Newell Brands Inc. (NWL) Q1 2012 Earnings Report, Transcript and Summary

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 better than consensus. Adjusted for the benefit of the SAP pre-buy, normalized Q1 EPS would have been approximately in the middle of our full year EPS guidance range of 3% to 6%. We delivered 10 basis points of normalized operating margin improvement, despite increasing strategic SG&A, about 90 basis points. The increased strategic SG&A investment was fueled by continued progress on structural SG&A, down over 80 basis points versus prior year and good sequential and year-over-year improvement in gross margin to 38.3%, up 20 basis points versus prior year. Our 38.3% gross margin was our highest result in the last 6 quarters, despite continuing challenges from operational issues in our U.S. Décor business. Importantly, cash flow was over $60 million better than prior year, and we returned over $40 million to shareholders through dividends and share repurchases. In Q1, our Professional segment had another strong quarter, delivering core sales growth of 10%, with the reported sales up over 9%. This continued strong performance was broad based. Our Consumer segment core sales declined 2%, with reported sales down 2.6%. This downturn was driven by the continued challenges in Décor which, while expected, masked a very good quarter on the balance of our Consumer segment. Writing, in particular, had strong performance with excellent innovation on Parker and Paper Mate having a positive impact on those businesses. We have made good progress resolving the operational issues at Décor. Q1 represented sequential improvement in customer service versus Q4, and we believe we'll see further improvement in all key metrics in Q2. The Décor business should return to more normal operating rhythm in the second half of 2012. Our Baby & Parenting segment delivered outstanding growth in Q1, with reported and core sales growth of 21%. Our Baby growth rates were enhanced by weak year-ago comparisons and some onetime benefits that either don't repeat or reverse out in the balance of the year. Our expectation for the remainder of the year is for more modest performance. Importantly, the Baby results due reflect steady progress with Graco POS positive in the U.S., and excellent momentum on Aprica in Asia, partially offset by continued challenges in Europe. Excluding the SAP pre-buy, 8 of our 9 global business units grew core sales in Q1, 5 of the 8 grew core sales greater than 5%, and 2 of the 5 grew core sales greater 10%. In the emerging markets, core sales grew over 14% in Q1, with double-digit core sales growth in most of the major countries. Our Q1 core sales grew nearly 3.5% in the developed world. Excluding the SAP pre-buy, developed world core sales would have been up about 1%, with strong growth in Japan and solid results in the U.S., offset by continued sales declines in Western Europe. Our key growth initiatives yielded the impact we expected in Q1. Industrial Products & Services achieved their 9th consecutive quarter of double-digit core sales growth. Rich Wuerthele and his team are simply doing the fundamentals right, superior products, superior selling systems, new market entry and everyday great execution. Parker Ingenuity continues to be deployed into new markets with a very successful launch in Japan. I visited a number of our customers and salespeople in Japan a few weeks back, spending time both in Tokyo and Osaka, our Fine Writing business looks terrific. We will launch Parker Ingenuity, with Parker 5th Technology into China in Q2 2012. IRWIN delivered double-digit sales growth as a result of continued new product momentum and strong 'Irwinization' merchandising programs across the Americas. Our blue wall and other merchandising vehicles are getting the IRWIN brand and our new innovations in front of contractors in a more effectively way than ever before. Paper Mate InkJoy has been launched in virtually all countries where Paper Mate is sold. Market growth is accelerating, and our shares are up over 100 basis points in the latest 13 weeks in the U.S.. Importantly, Paper Mate growth is driving about half of the category's growth despite having about a 14 share of market in the U.S., primarily on the strength of Paper Mate InkJoy. We're gearing up in partnership with our customers for back-to-school, and the heavy launch support behind InkJoy is still in front of us. On Baby, Aprica's momentum continued with growth of over 50% in Asia. I met with our team, as well as our largest global Baby customer when I was in Japan. Our customers are pleased with our innovations, and we're working in partnership with them to continue to build the market. Finally, Rubbermaid Medical continues to deliver outstanding results with core sales growth of over 30% as we continue to scale this brand. My brother-in-law and sister-in-law just had their first baby this past weekend, and I had the opportunity to go welcome my nephew Jacob into this world. For me, I'm not sure what was more thrilling, to see and hold little Jacob, which I got to admit was really cool, or to see and hold the 8th Rubbermaid Medical M38 cart systems that were in the Maternity Ward of Valley Hospital in Ridgewood, New Jersey. That was just as cool as holding little Jacob. Beyond these initiatives, our efforts to unlock the trapped capacity for growth are also progressing well. In Europe, we've migrated our ERP systems to SAP, and are operating in an EPC model as of early April. The teams in Europe have worked nonstop over the last few months and have done a great job to get us to the starting line, and we're ramping up order processing and fulfillment as we speak. There are several weeks of handholding and issue resolution in front of us, as there always is in an SAP conversion. But the trend line is positive, the transition was managed well, and things are progressing as expected. Project Renewal has good traction as well. Q1 represents the first operating quarter for our simplified group in GBU structures, 3 groups to 2, 13 GBUs to 9. So far, the teams are functioning really well. We've also implemented our new U.S. selling organization. We have created integrated cross-functional customer and channel teams at most of our top customers and in most of our channels. We still have GBU level salespeople on those teams, but they now report to a sales leader for that customer or channel who is responsible for developing our strategic relationship and our joint business plans across the total portfolio. We transitioned to this new structure in the U.S. in Q1. We've held top to top meetings with many of our customers, and we already have a funnel of new commercial ideas flowing into the business. Importantly, this strengthened customer-facing capability comes with lower costs than in the previous design, as duplicative selling structures at the GBU level have been eliminated. Beyond our selling structure change, we've announced the closure of our Rubbermaid Consumer factory in Greenville, Texas. We should be up and running in the second half of the year in the rest of the network with capacity utilization increased and gross margin benefits flowing through to the P&L. So the European transformation and Project Renewal are progressing well. We've also announced our drive to reduce indirect procurement in partnership with IBM. Together, these programs have given us the flexibility to begin to fund increased investments to strengthen brand building and selling capabilities on our priority businesses in our priority markets. In Q1, we began to invest in increased selling coverage in Latin America on our Professional and Writing businesses, and to fund early in the year support behind the Paper Mate InkJoy launch in North America and Latin America. There will be more investments to follow as we move into the second half of 2012 and into 2013. So we're pleased with the Q1 results. They're a solid first step toward delivering our full year guidance of 2% to 3% core sales growth, 3% to 6% normalized EPS growth, up to 20 basis point improvement in normalized operating margin, and cash flow of $550 million to $600 million. The team is working hard to establish a cadence of delivery in the business that is consistent and predictable. At the same time, they're embracing and implementing the changes necessary to create a bigger, faster growing, more global and more profitable Newell Rubbermaid. Before handing over to Juan for a more detailed dive in the numbers, I'd like to discuss the impact of the SAP pre-buy on next quarter's results and also punctuate a unique event in the Q3 year-ago period that I've mentioned before, but want to highlight again. First, the European SAP pre-buy effect on Q2 is self-evident. The roughly $28 million of pre-buy revenue and the associated EPS in Q1, will reverse out in Q2. Additionally, we will not return to normal merchandising support in Europe until the end of May or early June, once our order management systems are back to full capacity. The Q2 reversal of the Q1 SAP benefit, the lack of EMEA merchandising support, coupled with peak ForEx pressure and generally poor European macros will put pressure on Q2 results. While none of this is new news and is all consistent with the guidance previously provided, I would point out that the best way to evaluate our results at the end of June will be on our first half numbers versus prior year. As I mentioned on our January call, the other unique event in the numbers relates to the management incentive true-up that occurred last year, as it became apparent that we were not going to deliver our targets. The bulk of that benefited -- benefit flowed through to EPS in Q3 2011. This year ago benefit will create about a $0.04 to $0.05 EPS hurdle for us to clear in Q3 2012. With the reversal of the Q1 SAP pre-buy in Q2 and the year ago incentive plan true-up in the prior year Q3 base, the middle 6 months of 2012 will be tough months to lap with respect to EPS growth versus prior year. That said, our strong start to the year puts us right on track to deliver in the full year guidance range, although EPS growth will be more skewed to Q1 and Q4 than it normally would be. With that, let me hand it over to Juan.

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 business was another. Operating margin on a normalized basis increased 10 basis points to 11%. Interest expense for the quarter was $20.2 million compared with $21.9 million in the previous year. This improvement was due to lower debt levels. Our normalized tax rate in the fourth quarter was 23.5% compared with 24.9% in the prior year quarter. The change in the normalized year-over-year tax rate was primarily driven by the geographic mix of earnings and the timing of certain discrete items recorded in the quarter. We continue to expect the full year tax rate to be essentially flat to last year at around 26%. During the quarter, we used cash of $47.4 million for our seasonal operating needs, a 56% improvement over the prior year. This was a very good outcome considering the incremental working capital needs in the quarter to support SAP go live in Europe. The main drivers of the year-over-year improvement were lower incentive cash payments related to our 2011 management bonus, as well as lower customer programs partially offset by higher pension contributions. We continue to make steady progress improving our working capital. We were able to maintain our cash conversion cycle essentially flat versus prior year in spite of incremental need to support SAP go live in Europe, which included extended terms for customer pre-buys, supplier prepayment and targeted inventory build. We returned $40.6 million to shareholders in the form of $24.2 million in dividends and $16.4 million paid for the purchase of 0.9 million shares. We retired $250 million in medium-term notes in the quarter, which was bridged with short-term lines that we plan to pay down with operating cash flow in the second half of the year. We believe our balance sheet will continue to get stronger and towards the second half of 2012, we should be close to our desired comfort range of 2.5x adjusted leverage ratio. Turning now to our 2012 outlook. As Mike covered earlier, we are reaffirming our full year guidance. We expect full year core sales growth of 2% to 3%. With key currencies strengthening against the U.S. dollar, we are now widening our range of expected foreign currency translation impact on sales for the year to a negative 100 to 200 basis points. This assumes average exchange rates for 2012 remained around recent spot rates. We anticipate normalized operating margin to expand by up to 20 basis point. This guidance reflects our expectation that we will generate gross margin improvement as productivity, improved product mix and pricing more than offset inflation, and that we increase strategic SG&A spend to support our growth game plan. We expect interest expense for 2012 to be approximately $80 million, with debt reductions to occur in the second half of the year. Our normalized full year effective tax rate for 2012 is projected to be around 26%, which would imply an approximate 27% rate for the balance of the year. We expect 2012 normalized earnings per diluted share between $1.63 and $1.69 or about 3% to 6% growth. This EPS guidance excludes between $110 million and $130 million of planned restructuring and restructuring-related costs associated with the European Transformation Plan and Project Renewal. Operating cash flow is expected to be between $550 million and $600 million for the full year, including $110 million to $120 million in restructuring and restructuring-related cash payments. Capital expenditures are projected at $200 million to $225 million. In conclusion, with Q1 behind us, our outlook for the year has not changed. We continue to anticipate headwinds from continued economic uncertainty in Europe, some gross margin pressure in the first half of the year, as we work through our Décor issues and unfavorable foreign exchange. But there's positive news as well. Our businesses are gaining momentum. We are seeing good growth in the businesses and regions where we're focusing our investments. The Professional segment had another strong quarter helped in large part by the sales force investments we made. Our Writing businesses are performing well, largely driven by innovative new products and superior commercialization programs. And we are seeing continued momentum in our emerging markets, again, where we are investing resources to accelerate growth. In summary, our first quarter results give us confidence in our ability to deliver on our full year guidance. With that, I'll turn it back over to Mike.

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 is the 4th consecutive quarter of good Aprica results. So we don't fully expect to grow Aprica in Asia for the balance of the year at the same growth rate, but we do expect it to grow nicely because we're continuing to build our share position, and we've got an excellent team there that's focused on the right things. The offset to that, we expect the problems in Europe to continue until we get our 2013 new items to market, which won't occur until late 2012. Now as you recall, we've moved the fellow who is running our Aprica business in Asia to Europe to help us straighten that business out, Tom Brown. And he's landed, and he's getting his arms around it. And I think the opportunity might be, if we can stabilize Europe before those new items hit. But there's no sign -- I think it would be a bad assumption to build into the core forecast to assume we could do that. The net of all this is we'd expect to grow lower-single digits in 2012, and we're going to push ourselves to drive towards mid single-digit delivery. I think that's a stretch as I look at things today. But if things break our way, like Europe's stabilization or if the Aprica growth rate in Asia exceeds the growth rate we built in, despite lapping the step up in the year ago period. It's possible. But the key thing on Baby is to not take the 21% growth and extrapolate forward, you'd over rank your estimates if you were doing that. On Professional, about 60% of the SAP pre-buy is related to the Professional business. And so despite that SAP pre-buy, we've got very, very good results and it's broad-based. And this is a very attractive business from my perspective. As you know, from our discussions at CAGNY, it falls into the win bigger portfolio roll. And this is -- win bigger means it will be our first call on resources, whether that's human capital, financial resources. It's on trend with the move, from rural living to urban living in the emerging markets. And our opportunity is to take what is a differentiated set of product propositions and brands and a very good selling system, a repeatable model grounded in those 3 things and deploy it more broadly in the world. And so, we will continue to press our Professional business for accelerated performance, and the numbers in the first quarter at around 10% core sales growth are flattered in part by the SAP pull-forward, but that really isn't what explains the numbers at that level. It's just good underlying performance and excellent leadership. So those are the 2 questions you've asked. Of course, we have another business in the quarter that is important to talk about, and that's Décor, because that's actually -- while it came in exactly where we thought it would, right on our expectations, it certainly was a down draft in both growth and margin in the quarter. So excluding Décor, our Consumer segment core growth rates and margins and excluding the SAP pre-buy associated with the other Consumer businesses, it would have been positive, as a result of the good results on our Writing businesses. So Décor hurt the optics of our performance. So the way I look at this is that the Baby onetime benefits of weak competitors and the absence of the inventory liquidation is offset by -- sort of washes out against the Décor underperformance, and those 2 things normalize out as we move forward. We fully expect Décor to make sequential improvement in Q2 and to get back into a normal rhythm of delivery in the second half of '12. So hopefully, that creates a framework for you to look at our Q1 results and build your view forward. Those are the key moving parts.

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. So if we can figure out how to get that Décor negative out of the mix and hold it altogether everywhere else, then we get to a different place than what we've built in. But time will tell, and I think you need to -- I got a little bit more explicit in this call because I really wanted you guys to think about that as you look at what we have to do in order to make it happen. Now what I won't do is I won't manage the business in 90-day increments. We just laid out this strategic framework for an ambition for the company, and choices in any given quarter to step towards that ambition may have consequences in terms of the EPS flow. So the fact that I've got to lap a management incentive bonus true-up in the prior year window is not going to cause me to not invest in the strategic initiative even if there are consequences with respect to EPS growth in the 90-day window. And I know that we'll try to manage it and bring visibility to that, which is what I've tried to do today, so that you can anticipate it, and we don't get into any missed expectations. But at the same time, the thing that is the dominant logic for me, and the thing that's driving choice for me is consecutive steps towards the ambition set out in the growth game plan. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Okay. And then just following back up on the Office products for back-to-school, anything you're hearing early from the retailers?

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 can. And if the right suitor came along for those businesses, we certainly would listen. And if we get the right price, we certainly would listen. Even if it does cause us some challenges with respect to retained cost, you just have to make those strategic choices when they present themselves. And so we definitely would do that for those businesses. On acquisitions, I continue to think that our #1 job is to get this business back into a cadence of delivery and then pivot the organization towards the strategic roadmap we've articulated in the growth game plan, with a focus on organic growth, not on external development. We need to build that story out before we complement it with M&A, and we have -- and so we've made that clear within the business, and that's certainly clear with respect to how we're allocating capital. Now that said, we can't control when those opportunities present themselves. And if the right strategic thing presented itself, we'd have to take a look, or if the right bolt-on presented itself, we'd have to take a look. But job #1 is to get the business systems in place in those markets and to shift our activity systems to delivering the growth ambition we've laid out organically. Well, thank you, everyone for participating in the call today. As we said, we're pleased with our start for the year. We're getting back into the cadence of delivery that is consistent and predictable. And we look forward to seeing many of you in Atlanta, as many of you as can join us on May 24 for our Analyst Day, where we'll spend time explaining exactly how we're driving the new growth game plan into action. Thanks, everyone. Enjoy the weekend.

Today's call will be available on the Web at newellrubbermaid.com and on digital replay at (855) 859-2056 with an access code of 70623881 starting 2 hours following the end of today's call. This concludes our conference. You may now disconnect.