Good morning, and welcome to Newell Rubbermaid's First Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded. A live webcast of this call is available at newellrubbermaid.com on the Investor Relations homepage, under Events and Presentations. A slide presentation is also available for download. I will now turn the call over to Nancy O'Donnell, Vice President of Investor Relations. Ms. O'Donnell, you may begin.

Great, thanks. Welcome, everyone, and thank you for joining Newell Rubbermaid's first quarter earnings call. On the call with me today are Mike Polk, President and Chief Executive Officer; and Juan Figuereo, Chief Financial Officer. Before we begin, I'd like to remind you that our discussion this morning includes forward-looking statements. Actual results or outcomes could differ materially from management's current expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. Please review the cautionary statements in the earnings release and our most recent 10-K. In addition during the call today, we will refer to certain non-GAAP or adjusted financial measures including, but not limited to, normalized operating margin and normalized earnings per share. We present this non-GAAP information for the purpose of enabling investors to better understand and analyze our ongoing results of operations. For further information on reconciliations to comparable financial measures under GAAP, please refer to our earnings release and the accompanying supplemental information available on the Investor Relations area of our website, as well as our filings with the SEC. With that, let me turn it over to Mike Polk for his comments.

Thank you, Nancy. Good morning, everyone, and thanks for joining our Q1 2012 results call. Our objective today is twofold: First, we'll review our first quarter results and share some observations about our performance; second, we'll discuss the progress we are making driving our growth game plan into action. Let's get into the results. We posted a solid set of Q1 numbers that represent the positives delivering full year results in line with our guidance. Importantly, we delivered these results in the context of a significant change agenda. We've aligned our organization around the new growth game plan, executed the European transformation SAP EPC cutover, driven Project Renewal into action, and delivered our third consecutive quarter of consistent results, getting the business back into a predictable cadence of delivery. I'm proud of the team. They've been fully engaged and continue to demonstrate their ability to drive delivery and drive change at the same time. Net sales growth this quarter was a very solid 4.6%. Core sales growth was 5.2%. We estimate that about $28 million in net sales were pulled forward from Q2 into Q1, associated with SAP implementation in Europe. Adjusting for this pre-buy, core sales would have been up 2.9%. The 2.9% underlying core sales growth is stronger than we anticipated when we guided the full year at the end of January. As you recall, we thought we'd be in the lower end of the 2% to 3% full year guidance range in the first half of 2012, as a result of less merchandising support in Western Europe during the SAP transition window and operational challenges on Décor. This planned slowdown was more than offset in Q1 by strong performance on our Professional and Baby businesses. Q1 normalized EPS was $0.33, a year-over-year improvement of 14%, and $0.02…

Thanks, Mike. And good morning, everyone. Starting with our Q1 results, our net sales of $1.3 billion represent an underlying core sales growth of 5.2%, or 2.9% excluding the impact of the EMEA SAP pre-buy. In North America, net sales grew 1.1% and core sales grew 1.3%, led by very strong growth in our Professional and Baby & Parenting segments. The Consumer segment North American core sales declined year-over-year due to the negative impact of the Décor business. Outside North America, net sales grew 13.6% or 15.4% excluding ForEx. Adjusting for the SAP pre-buy, international core sales grew by almost 7%. Both Latin America and APAC, which are priority growth markets for us, delivered double-digit core sales growth with Latin America increasing 10.9% and APAC increasing an impressive 24.6%. Although EMEA's reported core sales growth was 12.7%, after adjusting for the impact of the SAP pre-buy, the region showed a core sales decline of approximately 3% mainly due to the continuing tough macro environment in Western Europe. Gross margin was 38.3%, a better-than-expected 20 basis point improvement over a tough year-ago comparison. Pricing, productivity and mix more than offset input cost inflation. Versus the prior year, pricing contributed 100 basis points to the gross margin improvement, while inflation had a 130 basis point adverse impact. SG&A spend increased $18 million compared with the prior year and on a percentage of sales basis increased 20 basis point to 27.3%. The main driver of the increase was higher brand building and strategic spend, as we continued to invest in demand creation initiatives in focused growth areas. The Newell Professional segment, where we are showing the strongest growth trends, was one of these focus areas. And in our Consumer segment, support for the Paper Mate InkJoy launch and geographic expansion in the Writing…

Thanks, Juan. Let me now update you on the growth game plan we unveiled at CAGNY subsequent to our January earnings call. The growth game plan is designed to sharpen our choices and strengthen our capabilities for accelerated performance in the marketplace. At the heart of the growth game plan is a belief in growth as our primary source of long term value creation. There are a lot of big areas in the growth game plan. It's a transformation strategy that will direct our efforts for the next several years, and we've already begun putting the plan into action. The first step was to simplify our business. We've already done this through Project Renewal, simplifying our design around 2 fields of play, Consumer and Professional. Second, we need to make sharper portfolio choices in order to fuel accelerated growth on our brands and businesses that have the greatest right to win. And we need to pivot a portion of our portfolio to go where the growth is happening in the world, the emerging markets. We have done this by aligning our businesses against 3 different portfolio roles: win bigger, win where we are, and incubate for growth. Like creating this where-to-play framework, we can now be more single-minded about deploying resources to the higher growth opportunities, while tasking the slower growth businesses to win more effectively within their current geographic footprints. We will expect all businesses to grow, but in different ways and at different rates. With the clarity of the new growth game plan, our efforts and resources can be much better aligned with our growth platforms. You are beginning to see some of the savings associated with simplification being reinvested in increased selling systems in Latin America on Professional and Writing, as well as increased brand building investment behind new product launches, like Paper Mate InkJoy. We've been pushing hard to pivot the organization and drive this new strategy into action. There is much more to share and much more to do. I invite you to join us at our upcoming Investor Day on May 24. We'll take the time to give you a clearer sense for the growth game plan, and the actions we are taking to accelerate our performance. With that, let me open things up for questions.

[Operator Instructions] Your first question comes from Chris Ferrara with Bank of America.

I guess, I was wondering if you can just talk a little bit about the retail channel in the U.S. Obviously, good January and February numbers, maybe less so in March. But particularly, I guess in the DIY businesses for you guys and those channels, how have the channels progressed? What's your view there? How have your share positions progressed in those markets?

Look, we feel good about the underlying consumption momentum in our business. You see that in our share results on many of our businesses. Not all, but most. So we see good share progression, and we see decent category growth rates as well. So we feel pretty good about the underlying conditions in the U.S. at least. Europe's a different story, but the U.S. looks to be a more interesting environment than it was a year ago. Now some of that -- some of those conditions and some of the growth specific to our Professional businesses may in fact be an artifact of perhaps a little bit of an earlier spring in half the country, but in general, conditions look pretty good. There are a number of our retail partners who are changing their merchandising strategies and approaches. Those are things that we don't control, we have to adapt to. And we do that in partnership with them, and those are choices they make in the context of their strategic agenda. And we see that happening in a couple of places, but no more so than you would normally see. And our challenge, our leaders have to adapt to that environment and figure out how to adapt their merchandising programs and their marketing programs to that reality. But as I said, in general, the environment's not -- at least looking a little bit more favorable than it has historically. Historically, being the last 6 quarters or so.

That's helpful. And I guess since you brought it up, can you talk a little bit about -- a little more detail on what you were just talking about some changes in how the retailers are doing things? What do you mean by that, I guess? And what sort of changes are you guys going to have to adapt to, do you think?

Well, there's some that are happening in a way that work for us and some that are happening in a way that create some uncertainty, but are important for the retailers. So the most probably profound change that's out there that we look at is J.C. Penney's change in strategy, which for many of our businesses has an impact on how they merchandise. It's not a bad thing. It actually has the potential to be a good thing. But as retailers transition from one point of view to another, you need to move aggressively and be in touch with what it is they are trying to accomplish. Of course, we have to bring our agenda to life through their strategic framework. I always say that, we want to go to market in the language of the customer and in the context of their strategies. And our agenda needs to sync up and be amplified in the context of what they are doing. And that's probably the most significant one at the moment. Obviously, a year ago, Wal-Mart went through a change of similar ilk going back to some of the basics that had made them such a strong partner for us. And so this always happens. It's not unique to the window we're in. And that's one of the powers of the new sales structure we're putting in place, will be to have a single voice accountable for those customers and to be able to anticipate some of those changes such that we can create the most commercial value in the context of their business agenda.

That's helpful. And I guess one last follow-up on that one. Is there -- has there been a near-term impact on your sales or your share or your positioning at retail in general? Or do you project a near-term impact? And can you talk about that a little bit, which direction that would be in?

Well, our new selling structure is going to create value for us over time. I talked about 2 jobs to be done in the company: one, to create more commercial value out of what we're bringing to market in the markets where we are; and two, extending our geographic footprint in a disciplined way to the higher growth emerging markets. The change in selling structure we put in place is designed to enhance and develop and deliver more commercial value in the markets where we are. So I expect that structural change to deliver more growth for us over time, and the beautiful thing about it is it comes at a lower cost as a percent of sales, but it elevates our conversation from a transactional conversation with each other to a more strategic conversation, by putting one person and one team accountable for the development of our joint businesses. So I expect positive things to happen over time. We've just transitioned to that structure in Q1, and so there's nothing in our numbers today that show any benefit from that choice, but the future will.

Your next question comes from Connie Maneaty with BMO Capital.

On the Professional and Baby businesses, excluding the contribution from SAP, the pre-buy. Can you give us a sense of the contribution -- I mean, is it consumption or retailers stocking up on inventory that was driving the sales of those businesses excluding SAP?

Sure. So it's a good question. Let me start with Baby because I think that's the one that's sort of -- is most eye-opening in terms of the trend shift and there's a number of things going on in that number, and I think it's worth sharing those things with you so that you can extrapolate forward as you look at how you view our business. Let me give you the headline first on the full year. We expect to deliver growth on Baby in 2012. And as you recall, I said that we were attempting last year to stabilize the business in the second half of 2011, return it to growth in 2012, and that agenda is right on track. Importantly, you should not extrapolate Q1's growth rate to the full year, about half of the growth is related to timing differences in selling year-over-year, specifically the absence of an inventory liquidation in the prior year period. So about half of that is a onetime event that we always had in our numbers because we knew it was going to happen. That's not truly underlying performance. The underlying performance, though, has strengthened over the last 4 to 6 months. We've got low to mid single-digit POS growth in Graco in the U.S., and we've got strong double-digit growth on Aprica in Asia. And that's partially offset by continued declines in Europe. And what we're focused on is sustaining the POS growth in the U.S. in partnership with our retailers. We are looking to extend the tremendous Aprica share and revenue growth we've experienced over the last 4 quarters in Asia. However, that will moderate as we lap the step up. That growth rate will moderate as we lap the step up in Aprica's performance from last Q2. Because this…

That was very helpful. Just one follow-up. You've spoken in the past about an increase in the dividend. I was wondering if there was any better sense of the timing of that event.

Yes, of course, as you recall, we've said, and we're committed to making our payout ratios -- our dividend payout ratios more competitive. We said we want to drive our dividend payout ratios to the 30% to 35% range. And today, we're sitting right around 20%, slightly below. And so obviously, we need to continue to progress against that commitment. This is, of course, the board's call, not management's call, but there are -- there's nothing really that I can see that would get in the way of us taking a step toward that objective that we've set in the near term. And I was pleased with the cash delivery in the first quarter. We're working hard on working capital to drive -- to improve our cash conversion cycle, and so -- and we've got an eye towards where our leverage metrics will be at the end of 2012. So I've said previously that our ability to take a step toward that dividend payout ratio is not dependent on any unique commitment with respect to leverage metrics or really, there's nothing in the way from an earnings perspective of us being able to take a step in that direction. So it's simply a matter of timing, and I'm pleased with Q1. I'm pleased with the gross margin delivery in Q1, which gives us breathing room to be able to make that choice and recommendation to the board. And when the board decides that they're comfortable, we will announce a stat.

Your next question comes from Bill Schmitz with Deutsche Bank.

Is there a way to try to figure out what the POS growth was in the quarter relative to the 2.9% organic x the SAP pre-buy?

We don't look at POS in aggregate. I think POS is slightly ahead of it, and I just -- I make that judgment ahead of the growth in our markets. I make that judgment just based on the share data that I look at. We saw the GDP growth this morning and that wasn't particularly exciting. And so 2.9% looks slightly better than that as well. So look, we're building share and our market growth is improving versus where it's been. Is our POS growth ahead of the 2.9% underlying? I actually -- we don't look at it that way. In 1 or 2 of the businesses where we do look at it, it is. But we don't look at it across the total business.

Got you. And then, Juan, just on the tax rate, the 27%. I thought we were going to have an inflection once the EPC came up, which happened in April. So is it fair to say that, that's probably a conservative estimate on the tax rate? And then also if there's any cash flow implications of doing that?

The 27% for the balance of the year or 26% for the full year does reflect the benefit of EPC beginning after -- in the second half of the year, really beginning in May. As you will recall, we had a big benefit in Q4 from the EPC legal entity structuring. So the fact that were able to maintain flat rate means that there's a benefit coming through. We estimate about $0.03 per share will be the tax benefits of EPC this year.

Okay. Good. That's helpful. And then just in terms of the commodity tenor as the year progresses, I think you said 130 basis points for the first quarter. How does that kind of look as the year progresses?

The inflation outlook will be slightly less than in the first quarter for the rest of the year, but it should continue in the 100 to 150 basis points range.

Okay. And then, I'm going to keep going if you don't mind. $9 million, I guess, of renewal savings in the quarter, and I think you're going to exit the year at a $100 million. So also, kind of what's the tenor of the savings coming through?

Look, the saving are coming through exactly as we expected them to, and we see the big step up as we move through Q2 into Q3. We some more things that have to happen. We've announced a big series of changes, but the value of the savings don't flow through into the second half. So you got the manufacturing changes, you've got distribution network changes, where all of that's been announced and people know, but the physical shifts don't occur and have a material impact into the second half of the year. So we're right on track with renewal, where we expected to be.

Got you. And then the 90 basis points from strategic spending? Can you break that down a little bit more granularly, like where that money went? And then, is that probably the right number for the full year?

We'll see on the full year. I got to watch the gross margin delivery. So that's why I didn't want to guide SG&A specifically. But the 90 basis points in strategic spending is broken into both A&P increases and selling system increases. The A&P increase is focused on our Writing business because, as you recall, we launched InkJoy at the end of last year, sort of counter seasonally. And we've supported it with good marketing support in the first quarter, which is what's driving our share performance and the nice step up in category growth rates, and the overall revenue performance in Writing, as well as the Parker Ingenuity launch in many countries around the world. So the A&P is focused in the Writing businesses, and the selling systems are supporting the Professional businesses, specifically our Tools businesses in Latin America, and also Rubbermaid Medical in the U.S. And so those are the 2 places where the money has flowed. Of course, it's been funded by an 80 basis point reduction in structural SG&A, which is in part driven by renewal and 20 basis points improvement, a little bit more than 20 basis point improvement in gross margins.

Got you. And then going forward, I think you're going to add bodies also. So you have the systems in place in the selling side, so...

Yes, Bill, when I say systems, I'm talking people.

Okay, got you.

It's feet on the street in Latin America and in Rubbermaid Medical systems.

Your next question comes from Jason Gere with RBC Capital Markets.

Just a couple of questions. One, going back to Europe on that Baby side and with Tom Brown coming over. Can you talk about how you guys are evaluating, like country by country? I know that Germany and the U.K. are attractive markets. But certainly, right now, I'm just wondering how you're evaluating where you want to play and maybe where you might decide to exit, if possible?

Well, look, I mean, we do look at our business in the way that you're describing it. So we look at GBU by country cell and without getting too specific, we make judgments about potential and competitive landscape and those drive how we prioritize which cells we'll bet on and which ones we'll defer betting on to a later date. And Tom is working through that with Christie for Europe, as well as Christie looking at that around the rest of the world. So obviously, 2 cells that are of critical importance to us. So the U.S. and Japan in our Baby business. And you've hit the 2 major cells in Europe, U.K. and Germany. And so, we focus on -- we'll focus our investments against those opportunities, and we'll look at the other opportunities and try to hold those businesses together in the most efficiently, while we're placing investment bets on the opportunity geographies. But without getting -- Jason, I don't want to get too specific on where we're going to do what. We have some pretty active competitors that I'm sure are listening to this call, and that would give them all the information they needed to do their roadmapping.

Okay. Fair enough. And then I guess the second question is really about One Newell. And I guess just wanted to kind of draw upon your experience with One Unilever, like how long did it take to kind of see the returns come through? Maybe just any -- I know after CAGNY, I think you were meeting with some of the retailers and just the reception that you've gotten so far with this program. So just maybe if you could just draw on your past a little bit and how quickly you think that, that could turn around? Again, understanding it's different categories but the same concept.

Look, I think we're going to see a nice benefit from this. When I talk about increasing the commercial value of the things we're bringing to market, the way we're going to do that is by being more selective and less democratic in how we allocate resources and by strengthening our selling capabilities in the markets where we are. And so this change allows us to elevate the conversation from the buying point, a transactional level, to a more strategic conversation. So I personally already participated in top to top meetings with -- in the homes -- without getting specific, in the home center channel, in the office products channel, in the mass merchant channel, and we will continue to dialogue at that level to create ambitious growth-oriented plans from our businesses. And what I said in the call, in the script, was that we're seeing an interesting set of ideas now flowing out of that sales structure, that offer us opportunity for growth. Because the team is representing the total portfolio now and in the past, they were really focused on their individual categories. So new ideas are coming in every day, and just like we have an innovation funnel, we now have a commercialization opportunity funnel of ideas that we can go after. Some of them are attractive, some of them are not, but the fact that the dialogue is occurring and that the function, the customer development function is now engaging with the businesses about opportunity to accelerate growth, that's a very constructive and positive development. I think we'll see some value out of that in 2012, certainly in the back half of the year. But the reality is, the full value comes next year. And there's much more to do. So this is the first step, but there's more to do. There's more opportunities. As soon you as you start thinking that way, you see all kinds of opportunities for growth and also for cost.

Okay, great. And just a housekeeping and then I'll hop off. Did you say, I think you bought back about $16 million worth of stock, and I know you had I think $250 million left in the authorization. So I was just wondering if you could talk about buyback and then just how aggressive you may be over the next year or so with that.

I would like to remind you that our philosophy is actually not to be aggressive as we want to be opportunistic. So basically, you'll see us buying more when there's a big discount to what we consider fair value of the stock, and you'll see us buying less as we approach that value. The program to date, we've bought about $62 million against the $300 million program.

Can you say if you bought anything in the month of April with your stock a little bit weaker over the last few weeks?

I can tell you that through the end of -- yes, we have been in the market in April.

And your next question comes from Joe Altobello with Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Just a couple of quick questions. I guess first, in terms of the positive surprise you guys saw on the quarter, even adjusting for the pre-buy. It seems like given the strong growth you saw in international, that most of the surprises were on the international side. Is that correct? And if not, where did you see some upside surprise in the U.S.?

I'm pleased with the Baby momentum in the U.S. Some of that is a rollover out of Q4 and was built into the base. But some of the Baby over deliver -- was over delivery in the U.S. and it's core consumption-based. We continue on our Tools business to see very, very good momentum. And as I said, sort of the warmer earlier spring certainly contributed a bit of that, but we've got very good innovation programs on IRWIN, and we just have a superior selling system on Lenox. So we're seeing good traction with those businesses. So it's not just emerging markets. It is -- those core businesses in the U.S. are performing quite well. And obviously in Writing with InkJoy's launch, we have good momentum in those businesses around the world. As I said, we've launched InkJoy now in every market where Paper Mate is sold. So that is contributing both in the developed world and in the emerging markets. Now all that said, I'm really pleased with the growth rates outside of the U.S. They're not quite to the ambition we've set for ourselves, for 2013, '14, '15, but they're a step towards that, and this is before we've really pivoted our resources against them. Because as you recall, we just shared with you the growth game plan, the framework for thinking in February at CAGNY. We got the board's approval to it in November. So we've built the 2012 plan in a different context, and so we're shifting the activity systems in the business towards the growth game plan, but it's a transitional year in that respect. And so we haven't seen the full upside of what we intend to do in those markets. Now that said, I've always said that job one is to get more commercial value out of the markets where we are and to attack the structural cost in those markets so that we spinoff enough cash to make those investment bets. We need to demonstrate that as our first step. But strategically, I would hope that over time we can deliver even more out of the emerging markets, but I'm pleased with it. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: On that point, in terms of the emerging markets, how should we think about the profitability ramp as you go forward in 2012, '13 and beyond? I mean, obviously, it's a going to need some investment that you've talked about that in the past, but when should we start to see not only the top line impact from those investments, but the bottom line impact as well?

Yes, what we've said is, we're going to go after the opportunity for accelerated growth in the context of a commitment to deliver steady sequential improvement in operating margin, operating income margin as a company. And so our investment profile will be governed by the desire to deliver that. Now, what we've also said, and we explained at CAGNY, is that our margin structure in the emerging markets is very high. It's very good. In part driven by the pieces of the portfolio that we have in those markets, and that should structurally continue, although for a period of time we will need to step those margins back as we invest for growth. And the way we'll fund that is by getting the cost out of Western Europe, and the cost out of North America such that we get the margins up there. The net effect of it should be margin enhancement for the company, steady, sequential improvement in operating margin enhancement and operating margin delivery and operating margin growth. And we've said this year that we envision delivering up to 20 basis points of normalized operating income margin, and I think we should be committing ourselves to doing that going forward, as I said in the discussions around the longer-term guidance. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Got it. Okay. Just one last one, if I could. In terms of the -- your growth game plan, you talked about allocating resources differently than Newell has done in the past. I would imagine some of those discussions you have are positive discussions, and some of the discussions you had with business leaders might be a little bit more difficult. How has the organization -- or at least parts of the organization that may see less resources, adapted to this new reality?

So, Joe, what we did this year to enable that conversation to occur in a productive way is we changed our compensation system. If you recall, we had the 43 different bonus pools, management incentive pools last year. This year, we have one, total company performance. And so we've taken the constraint off that would have inhibited the movement of resources -- either human capital or money across business. And so, that was an important first step. The other thing that we're attempting to do through targeting is to establish targets that are relevant to the roles that those businesses play. And again, '12 is a transition year, '13 will not be. We've already started having conversations about our 2013 plans and targets. And those plans and targets reflect the strategic ambition we've set for each of those different businesses. So there is a way for everybody to benefit from this pivot, as I describe it, because everybody plays a different role and has a different set of metrics that they're accountable for delivering. In service to an outcome that should be greater than the sum of the parts, and that's been our historical opportunity. We simply have been a holding company adding up the individual businesses. What we’re trying to do is make the whole greater than the sum of the parts and accelerate our growth trajectory by doing that. Of course, it's just a plan at this point. So we need to live it and operationalize it and drive it into action. So I don't want to overpromise at this point, but it's a framework that will drive our choices over the next several years, and it won't change because we know it's right.

Your next question comes from Bill Chappell with SunTrust.

I'll try to ask both in one breath. I know most kids are getting out of school, but maybe you could give us an idea of what you're seeing for the back-to-school, kind of from what you're hearing from retailers for both the Writing business and Office business? I mean, whether they're getting more encouraged or if it should be any different there? And then second, with what you said in terms of kind of some of the timing and headwinds over the next couple of quarters, would do expect -- and I know you don't give quarterly guidance -- earnings to be down over the next 2 quarters on a year-over-year basis and then should really bounce back strong in fourth quarter?

Look, I think in the way I've described our earnings profile, this year is going to look unusual, and it'll have 2 nice bookends, which I don't love because it creates a little bit of drama as you go through the year, but that's the way it's going to flow. I don't want to get specific, Bill, on whether we're going to grow or not grow EPS in any given quarter. We're going to push ourselves to grow EPS every quarter. Even though in particular, Q3 is really difficult because of the bonus true-up in that window. So I think -- I don't want the -- I got people listening to this call, so I don't want to take any pressure out of the system for them. But obviously, Q3 will be a challenge in the mix, and Q2 obviously has a challenge associated with the SAP flip. But we're going to -- we've got better underlying growth in Q1 than we anticipated having at this point, and I don't know how the story will play out, but I'm hopeful that we -- these folks have really demonstrated that they can change and deliver at the same time. So setting the ambition at the right level is important in order to continue to build the confidence in the organization. So I would love it if the story ended with 2 quarters of growth in the middle versus prior year from an EPS perspective and the bookends I have described, but I just don't know yet. I don't know whether we're going to be able to deliver that. Part of that will be a function of whether we can really make headway on gross margins. I'm pleased with the gross margins, and they're impacted negatively by the Décor performance in Q1.…

No, I mean it's obviously a critical window. And it's going to be -- as it always is, it's going to be a real competitive battle. And our partners are clever, and they'll play us off each other, and we'll have to be clever and think about how to navigate through those waters. The good news is, we've got a great innovation in our hands that will be marketed fully in that window of back-to-school, and we didn't have that in the year-ago period. We've got great share momentum, over 100 basis points increase in share, market share. In fact, I didn't say this in the script, but in the latest 13 weeks, Paper Mate is now the #2 brand in the total writing category behind Sharpie. And so we've got good momentum, fundamental momentum in this business. It's going to be -- there'll be a battle like it always is. So I'm not going to project how the story will end in that 4 or 5 week compressed window. But we've got the tools to go after it, and we're fully resourced to do it.

Your next question comes from Lauren Lieberman with Barclays.

Just wanted to ask a little bit about some of the Consumer businesses you didn't touch on, namely Culinary and even Rubbermaid Home. Just -- it seems like home improvement trends that I've heard from some other companies and from retail sales reports and so on, do seem to be improving, so I would have thought those businesses might have seen a little bit of pick up as well. So can you talk about momentum in those?

Yes. We've got a great innovation funnel coming on Rubbermaid Consumer in the cleaning area and then refuse, and so I'm excited about those. Those innovations are in front of us, not that -- they were not being fully marketed in Q1, but they get marketed and they sell in, in a bigger way, in the middle to later half of the year. Culinary, it's a great brand. Calphalon's a great brand. And we continue to have good delivery on that business. Last year, I was flattered by increased distribution. As you recall, the J.C. Penney sell-in. So we've got to lap that. So the growth rate certainly in 2012 will not be as dramatic as the growth rates were in 2011, but the fundamentals of that business are wonderful. We've got a really terrific leader and team on that business, and we continue to build out our innovation agenda there. So I'm very encouraged by that. I think it won't be the driver it was last year for the lack of the onetime benefit of the Penny sell-in, but not -- nothing to do with the fundamentals. And on Beauty & Style, we're just launching a new line of hair dryers and curling irons, and it's really an important addition to that portfolio. So we're playing on both sides of the aisle, and that's just flowing into market as we speak. So we'll see how our heat style range does. But I think the brand, the products look quite good, but it's -- again, it's still in front of us.

Great. And just to make sure I understand completely, that's a totally new add to that business, right? The heat filing?

Yes. If you walk, Lauren, if you walk that aisle where hair accessories are, it usually sits on the other side of the aisle. So and our competitors have both offerings in their portfolio, and now we do as well.

Your next question comes from Budd Bugatch with Raymond James. Budd Bugatch - Raymond James & Associates, Inc., Research Division: Really on Baby & Parenting, I think you've been pretty clear that I think the balance of the year looks like on a revenue basis kind of flat to down-ish a bit. I wonder if you could comment a bit on the profitability, the contribution margin in the first quarter was pretty spectacular as was the overall operating margin, how do you see the profitability of Baby & Parenting for the full year versus last year's operating margin? And maybe comment on the contribution margin.

I was very pleased with the operating margin delivery in the Baby business. Certainly benefits from the tremendous momentum we have on Aprica in Asia, which is a higher margin business in the balance of the line, and so we're getting a mixed benefit on margin in Baby. But it's also driven by some big and tough calls that Christie is making on cost. And so it's the combination of those things and a strong working relationship with our key supplier on Graco, our partner or sourcing partner and working together on cost. It's been a very good 90-day window. The challenge going forward will be that the mix benefit that's coming from Aprica in Japan because we lapped the step up in that performance, that will be less meaningful for our business in the out quarters, although we'll still see some of it. And so the real driver of margin delivery and improvement over time will be getting the Graco business moving in North America. And although I'm happy with that progress, the really material step up will come when the '13 innovations flow through. It takes about 18 months from concept development to market. And so the real test of the new strategy will come in 2013. And I think we'll do well this year, don't get me wrong, but we've got such a down draft in Europe and there's not a material catalyst there, that it won't be easy to get mid single-digit growth in Q2, Q3, Q4. Now that said, we're not taking the pressure off Christie and she's not taking the pressure off her team. So we're going to push ourselves toward that. But not at the expense of anything strategic going forward. Budd Bugatch - Raymond James & Associates, Inc., Research Division: But I don't think you commented on the profitability for the year. The contribution margin in the first quarter was 47%, if our math is right. Is that about what it will be for the year or will it be...

No, it won't be, because you're looking at the year-over-year improvement in profit that's driven on the back of the mix improvements in Baby related to Aprica. We're going to get some improvement. Certainly, some material improvement versus prior year, but not at that rate. Budd Bugatch - Raymond James & Associates, Inc., Research Division: Okay. And just my last question or a follow-up question is on -- what's left to do on SAP? Can you kind of maybe refresh us? We've talked a lot about the pre-buy. How much is left to do? And are you seeing any benefits now from SAP? It's been a process now for, I think, 4 years.

Yes, I know, it's been a journey. We certainly have visibility into cost and complexity, and we have visibility into working capital complexity. And we're -- the real opportunity is to now mine that. We're delivering above expected outcome with respect to European transformation. That project will yield a higher IRR than what was committed to the board, in part by strong operational results, and you see that in the operating income margin in EMEA, but also by a better outcome from a tax perspective. So we're starting to get the benefits. There's a lot of work still to do in Q2, and that's why we've tempered some of the growth ambition in the first half of the year related to the start up that has to occur. So when we talk about go live, that simply is -- it gets you to the starting line. And we've been for the last 3 weeks, operating in an SAP EPC model in Europe. And we're ramping up where we thought we would be. But like any other SAP conversion, there's a lot of work to be done on issue resolution, and you have to tackle them as they come. We are not seeing anything material that would suggest that we won't be able to deliver to the expectations we've set for ourselves within the business on start up. I think we don't get to a fully stabilized, normalized delivery until the end of Q2 in Europe. And once we clear that, then we have sort of an open door to move to the next project. And the next project for us will be in the Latin America. We prioritized Latin America ahead of Asia, and specifically Brazil. And so we have a lead team in Brazil now thinking about how to scope the opportunity, and that will be the next project on the horizon.

I would add to that the SAP project since the beginning, Budd, we review it with the board every quarter, and we look at benefit [indiscernible] versus the initial business case. And I can tell you that, generally, we're ahead of what we had expected when the project was approved. Budd Bugatch - Raymond James & Associates, Inc., Research Division: When do you think it will all be done, Juan or Mike?

Europe is done this year. We've begun to do some of prework in Latin America. And now there's discussion going on about what is a right timing for APAC. But we're looking at probably another 2 years.

Your next question comes from Dara Mohsenian with Morgan Stanley.

So gross margin came in better than expected in the quarter. Juan, can you talk specifically about what drove that, and does that mean there's some potential upside to your prior full year expectation? And I know you touched on this, but can you just update us, in general, on the pricing environment here, and if you've held on to all the pricing you've implemented?

Yes, we did hold on. We did get all of the pricing that we implemented. In fact, the pricing was slightly ahead of our expectation. So that contributed. We also mixed up, because the businesses that recorded the faster growth in the quarter, particularly versus expectation, tended to be the higher margin businesses, so there's a little bit of mix there. And last, there was a slight benefit from inflation, it was slightly better than our expectations for the quarter.

Okay. And do you think those are things that generally extend in the balance of the year, or is most of it really mix related that dissipates as we look at the balance of the year?

Also we had a ForEx impact benefit, by the way. The inflation -- our outlook for the balance of the year is slightly better than it would have been a couple of months ago. So I mean that should continue through the balance of the year. The pricing was a pricing really from 2011. So that's already -- the incremental benefit will read through the balance of the year. And we hope that the mix benefit will continue, depending upon how the business has performed in the balance of the year.

I can tell you, Dara, that I really like the taste of 38.3%, but it sets an ambition towards something even higher. And it's good to get a step up. This gross margin delivery at 38.3% happened despite a Décor down draft in the numbers, and it's the highest gross margin delivery we've had in 6 quarters, which is also encouraging. So we've got a lot of things we want to do going forward in the growth game plan. Some of it will be enabled by ripping the structural cost out. Other things will be enabled by continuing to work gross margin up. And so I felt terrific about this outcome, particularly in the context of the Décor down draft and also in the context of a negative mix effect associated with the Baby gross margins. So while Baby gross margins improved period-over-period, it mixes it down. So we're going to work hard on this one because it gives us the kind of flexibility, both from a growth perspective and also from an earnings perspective. And so if we can handle it and hold it, we will. Obviously, it's going to get tight. Like I said, as things get competitive in Q3 in our Writing businesses, and we're going to -- probably #1 is to maintain competitiveness. So we'll manage through all of those things, but one of the calls to action within the business is to really look at this number and ask ourselves whether we can continue to build on it.

Okay. And it sounds like the European SAP implementation is proceeding well. Do you guys have comfort that execution risk or any potential hiccups is kind of behind you there? Or where do you stand from an execution risk standpoint in implementing that?

Yes, I think it's premature for us to kind of put the mission accomplished banner across the aircraft carrier bow. That said, things are going exactly the way we anticipate that they would go. And I'm very proud of the team and pleased with the energy, the work effort has been really commendable. But there's going to be issues that we're going to have to confront. We need to work through that. This tricky stuff as you try to do SAP across 20 countries and across all the businesses we've got. That said, we've put the right resources against it. But like any SAP start up, there's always issues that need to be resolved, and we're right in the middle of that. So there's nothing that alarms me, but it's premature to declare success.

Yes, we're still in the hyper care phase of the implementation. Our team basically categorized it as crawl, walk and run. So the crawl is behind us. We're still in the walk phase before we run.

And there's some businesses that are running already, and there's some that are just getting out of crawl into talk. And that's how it'll play out for us between now and probably middle of June. Certainly, by the end of the quarter, hopefully, we'd put a punctuation point on the conversion and move on to the next opportunities.

And your final question comes from Linda Bolton-Weiser with Caris. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: Just in thinking about your presentation at CAGNY on your strategy. You had put some of the businesses into buckets to, at least temporarily, I guess, in the near term, kind of curtail international expansion. Can you enlarge upon your thoughts there? Is that just sort of because right now you don't feel that's the best return on investment? Or are those businesses that really long term are not really going have much of a global opportunity? Can you just kind of talk about that? And going along with that, kind of your thoughts on acquisitions and divestitures? I know you've got a lot of other important strategic things going on and it might not be top of mind, but have you done like a portfolio analysis of things that you really think could be divested or are you just completely putting off that thought process? And is there any chance at all of acquisitions right now if the right thing came along?

Good question. So Linda, the answer is that there's tremendous opportunity in the win bigger categories and that's going to require investment. And what I want to make sure is that we're single-minded about those choices. And it doesn't mean that those other businesses don't have attractive growth opportunities in the markets where they are. They do. And we're continuing to invest for that. But I don't want resources spent on things that we're not likely to operationalize over the next couple of years when we have investment opportunities in the win bigger categories. And so for the foreseeable future, at least for the next several years, those businesses need to look to build their share positions and develop the markets in the markets where they are, and we will resource them to do that. Like I said, every business must grow. We're just going to grow them differently and at different rates. It doesn't mean they don't have potential in the next chapter to be part of our strategy for emerging market expansion. We've got some beautiful brands there. So they all have the potential to play. We've picked the businesses that have the highest potential to piggyback on some macro trends and have brands and products with differentiated product propositions and commercial systems. We picked the pieces of the business that offer the most upside, and we'll talk more about this at the Analyst Day in May and give you the background for some of those choices, in a way that you can probably dive deeper on than you were able to at CAGNY or certainly in this call. With respect to M&A, like I said, we've got about $100 million to $200 million worth of business that somebody else probably could create more value with than we…

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