Good morning, ladies and gentlemen and welcome to the Newell Rubbermaid Second Quarter 2010 Earnings Conference Call. [Operator Instructions] Today's call is being webcast live at newellrubbermaid.com on the Investor Relations home page under Events and Presentations. A slide presentation is available for download. A digital replay will be available two hours following the call at (888)203-1112 or (719)457-0820 for international callers. Please provide the confirmation code 7071403 to access the replay. I will now turn the call over to Nancy O'Donnell, Vice President of Investor Relations. Ms. O'Donnell, you may begin.

Good morning. Welcome to Newell Rubbermaid's quarterly conference call. Today's discussion will include forward-looking statements about our company's performance, I remind you that actual results may differ materially from expected results because of various factors. If you refer to our most recent 10-K, 10-Q and 8-K reports, you will find cautionary statements and risk factors which provide a more detailed explanation of the inherent limitations in such forward-looking statements. The company does not undertake and specifically disclaims any obligation to update any forward-looking statements that we make today. We further caution you that the company will make a number of references to non-GAAP and other financial measures in order to help you better understand the underlying performance of our business. You can find the GAAP to non-GAAP reconciliations in our earnings release and on the Investor Relations section of our website. With me today are Mr. Mark Ketchum, President and Chief Executive Officer of the company; and our Chief Financial Officer, Juan Figuereo. And I'll now hand it over to Mark.

Thank you, Nancy. Good morning, everyone and thank you for joining us today. I'm very pleased to share the results of another strong quarter with you. Newell Rubbermaid once again achieved core sales growth, strong gross margin expansion, and year-over-year normalized EPS growth. We're delivering consistently on the objectives that we outlined at the beginning of the year and reinforced at our May Analyst Day. Our strategy is working and we remain confident about our ability to meet our full-year financial targets. Second quarter core sales increased about 4% after adjusting for the $35 million of SAP-related prebuy reported in our Q1 call. Without this adjustment, core sales were up 1.5% in Q2. Second quarter sales trends are consistent with the full first half, with year-to-date core sales up 4.1%. We're pleased with this rate of growth, especially given that we're not getting much help from the economy. Across our portfolio, we continue to gain market share and new distribution on the strength of our new product introductions and robust advertising, marketing and sales support. Our innovations are winning with consumers and customers alike. We're also benefiting from the fact that many of our international markets, particularly those in the emerging economies, are growing significantly faster than the North American markets. We're making good inroads in Asia-Pacific and continue to build our business in Latin America, where some of our business units are posting strong double-digit growth. Our international sales this quarter grew 9% in local currency, similar to the first quarter. Next, our sales year-to-date are consistent with our full year outlook for both core sales and total sales. Gross margin expansion also continued this quarter, improving 220 basis points to 39.3% of sales on strong productivity and improved product mix. Operating margin was also healthy at 15% of…

Thank you, Mark. I'll start with a review of the income statement on a normalized earning basis. Net sales for the quarter were $1.5 billion, a slight decline versus the prior year. Core sales, which exclude the impact of foreign currency and product line exit, increased 1.5%. After adjusting for the previously reported first quarter prebuying by certain customers in anticipation of the April SAP go live at our Rubbermaid Commercial and Rubbermaid Consumer Business unit, we estimate that core sales increased 3.8% this quarter. While the impact from foreign currency in the quarter was nominal, product line exits reduced sales by approximately 1.9%. In North America, we gained share and increased sales base and net sales were slightly positive after adjusting for the SAP prebuying. Our International business continued to gain momentum, with reported net sales growth of 6% or just over 9%, excluding currency impact. On a year-to-date basis, we reported net sales of $2.8 billion, a 3.5% increase versus the year-ago period, while core sales increased 4.1%. We generated gross margin of $587 million or 39.3% of sales, an increase of over 200 basis points compared to the second quarter of 2009. Please note that although Q2 is typically our highest gross margin quarter for the year, the increase was a little higher than anticipated. The biggest contributors to the improvement were: Productivity gains resulting from a number of initiatives, including Project Acceleration; higher overhead absorption; and favorable product mix across all three operating segments, mainly driven by product innovation. Consistent with our strategy, these positive factors offset significant input cost inflation in the quarter. Year-to-date, we generated gross margin of $1.1 billion or 37.8% of sales, an increase of 160 basis points over the prior year. Productivity initiatives and favorable mix are driving our gross margin…

Thanks, Juan. Before we open it up to your questions, I want to reiterate that I'm feeling encouraged and confident about Newell Rubbermaid's business. There are certainly some challenges ahead of us. First, we have a lot of work to do to get our European profitability where it needs to be. Second, the economy remains difficult and retailer and consumer confidence is still somewhat uncertain. Yet, we've demonstrated the ability to grow core sales and expand gross margins in this environment. So despite these challenges, I believe our company is positioned to succeed. We've made dramatic progress throughout the organization in our ability to develop consumer insights, introduce innovative new products and bring these innovative new products to market in a commercially successful way. The business wins we've talked about, increased distribution, the market share gains, they're all evidence that our business model is working. Our actions demonstrate our confidence, and we're leveraging our gross margin expansion to grow the top line. We'll be spending more in the next six months than in the first half and more than a year ago to support our innovation and brand building. I think we're positioned as well as we've ever been to succeed and I'm excited about the opportunities ahead of us. Operator, at this point, I'd ask you to queue up the questions.

[Operator Instructions] And we'll take our first question from Lauren Lieberman at Barclays Capital.

Could you talk a little bit -- I know it's still early on back-to-school in terms of what consumption will be, but some of the retailers have been talking about expectations for a more promotional environment. So how much of that is sort of retailers competing with each other versus trying to stimulate demand and what role do you think yourselves and manufacturers will play in funding that promotional activity?

We're seeing exactly what you just described. We are seeing a stronger interest and plan that support that high-level promotional activity and I think they're doing it for both the reasons that you suggested. They're doing it to compete with each other, as well as to try and stimulate to getting consumers back in this or getting foot traffic up. We've participated in some of those promotions, but we also have a very strong both off-the-shelf program and a program in support of our new items that we launched. And as we said earlier, it really is too early to tell how that's going and we won't get any valid point-of-sale data that will really give us a good reading for another month or so.

And what are you seeing in terms of commercial demand in Office Products at this point? Is there sort of restocking in offices yet on pens and that sort of stuff?

Actually, the Commercial part of the business has been the stronger part compared to Retail, so we are seeing a little bit more of a rebound in Commercial that's led the Retail consumer.

And we'll take our next question from Bill Chappell with SunTrust.

Just, first, trying to understand your commentary on the gross margin. Just leading it last year, there didn't seem to be quite as much seasonality between kind of 2Q, 3Q and 4Q on gross margin. I understand there is some new -- be it freight or shipping or other things that are impacting it, but just trying to reconcile how big of a sequential drop you expect?

Well, let me start and then I'll ask Juan to add some color to it as well. First of all, I think you should not look at 2009 as indicative of our annual pattern because everybody knows 2009 was a pretty weird year. But if you look at our historical pattern from '08, '07 and so on, Q2 usually is, always is our strongest gross margin quarter, and that was the case and will be the case again this year. Juan, do you want to add a little commentary about what we see in the second half?

Sure. First, let me say that in the first quarter, our inventories are typically low. In the second quarter, we build inventories and that leads to more overhead absorption. This quarter was particularly strong, the second quarter. So in the second half, we expect to continue to see the productivity gains, but now lower, and we are facing, as we indicated, some headwinds. We're particularly concerned about China, where there's labor inflation and also, ocean freights in the second half of the year. Now having said that, we still expect to have positive expansion. So we're still on track and we said we feel comfortable at the top of the range. So still a positive story, just not as positive as the first half.

And then just on top line, did you say you expect all three businesses to have top line growth this year? Just trying to understand the Home & Family, and I think there was an original thought that Home & Family could do mid single-digit growth in the second half. Didn't know if you are still comfortable with that.

Let me talk a little bit about Home & Family. So first of all, to answer your first question, yes, we expect positive growth from all three of our business segments. But let me add some color about Home & Family because I suspect there are other questions regarding that business. So core sales in the first half were negative, approximately a point. What I'd tell you about this business is a couple of things, especially compared to our other businesses. It takes a while to build momentum, especially in a flat economy, but we've got some good momentum, and I'll describe what some of those initiatives are going to affect the second half are in a second. The other thing I'd tell you is, compared to our other two businesses, Office Products and Tools, Hardware & Commercial products benefit more from sales outside the U.S., which we've talked about before as the growth rates x U.S. or in the economies x U.S., are stronger, the Home & Family business has about 85% of its business in North America. The other businesses have a third to a half of their business outside the U.S., so they get more benefit from where the economies are more robust. And second, Office Products and Tools, Hardware & Commercial products experienced a bigger downturn in 2009. So frankly, there was more pent-up demand in the first half of this year in those businesses. So both of those businesses were helped a little bit by that. Now let me tell you why I'm really confident about our second half in Home & Family, where we expect strong core sales growth. Culinary, I'll start there. Culinary had a great year last year, Will. They're not stopping behind what they did with Unison last year. They got…

And I assume that's why you're expecting a suddenly higher tax rate in 3Q and 4Q, is just a mix more towards North America?

Yes, that would be right.

We'll take our next question from Budd Bugatch at Raymond James.

This is actually Chad filling in for Budd. I think initially you had told us that you expected SG&A investment in the first half to be in the $40 million to $50 million range. Could you share with us what that ended up being and maybe quantify what you're expecting for the second half?

We came in, I would say, more or less as we expected. There is some shifting always of programs, some programs you end up spending a little later. But we came just a little south of $50 million, more of $46 million...

Yes, $46 million year-over-year increase.

Okay. And could you give us the same number, I guess the expected increase for the second half?

We don't want to quote a specific number, Chad, but we are, as I said, what you can expect is, that we'll spend both more than we did in the first half in total than the second half, as well as more on a year-over-year basis. And obviously, some of that will depend on how the volumes progress. But that's one of the reasons that we're confident that we can drive growth in the second half despite the fact that we're not getting any help from the economy, is that we put ourselves a little ahead of the game on gross margins in the first half, gave ourselves a little more spending room, if you will, to make sure that we can invest and invest as we need to, to support these great innovations. We're really pleased with the innovations we have and, by gosh, we're going to make them succeed.

To summarize out for you with numbers just before we move on, you can expect, as we said, 25% of net sales full year. So we're going to spend to that level, and you can expect it to come at about even in the second half.

As we think about kind of the...

Quarters

Even across the two quarters.

As we think about it by segment, it sounds like there's a lot of new product activity in Home & Family. Will that have a little bit more of a waiting in that spend or how do we think about the segments?

No, I don't think so. While I didn't talk about the other businesses, they've got a lot of innovation going on as well. So we've got several new platforms that we're continuing to support in our Rubbermaid Commercial business. We're supporting the mimio classroom in a big way. We're supporting that with a lot of additional salespeople and developing promotions and tests with the school systems so we can get that product really going. We've got the innovations that I described in Sharpie. We've got a couple of innovations on Paper Mate. We're continuing to invest in the fixturing and furniture on Fine Writing. Our Tools & Hardware business has new reciprocating saws and a new hole saw later in the quarter. And so we really have initiatives that span all the businesses. And I think that the spending really will -- the increased spending in the second half will come from all three of the business segments.

Okay. You talked about some cost pressures in China and cost pressures in freight in the second half. How are you thinking about specifically commodity costs going into the second half? Will the headwind moderate? How do you expect that to play out?

In the second half, we're expecting that commodity costs will moderate somewhat and in some cases, we have less exposure because of the way we buy. But the important thing is, that we still expect to offset any cost inflation with productivity and mix. We have a good track record of doing that and we feel comfortable about the second half.

We'll take our next question from Joe Altobello with Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc.: First question is, I wanted to go back to the more constructive sales outlook you guys have now for 2010. The more constructive sales outlook for 2010, how much of that was better than expected sales in the second quarter? And how much of that is better visibility into your businesses in the back half of the year because you did say earlier in the call, that you're not expecting any help in the economy, but now, your top line outlook is better than it was three months ago?

Well, again, the top line outlook in total is about the same. And we're expecting less help from the economy and more help from the momentum, what we're going to generate ourselves by driving core sales. So I think that's the way to think about it. So we've left the guidance probably still fairly broad in terms of the top line. We're still calling it low to mid, whereas we're confident that our core sales will be mid and that's an increase versus our previous guidance for our core sales. The other thing, from that core sales, you'll have the negative impact of product line exits, although that'll moderate a little bit in the second half. And then, of course, currency, we think it switches from a help in the first half to a little bit of a hurt in the second half.

Let me add to that, that there's a fairly long list of initiatives. I think Mark ran through a lot of them and so far, our success rate has been fairly encouraging. The stuff that we have launched so far is doing well. So we're looking at that list and knowing that we're investing behind it, we feel comfortable. We feel good about it. Joseph Altobello - Oppenheimer & Co. Inc.: And if I could go back to the earlier comment you made about a rebound in some of your commercial industrial markets around the world, it sounded like the U.S. was still sort of trailing the rest of the world. Are you seeing any rebound in the U.S. or is that mostly international markets?

It's mostly international markets. Again, the U.S. commercial investor markets have also rebounded a little bit, but not as much as international. International, in total, is leading the way. Everything's stronger internationally than it is in the U.S. and Western Europe, and that's true pretty much for all segments.

And we'll take our next question from Jason Gere at RBC Capital Markets.

Just on the same line, I guess, thinking about international and Latin America. I know you did talk at your Analyst Day about the growth in emerging markets. I'm just wondering, in particular, can you talk maybe about future roles of joint ventures? I know you're doing one with Avon, with the Rubbermaid business. So I was just wondering if you could put that into context. And then just also, really, as you look maybe three years out, kind of the breakdown of your sales growth between international growth versus market share gains in North America and category growth there?

Let me start with the second one first. We're seeing this year and what we expect to see going forward for the foreseeable future is significantly stronger growth in our international markets. This year we're still seeing close to 10% growth in those markets on a constant currency basis, and I think that's the order of magnitude that we would hope to achieve in future years. And of course, that compares with the numbers that we've talked in total growth would imply that the U.S. business would be growing low to mid-single digits. And in many cases, being category leaders, a lot of that's going to be share growth. It's not going to be category growth as much as it is going to be share growth. So that's what we're counting on in the U.S. markets. Now to your question about the partnerships, what we're looking for is, we're looking for these kinds of partnerships that enhance our ability. You mentioned Avon, which is one of the ones, and by the way, that's a test. And I say that only to make sure everybody understands that, that's not a long-term commitment yet. It would have to be one that was successful for both Avon and us for it to continue, and I'm not yet sure if it's strategic or tactical for Avon. So time will tell on that one. But I'd also tell you that's just one of several options that we're looking at to try and expand our business on Rubbermaid food storage products in Brazil. I'll reference another one that I'd mentioned previously and that's our 3M relationship with our DYMO business. 3M has an extensive sales force. I think it's close to 1,000 sales representatives that call on the electrical construction channel. They had much better coverage in that channel than we did and we formed a partnership with them to sell our DYMO Industrial labeling equipment through their sales force, and it's off to a great start. So those are the kinds of examples that we're looking for, is how can we leverage the strength of other non-competitors in some of these other markets around the world to accelerate some of the great products that we have because, frankly, our infrastructure outside the U.S. is the thing that will take the longest to build up. And when you can build it up through partnerships, you can usually go faster.

Okay. And just to follow on, I guess, within just international, and I apologize if you did mention this earlier on the call, with Venezuela, can you talk about how the volume trends were during the quarter versus your expectations? And then just in the back half of the year, with the EPS impact, is that worse than you anticipated in line, if you can give any color around that?

Let me take a stab at that, Mark. First, on the second part of the question, the EPS impact is just as we expected, as we disclosed earlier this year, so that's playing out as we expected. The change in the accounting and the currency, that was better than we anticipated. And we don't know if that's going to hold or not, so we don't know what's going to happen in the market. So in terms of trends, on a local currency basis, the business is growing and has been growing, but it has been difficult to access foreign exchange to buy raw material, so we're beginning to be more concerned about the second half of the year. But again, this will be within the range that we disclosed in terms of EPS impact expectation.

And we'll take our next question from Chris Ferrara at Bank of America.

Not to jump the gun on something that you're saying is coming in 2012, but the European restructuring savings, I guess, how much, if any, of the savings do you think could possibly hit 2011 since it seems like a lot of work is being done there? And how do you think about what the reinvestment rate would be of something like that? Because obviously, $0.17 to $0.21 is a big proportion of your total EPS. Do you view that as a way to pile a lot more strategic SG&A behind the business?

Mark, let me take a stab at that. First, we are really happy with the progress that we're making in Europe, and we think that what we're doing is absolutely the right thing. We're, in fact, doing what other companies have done ahead of us. So it's a proven model and that gives us confidence. It's going to allow us to invest, so that's a good point. Chris, it's going to allow us to invest to grow the business and that's the part of what makes it more exciting, really, for us; that we're going to have a better, leaner structure with the ability to invest higher. In terms of the savings, some of them, and Mark mentioned that in his remarks, they start to come in slowly, particularly the process improvement savings after the leadership changes that were made earlier in the year. And then by 2011, some of the benefits will begin to accrue, some of the financial benefits. However, we think the full impact of the amount that we disclosed in the release will be after 2011, so think about 2012.

Just following up, do you think that a certain portion of that will be reinvested? Can you give us a rough idea of how you're thinking about that? What proportion of that savings would be reinvested?

I guess I don't think we could give you a number on that today. I mean, what I'd tell you today is, that our investment rates today are not woefully short in terms of Europe, but we just haven't put the focus yet. We haven't put the focus on investing in the right kinds of products and making investments there as aggressively as we do elsewhere because it's just not as profitable to do so. So this really is just a key to making sure that this gets the focus that it deserves, but I don't have a specific number to give you in terms of reinvestment rate.

Okay. And then just, I guess we've talked a lot and you guys have talked a lot over the last year and, more than that, on increasing in strategic SG&A, and I guess this may be hard to pull together for the whole company, but competitively, how do you think about your spending rate relative to that of your peers? Do you think that your, say, for instance, your back half increase in strategic SG&A, will that further widen the gap between what you're doing and what your competitors in all of your individual categories are doing? Or do you actually see stepped up innovation and stepped up spending in some of the specific categories in which you compete from your competitors?

We're not really seeing that kind of stepped up spending from our competitors, so I think this will continue to widen the gap. And as we talked at Analyst Day, eventually, we think that this 6%-plus average that we spend on brand building support today, that will go to 8%. We think that the additional strategic spending that we spend, that's particularly critical to some of our commercial and industrial businesses; that, that will go from 6% to 7% or so. And therefore, in both cases, we think that what we're doing is widening the gap versus our key competitors.

And then I guess one other small one, did you guys see a material geographic margin mix drag just because the growth was so heavily weighted toward international?

What do you mean?

In other words, did you see margins get dragged down a little bit this quarter specifically because you grew faster in lower margin markets?

Margins actually were helped a little by the mix this quarter.

Most of our gross margins outside the U.S. are pretty healthy. I think with the exception of sometimes what it takes to invest in a truly emerging market, most of our gross margins in our other regions around the world are healthy.

And we'll take our next question from Bill Schmitz with Deutsche Bank.

Two things. Just on the sort of 15% operating margin target, is that changed with the European restructuring savings?

No, that's part of getting there.

That's part of. Because it wasn't there before, though. So does that mean that things have changed or do you guys haven't...

Maybe It wasn't disclosed to you before. It was always in our plans. The 10% minimum operating margin was always there. So while the European Transformation Plan that we announced wasn't always there, the expectation that we're going to have to find a way to 10% or better operating margins in Europe was always part of our ongoing plan, and that was part of getting to 15% as a company.

Okay. As you look at the strategic spending, is there a point in time where you're spending at the right levels? I imagine you're still kind of in catch-up mode. So with a little bit of point in time, will that sort of stabilize, then maybe you can start to leverage some of the overhead costs a little better?

I think that will be the case. And by the way, I don't think we're in catch-up mode because we're, frankly, accelerating to go to widen the gap as was discussed a few moments ago. So I think we're getting maybe caught up with our potential for what we could and should be investing behind an innovation and consumer-focused brand-building model, but we're not behind any of our competitors. What we're doing is trying to widen the gap and make that a true competitive advantage. But yes, at some point in time, it levels off, it kind of maintains as a percent of sales. And you use your sales lift to generate the marketing dollars you need to continue growing your top line, and you're able to do that with the same structural costs and therefore, it becomes leveraged with that higher volume.

I would add to that, Bill, that it's hard to compare apples-to-apples in terms of spending levels. I think the way you look at it is, one is increasing so we are investing more in those, in brand building than we were in the past. And you look at the effectiveness. I know that's hard, also to quantify, but the fact that we're gaining share, more space with the customers and so far, that we feel that we're winning, that tells you that the effectiveness level of the spend is high.

When you talk about strategic spending, I assume you exclude the gross to net stuff. Is there any number that you can give us on what the total sort of brand-building spending was year over year? I think that $46 million -- I imagine the trade promotion stuff is not included in there?

No. Trade promotion will not be included in there. I think we did remark earlier that the increase in the first half, roughly $60 million -- about 2/3 of that was spent on brand building and other strategic. So those two buckets that I've talked about before, and as you recall from Analyst Day, those two buckets together are a little over half of our total SG&A spend.

But how about in terms of the promo, was there a big uptick in gross to net in the first half of the year or even in the quarter? Because I know Lauren asked that question, which is happening everywhere, the trades asking for promo and less ad dollars.

Our net pricing is up slightly, Bill, so the answer to that would be no.

And I've actually heard talk about some changes in car seat laws in Brazil and China. Where do you guys stand in those markets and are you positioned to take advantage of some of those changes?

I think we're getting ourselves positioned. I wish we were a little bit further ahead of that game, but I think we're positioned. We've entered into a distribution arrangement in Brazil and we like the partner that we've chosen, and we like the initial results. That, of course, is the first one. So they have a law, they haven't started enforcing the law yet. Until they start enforcing it, our experience looking back many, many years to when car seat laws went into effect in other parts of the world, that there's usually a lag between they go into effect, when they're enforced and when consumers really say, "Okay, got to go do this." So there's a little lag there, but the law exists and someday, they'll enforce it. We now are partnered up with a distributor partner, and I think we'll be able to catch one of the early trains there. China still doesn't have such a law and there's nothing pending, so there's been talk about one coming, but still we haven't seen it. So they're still further behind in terms of that, and yet we're about at the same point and the same place there as we are in Brazil. In other words, we're developing distributor partners and starting to get products that are compliant with their applicable safety laws on the store shelf there.

Does the Graco brand mean anything in Brazil or China?

Not yet because it hasn't really existed before.

And we'll take our last question today from Linda Bolton Weiser with Caris & Company. Linda Weiser - Caris & Company: Can you talk a little bit more about the retail environment, specifically about how retailers are thinking about inventory levels? Are they in anticipation of slowdown? Are they really actually trying to order less than consumption or are they kind of ordering in line with consumption? Can you just comment on that and any differences among different channels or categories of products?

I think they see inventory levels that they have today as roughly where they want them to be. They took the same actions, I think, that we took and many others took over the 2008 and 2009 crisis to get inventories to a lower level, a lower sustainable level. And I think where they are now, they probably like them. So I would expect them to try and order consistent with consumption. So as they see the POS coming in, they'll reorder. But I don't think they'll either get ahead of themselves nor do I anticipate that they'll try and pull back.

I think in this environment everybody's watching their inventory carefully. Retailers are, we are, so everybody's being careful. Linda Weiser - Caris & Company: Okay. Just as you think about your businesses, I mean, you're giving lots of examples of growth areas where you've got innovation in new products. Is there, and not to rain on that parade, but is there any kind of product categories or areas where there are sort of declines and you're having trouble seeing the way to innovation? And could there be any possible, still, things that will become problems later on, that you still might have to pare out later? Or are you really sure of what you have at this point?

We feel very good about our portfolio in total. As we've described at Analyst Day, there's always fine tuning that we should and will do, but by and large, we like the portfolio where it is. We're experienced. We see opportunities to grow in all of our businesses and the reason that we took our guidance up for core growth in the second half is because of the strength of that innovation. And recall, that's up from 4% in the first half. So sometimes it's hard to see through the numbers with some of the other moving parts, but we had roughly 4% core growth from the first half, and we've now told you that we expect it to be stronger in the second half. And it's is going to be stronger in the heels of that innovation, and it's broad based. Linda Weiser - Caris & Company: Okay. And can you remind us which quarter the most unfavorable comparison is for the raw materials?

The raw materials, the biggest impact was from resin in the quarter. Linda Weiser - Caris & Company: Right. But is the comparison the worse, was it in second quarter or will it be in third quarter?

The worse will be, and what we expect is, the worst will be in the second quarter. So far, it's been the highest raw material inflation that we have experienced. We hope and expect it'll be the worst for the year.