things stay where they are, we ought to see a more positive relationship and recapture some of the negative impact from last year. And we don't see any additional growth initiative spend in that segment either as we go into this year. I mean, there'll be -- there are programs that we're supporting. We probably spent about $25 million in that segment last year, I think, but don't anticipate anything incremental as we get into 2012. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Okay. Perfect. And then just as the follow-up question. In Cabinets, in terms of the forecast or hypothetical that you laid out, how subject is that to the pricing environment improving or remaining stable with kind of where it's at currently?

Yes. There -- I don't think we are anticipating any significant price increases going into 2012, Pete. We had some in the latter part of last year. One of the bigger issues in our Cabinet group is really international. I talked a little bit about top line risk, certainly given some of the economic issues that we face in the markets that we serve over there. The other issue that's been a big deal for us there has been the particleboard issue with our Danish ready-to-assemble manufacturer. We had some negative price/commodity impact throughout the year. My sense is they have been able to get some price, so we'll be able to offset part of that. But that would be a little bit of a potential headwind as well. Pete?

We'll go next to Nishu Sood, Deutsche Bank.

I wanted to ask a first question about the Milgard segment and the goodwill write-down that you took there. The energy tax credits have obviously pulled forward some sales and then depressed sales this year. So I was just wondering, as you evaluated the business, was that something that was taken into account? I mean, obviously, you would expect some rebound in sales as the effect of that kind of begins to comp into the past.

Well, I think, Pete, that's really -- or excuse me, Nishu, that's really a longer-term situation. You might remember when we discussed that segment in the third quarter, we mentioned that we closed 3 of our manufacturing facilities. And the real driver for that was really our perception -- and hopefully, we're wrong -- our perception that the recovery in housing in the Western markets, given some of the problems that they have, would be a little slower than it would be in other areas of the country. Now as we all know, that can change pretty dramatically, but that was really part of our logic, along with some improvements we've made in logistics and supply chain where we feel like we could certainly absorb the top line opportunities from those plants. So it's really more of a reduction in terms of what we think the longer-term dynamics are in the Western markets more than anything else.

Got it. Great. And also, I wanted to ask about Liberty Hardware. I mean, when we talk about Decorative Architectural, most of the time, we're talking about Behr, which obviously dominates that division. But especially in light of the goodwill markdown on Liberty as well, I wanted to ask how trends have been there and how that's contributed to volatility in that division's results.

Yes. We were down in terms of top line, Nishu, at Liberty over the past year, but there's -- that tends to be driven a lot by very large programs. You win some, and then sometimes you lose a few. And we have been very active. I think we probably spent close to $5 million or $6 million related to new displays for Liberty as we go into 2012. We've got new bath hardware as well as kitchen hardware, cabinet hardware, if you will, that will be launching in that. We're using the Delta brand in a couple of situations in terms of bath. And we've got some really good programs going into this year, and in fact, they're off to a very good start in January, a very good start. So we should see some improvement in that segment as both Liberty and Behr are off to a very good start in the early part of this year.

We'll go next to Michael Rehaut, JPMorgan. Michael Rehaut - JP Morgan Chase & Co, Research Division: First question has to do with your projections or estimates regarding starts and how that translates into sales for both Installation and Cabinets. My question is around the composition of that starts, because certainly, single-family is a different type of start versus multifamily when you talk about larger 2,000-square-foot homes versus apartments. So I mean, how should we think about -- when you talked about the general increase in starts, a lot of the increase recently has been more driven by multifamily. Should we think of that more that -- I mean, is there a difference in revenue component? Is it -- the 50,000, I mean, should we think of that more as -- if it's a normal single-family-driven type start? Or maybe you can kind of discuss for both segments what the overall exposure is to single versus multi and if there are differences in revenue exposure.

Yes. There are differences, Mike, and we did try to factor that into our revenue increase assumption. For example, from an Installation standpoint, typically, single-family is about $2,000 a job. A multifamily job is about $800. So there's a fairly significant change there, if you will. And you can imagine, in terms of cabinets, less bathrooms, et cetera, certainly much less content. So we try to factor that in. And I believe our assumptions are based on a mix of about 70-30 in terms of single-family versus multifamily. Our sense is that multifamily in the fourth quarter was probably closer to maybe 35% in terms of mix. I think on the full year basis, it was in the high 20s, but we've used roughly 30%. So we could be off there a little bit, but I wouldn't think that, that would be that dramatic. So we did try to factor that in when we estimated what we thought incremental revenue might look like as a deduct. Michael Rehaut - JP Morgan Chase & Co, Research Division: Okay. The second question on the Cabinet breakdown -- and the breakdown of the international within that in terms of 2011 was extremely helpful. But I noticed that you focused on North America in terms of the potential opportunities for improvements, and I was wondering if you could comment on the international segment, Europe. Certainly, things are slowing there. Do you -- what are you expecting for the operating profit? I mean, if sales continue to drift south, would that operating profit or operating loss increase? Or are there initiatives that you have in that region as well?

No. There are definitely initiatives, Mike. You might remember that we, probably about 14 months ago, replaced the leadership at both of those businesses: one in the United Kingdom; one in the -- our Danish facility. And so we've got new leadership in place. We've got, in effect, some new leadership team members, but again, in very demanding circumstances relative to the top line there. As we mentioned, we lost about $40 million on an adjusted basis last year. We've taken a lot of actions in the latter part of the year, particularly related to our Danish facility. We closed the plants in the fourth quarter, so that should give us some benefit going into the next year. And I did identify or mention about $7 million of cost reductions that we've identified at this point in time. That is not to suggest that we don't think that we can improve those beyond that point. I just don't want to get out ahead of ourselves at this point in time given some of the uncertainty around the top line and get any more direct, if you will, in terms of what we think is possible there. We certainly recognize that that's a big knot in terms of the loss, and we'll be working really hard to make that -- decrease that as much as we possibly can. I think I also mentioned that we got some pricing in the latter part of the year. We've done some things to rationalize our product group with the Danish facility. We've got some new technology in there from a ramping standpoint. So we think there are some opportunities, but still a very unsettled, very uncertain kind of environment. Michael Rehaut - JP Morgan Chase & Co, Research Division: And to that, can you just describe the sales progression in terms of growth in the international Cabinets throughout the year? I mean, I would assume that perhaps in the first half of '11, it was maybe year-over-year positive, and it turned to year-over-year negative into the fourth quarter. Is that correct? Maybe you can give us a degree of magnitude.

I don't know. John, maybe you've got that detail?

No, I mean -- but looking at first half, second half, Mike, we did see a little bit of deceleration into the second half of the year as things in Europe got a little bit more unsettled. But as you might think, as Tim mentioned, we've got one unit in the U.K. That economy has been relatively stable. I mean, it's not -- it's like the U.S., nothing real dramatic either one way or the other. It's more our Danish operation that experienced the fall-off in the back half of the year. Michael Rehaut - JP Morgan Chase & Co, Research Division: Okay. One more question, if I could. The Paint increase, do you expect that to kind of roughly offset the incremental TiO2 costs in 2012? Or would you expect it to result in a net positive by the time we get to the second half?

We would anticipate it would be offset, Mike.

We'll go next to Dennis McGill, Zelman & Associates. Dennis McGill - Zelman & Associates, Research Division: The question -- first question, just around the comments you made about January and February being up mid-single. It sounded like -- well, we know international is a drag in general in the fourth quarter. What would the domestic numbers look like against that single? And can you also talk product categories, maybe what you're seeing at the extremes?

Well, I can tell you, Dennis -- I can go back and break it down, but you're right. International is basically kind of flat to down in terms of what we saw in January. But I can tell you, when we look at our Decorative segment, that is up double-digits. I can tell you that in Plumbing, that's up nicely going into the first part of the year. So most of the strength is at retail in some of our remodel activity but also some very good numbers related to the installation-related business. So we're pretty much across the board. I'd say windows was probably a little bit slower in terms of what we're seeing in the other categories, but some pretty good momentum as we move into February. Dennis McGill - Zelman & Associates, Research Division: Okay. The second question would be around the Decorative Architectural segment and I guess, sort of 2 parts, one's a quick one. On the Paints and stains business, what's the split between paints and stains? And then separately, as you think about the margin in the quarter being pretty disappointing, I would think the inventory cost would have been known going into the quarter. And rather than pursue price increases retroactively, how can we think about the ability to offset commodity inflation ahead of time, as opposed to trying to get it after the fact? And along those lines, was the margin performance in the quarter what you would have expected going into the quarter? Or were there any puts and takes relative to those expectations?

Yes. I would say that the margin was somewhat consistent with what we anticipated, Dennis. One of the things that's kind of important when you think about the fourth quarter in that segment is that typically, sales -- second and third quarter's where we see the significant sales and tend to have a big drop in the fourth quarter. And because labor is a very, very small part of their cost structure, you don't get a lot of leverage in terms of the decline. So we tend to end up in what you might kind of consider under-absorbed overhead from that perspective. So -- and that's been pretty traditional if you go back over time, I mean, and look at margin sequence. We did have, as I mentioned, unfavorable price/commodity relationship in the fourth quarter in that segment. And so from that standpoint, I'd say we probably came in about what we anticipated when we went into the quarter, given what we anticipated demand was going to be. But having said that, we did get some really good traction, as I mentioned, coming out of the blocks and in terms of early 2012. Your question on paints and stains in terms of the composition there, this is more off the top of my head, but I'm going to guess that stains are probably less than 20% easy, maybe 15%.

Yes. I think about the 20% range.

Yes, mid-20%, Dennis.

Yes. And I guess kind of one thing to add to Tim's comments about the quarter, we did incur some incremental advertising in the quarter to the tune of about $4 million or $5 million that we probably didn't anticipate going into the quarter. Dennis McGill - Zelman & Associates, Research Division: Okay. That's helpful. And then just to clarify a comment you made earlier on the market share gains. If you exclude the Walmart business, did you gain share in Paints and stains for the year?

We would estimate, Dennis, that we held our own. I think that we may have seen a little dip early midyear just in terms of some of the new product introductions that came out, but we estimate in the fourth quarter, we gained. And as we look at it overall from a full year standpoint, we think we were basically about flat in terms of share. But having said that, as I mentioned, we've got some new products coming out as we go into 2012, and there should be some opportunity there. The weather, obviously, has been a little bit helpful. So we're in a real strong spot.

We'll move on to Keith Hughes, SunTrust.

Question in installed products. There was an attempt at a pretty substantial increase in Installation prices midyear last year. Did you take that price increase to your customers? And were you successful in getting it through?

Yes. In terms of price increases, Keith, we have been able, historically, to offset price increases, either through working with our suppliers or passing them along. So for us, that's generally been the way we've handled that and haven't had a lot of negative impact in terms of price/commodities.

And so I mean, we're talking double-digits they were talking about last year. Was that something you were able to push through?

Well, as I mentioned, we -- one way or another, we were able to offset price, yes.

Okay. And you gained share in that business in the fourth quarter. Is that -- what was the driver of the share gain?

Well, we actually -- the way we look at it, Keith, from a -- and again, we can get a pretty good feel for residential Installation. Some of the diversified products are a little bit tougher, but we believe that we were up in share in all 4 quarters last year. And the fourth quarter, we had the benefit of both share gains as well as the increase in lag starts. But we mentioned a year ago or so that when -- we had some challenges in terms of 2010 with share. We talked a little bit about that. As we worked our way through the year, talked a little bit about adding some resources. The guys have done a tremendous job in terms of organizational alignment, training programs for salespeople, discipline in terms of accountability, and we're starting to see the benefits of that. We simplified the business. We've gotten out of a lot of the diversified products that were a little bit more of a distraction. And retrofit's going well. The commercial side is going well, so we're very encouraged, even at these kind of levels, in terms of what might be possible going forward.

And final question on this. The year-over-year gain and the operating or loss or improvement in operating loss. Was Installation the primary driver for that, the negative 6% versus negative 19% in prior year?

Yes. I wouldn't necessarily say totally Installation. I mean, I think we got distribution in that segment. We've got retrofit. We've got commercial. So when you look at all 4 of those together, I think all 4 of those were hitting very well in the fourth quarter. The Installation would have been a bigger piece of it because of the increase in lag starts and the fact that we've increased share.

And it's just a bigger piece of the business, too. That's kind of...

Yes, exactly.

We'll go next to David Goldberg, UBS.

This is actually Michael Clark [ph] on for David Goldberg. You mention increased competition in Paint during the quarter. Was there any signs of that easing towards the latter part or even recently? Given that you plan to increase price, how are you thinking this is going to translate, especially in terms of market share?

Well, in terms of increased competition, what I did mention is that midyear, we started to see some products come out that were comparable to our Paint and Primer in One. We launched that about what? 2 years ago?

2010.

Yes, 2 years ago. And obviously, that has been a very positive impact on the marketplace. We saw some competitive product that claimed to have similar properties. And so there was a little bit of activity there and a little bit -- a fair amount of promotional activity. So that really took place more -- earlier in the year. And as I mentioned, we felt like -- that we might have been down a little bit in share but got that back in the fourth quarter and ended the year basically flat from that standpoint. And so from that position, we continue to be the #1 paint in the do-it-yourself market. In terms of pricing, going forward, I don't see that putting any -- putting us at a competitive disadvantage. Almost all of the competitors in that channel have raised prices over time. And that -- we don't control the retail side of that. I mean, we basically are implementing price increases to our channel partners, and that's across all customers and all products.

Okay. Also, I'm trying to understand the effect of the unfavorable mix in Plumbing, kind of what's driving that. Is it due more to increasing multifamily starts versus single-family? And kind of what efforts you're making to respond to this trend and what you think needs to happen to kind of reverse this unfavorable mix that's going on.

Yes. Michael, that's really related to -- primarily related to our Hansgrohe operation, which is headquartered in Germany and which is international in scope. And there's a couple of things that transpired there. One is that as they -- they originally were a shower systems manufacturer, and they have moved more into faucets over time. And so there is -- there's a lower margin on faucets than there are in shower systems. So as we continue to see more faucets as part of the mix, we have a little bit of mix-related impact. The other thing that they do is they have done a very nice job of penetrating new markets, typically in foreign locations, other countries, and oftentimes go in with what I'd kind of describe as entry-level products, which often are more of an opening-price-point type of situation. And from that standpoint, what we typically see is as we enter those markets -- and they've been very active there. As those markets mature and develop, we're able to place additional products in terms of -- and move up the scale a little bit, if you will, in terms of price points. So from that standpoint, it's really a little bit like a cost for future growth. And that's been going on now for some time. Having said that, Hansgrohe had a tremendous year last year. They had record sales. They also had very strong profitability, but most of that mix-related issue is in that particular business.

We'll have that from Josh Wilson, Raymond James.

Filling in for Sam Darkatsh this morning. Most of my questions have been answered, but I wanted to dig into the Paint business a little bit more. You said commodity inflation was the big issue, and we talked some about these price increases offsetting your commodity expectations. But does that mean you expect margins in 2012 for that segment to recover to 2010 levels? Or what will it -- how long will it take for that to happen?

I wouldn't necessarily want to predict margins in that segment. Obviously, as we get back to higher volumes, we've got high contribution margins. That will help us in that segment. But one of the things that is evident there is as we continue to grow in terms of our Paint initiatives, that tends to have a little lower margin. And so from our standpoint, our real focus has been on growth. We want to try to grow that segment. We're investing internationally. We're investing in the Pro. Both of those will probably have lower margins as we continue to develop those opportunities, but we think very, very attractive returns in terms of return on asset. So we may see, over time, some decline in absolute margin. But our thought would be that if we can grow our absolute profit dollars, get a good return on the assets, we'll continue to create value for our shareholders.

Okay. That's helpful. And then just to get an update on -- last I heard, I believe it was not your intent to hire a new COO. Is that still the case?

Yes. Yes, we did not replace that position. Okay, thank you. And thank all of you for joining us today. We appreciate your attendance. Thank you.

That concludes today's conference. Thank you for your participation.