Good morning, and welcome to Newell Rubbermaid's Second Quarter 2013 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 Doug Martin, Chief Financial Officer. Mr. Martin, you may begin.

Thank you, Regina, and good morning, everyone, and thanks for calling in. Nancy isn't joining us this morning, but she will be available next week. And of course, you all know Alisha, and she's available after the call. On the call with me today is Mike Polk, Newell Rubbermaid's President and CEO. Before we get started, I'd like to take this opportunity to remind you that today's presentation includes forward-looking statements. These statements are based on current expectations and assumptions. Actual results or outcomes could differ materially from management's expectations and plans. We caution you to consider the important risk factors described in our press release and in our various SEC filings. Please note that any non-GAAP financial measures including, but not limited to, core sales, normalized operating margins and normalized earnings per share, are provided because management believes that they provide insights which enable investors to better understand and analyze our ongoing results. A reconciliation of GAAP and non-GAAP measures is included in today's earnings release and as part of the slide deck that's available on our website. With that, I'll turn the call over to Mike.

Thank you, Doug. Good morning, everyone, and thanks for joining our call. We have 2 objectives today. First, Doug and I will review our second quarter results and update you on the progress we're making, driving the Growth Game Plan into action. And second, I'll provide some perspective on the balance of 2013 and the factors that could influence delivery. This morning, we reported a good set of Q2 results that represent our eighth consecutive quarter of consistent delivery. Core sales grew 4.5%, 2.5% when adjusted for the 2012 European SAP-related timing shift from Q2 to Q1. Normalized operating income margin increased 100 basis points, driven by increased productivity and a significant reduction in fixed SG&A as a result of Project Renewal, partially offset by increased brand support. We delivered solid operating cash flow of $63 million, a normalized earnings per share of $0.50, up 11.1% versus prior year and $0.01 ahead of consensus. Through the first 6 months, core sales increased 2.5%, in line with expectations. Normalized operating income margin expanded 40 basis points. Normalized EPS increased to $0.85, up 10.4% versus prior year. And we've delivered solid operating cash flow, which has enabled us to invest back into the business while also returning value to shareholders, increasing dividends and share repurchases by 70% or nearly $66 million versus prior year. At the same time as driving delivery, we've been very busy continuing to drive the Growth Game Plan into action. During the first half, we deployed our new operating model, reorganizing the company around its 2 core activity systems: development and delivery; supported by 3 business partnering functions: legal, HR and finance; and 4 winning capabilities: in design, marketing and insights, supply chain and customer development; all in service to driving accelerated performance in our 5 operating segments:…

Thanks, Mike. Newell reported net sales for the quarter of $1.47 billion, a 3.5% increase over the prior year. Core sales, which exclude the impact of unfavorable foreign currency, increased 4.5%. When adjusted for the $28 million impact of the 2012 EMEA SAP pull forward from Q2 to Q1 of last year, second quarter core sales grew 2.5%. Gross margin was 39.5%, a 70 basis point year-over-year increase as strong productivity was partially offset by inflation and pricing. Normalized SG&A expense was $363.2 million, or 24.6% of sales, a decline in overall spend of 30 basis points. Renewal savings enabled us to fund an additional $8 million in strategic advertising and promotion investment behind Tools and Commercial Products, in addition to the annualization of sales force investments last year that are yielding growth dividends in Latin America and on Rubbermaid Commercial in North America. Our plans call for further acceleration of strategic spend behind our brands in the back half of 2013. Reported second quarter operating margin was 12.6% compared with 12.4% in the prior year. On a normalized basis, Q2 operating margin was 14.9%, a 100 basis point improvement from the prior year. Interest expense was $15 million, down about $6 million compared with 2012 due to the work we did last year to strengthen our balance sheet and improve our interest position. The normalized tax rate was 26.6%, up slightly from the prior year. Other expense this quarter reflects transactional FX losses, primarily due to the strengthening dollar against the yen, Canadian dollar and Australian dollar. Second quarter reported earnings per share were $0.37 compared with $0.38 in the prior period. Normalized earnings per share, which exclude restructuring and restructuring-related costs and discontinued operations, were $0.50, an 11.1% increase from a year ago. The increase is attributable to…

Thanks, Doug. So let's now turn to our 2013 outlook. As communicated in the press release, we've reaffirmed our full year guidance on core sales growth, normalized operating income margin and operating cash flow, while raising the lower end of our normalized EPS guidance range by $0.02. Our revised full year guidance is: core sales growth of 2% to 4%; normalized operating income margin expansion of up to 20 basis points; normalized EPS of $1.80 to $1.84, which represents growth of 8% to 10% above our 2012 normalized EPS of $1.67; and operating cash flow in the range of $575 million to $625 million. Our full year guidance assumes sustained second half momentum in Commercial Products, Baby and Home Solutions. Very good second half growth on Tools with solid full year growth as a result of our strong second half growth initiatives in Latin America and North America. And excellent sellout in share growth in Writing, but with core sales growth roughly in line with the first half performance as retailer inventories in the office superstore channel rebalanced to sell-through. There are 3 key factors that can influence where in the 2013 full year guidance range we fall. The first factor is the timing of the Office Depot-OfficeMax merger. Our 2013 full year guidance assumes we do not replicate last year's September back-to-school replenishment program in advance of the Office Depot and OfficeMax merger and that the current softness in the broader office superstore channel continues through the balance of the year. The Depo-Max merger will result in a significant distribution network and retail footprint consolidation at that customer. That consolidation will result in a onetime trade inventory reduction, yielding a significant negative revenue impact to Newell. Our 2013 full year guidance assumes that event occurs over some period of…

[Operator Instructions] Your first question comes from the line of John Faucher with JPMorgan. John A. Faucher - JP Morgan Chase & Co, Research Division: So in looking at Brazil, you've obviously got a pretty aggressive plan there, lots of new product launches, what have you. Most companies are talking about economic weakness there. So can you talk about sort of building the business, not exactly up from scratch, but given the smaller scale, is that what protects your growth plan there despite the fact that the economy is obviously softening there?

Yes, if you follow the GDP growth, you would -- across Latin America, you probably would not expect to deliver the kind of growth rates we've delivered in the first half. Our core growth is up about 19%. It's all about where we start from, and we've got a pretty focused portfolio in Brazil that can participate in what will be, over time, a significant investment in infrastructure build-out. And so we're playing a long game in Brazil. It's not about this quarter or last quarter's GDP growth. We've got to take that perspective. The businesses we'll play into Brazil with are all on trend. And having come from the -- from companies that have big emerging market footprints, you have to be prepared to accept the more -- the increased volatility in the macros, if you're committed to building your business and committed to participating in what is obviously a very strong long-term macro story. So you have to accept the short-term volatility for the long-term gain, and that's what we're doing. Again, our upside is clear. We have a line of sight to it. And we don't suffer the downturns that others do given the fact that our footprint is not yet as big as what others have. John A. Faucher - JP Morgan Chase & Co, Research Division: Got it. And then just sort of one quick follow-up on that. In terms of looking at the industrial business band saw blades, what have you, what exactly is the change that's driving some of the weakness in demand there? Is that again just sort of a global macro issue?

Yes, look, our business is North American and Asian based. And so if we look at China's PMIs, 47.7, 11-month low, those are the things -- and look at the commentary around its steel, shipbuilding, auto, these are industries that our business pivots on now. The thing to recognize is that our band saw business is less than 20% of our total Tools portfolio. So the industrial portion of our portfolio is suffering with what is pretty sluggish macros on industrial production across the world. But this, too, will pass and we have good innovation plans in that portion of our Tools business, and we have a very, very strong differentiated selling systems, particularly in North America, that we will continue to leverage.

Our next question comes from the line of Lauren Lieberman with Barclays.

First, my question was on pricing. I was surprised to hear it called out as negative in the commentary. So I thought last quarter your comments were that by the end of Q1 and into Q2, you kind of had the pricing you needed so I would have thought it was -- would have been positive this quarter. Can you talk a little bit about that?

Sure. In some of our businesses and we don't talk about the underlying volume, underlying price growth by segment and, quite frankly, we are not as crystal clear as some others are on that for the total company, but net pricing was a down a little bit in Q2 -- invoice pricing, sorry. List price were up, but customer programming was higher in a couple of specific categories. In our resin-based businesses and in our Tools business, quite frankly, some of our competitors went more aggressive on pricing and merchandising than we are planning. We have to be principled on pricing, so we're taking -- we've taken invoice prices up a number of categories in Q2, and we will do more invoice pricing so list price increases in Q3. But the principle that drives our pricing choices is relative competitiveness to our -- in our markets. And we're not going to compromise on price points, our strategic price points if, in fact, our competition doesn't follow. And so we've got to manage that. We're optimistic in the back half of the year that we will see price realization. The question is, can we count on as much as we'd like? And it's something we'll have to watch. We'll let our pricing principles drive the choices. The variable that it reflects will be customer programming, not list price, and we'll maintain competitiveness. We have enough flexibility in the way we can phase Project Renewal savings, and we have strengthening momentum and productivity as a result of the rollout of our global supply chain organization, such that we can now overcome any potential issues we might face there. But I wanted to be transparent with that because we had hoped we might be able to capture more price in Q2 than we were able to and it's something we've got to be very attentive to going forward.

Okay. And from what you can tell, and particularly in Tools, is it competitors being more aggressive in response to how different things are for Irwin and Lenox today than they were 2, 3 years ago? They're finally maybe catching on to some of the changes at Newell.

Well, look, I mean, I think -- I hesitate to comment on why some of our competitors are doing what they're doing. I will say that we are going to try to drive our growth strategically through innovation, through brand investment and through the right level of customer programming to drive trial and repeat on our businesses. So we'll have to watch that. In any given quarter though, we may have to flex in or out on pricing to maintain competitiveness and, of course, in key dry periods we'll do that. We've seen very, very good growth on this business over the last 4 years. Last year, as Doug mentioned, double-digit core sales growth in the first half of this year and some of our competitors haven't performed as well, a number of them in the first quarter, quite frankly. So the fact that some of them in Q2 have gotten more aggressive doesn't shock me, and the challenge to us is to make sure we build a funnel of great ideas that enable us to not have to play that game to drive our growth. And I think we've got that funnel playing out in the marketplace, the innovation playing out in the marketplace in the second half of this year. So I'm quite optimistic about our ability to deliver a strong growth profile in Tools in the second half of the year and solid full year growth as a result.

Our next question comes from the line of Bill Schmitz with Deutsche Bank.

What was the proceeds for the sale of the Teaching business and the Hardware business?

Well, the hardware business hasn't been closed yet. That's still under way. So no update on that. The Teach business was sold for a relatively nominal amount, and we recorded a small additional charge in the quarter relating to that.

Got you. Will there -- When will the cash proceeds for both -- for the -- there's no proceeds you said from the Teach side or very minimal, but how about the proceeds from the Hardware piece?

The Hardware piece, again, we're still in the middle of managing that transaction. I'd like to see it in Q3, but we're not -- we don't have any specific timing.

I hope we can get the deal done pretty quickly here. And I think if we can, then we will likely see it flow to -- the cash proceeds flow in September. There's -- we're in the midst of it and that timing could shift.

Okay, got you. And then can we just spend a little time on SAP? What percent of the business is up and running? And then, can you just talk about what the sort of discrete costs are nonrecurring there that's kind of flowing through the P&L and maybe what goes away when? I know it's sort of kind of a long broad question. And then also sort of the CapEx associated with it and when the CapEx from the SAP starts to roll off?

Sure. Sure, Bill. This is Doug. The rollout in SAP in Brazil takes -- well, we're just above 80%, right about 80% when we finished in May a little over a year ago, and Brazil takes us up a little more. So we're low 80% in terms of global coverage on SAP. So all of North America, all of EMEA with the exception of a couple really small markets and Brazil. So we've got a foothold in Latin America now. In term -- as the projects downsize, so North America and EMEA were obviously the biggest pieces of the project and Brazil is a little smaller and more contained, so we're capitalizing less cost internally and incurring less cost externally as we move forward. Now the flip side of that is the big costs that we capitalize in the prior 5-year period are being amortized into the income statement. So that over time, there's a slight increase year-over-year in the cost for the next year or 2, and then there'll be a tail.

Okay. How about the expense piece, though? Because I guess, like a lot of the start-up costs with the SAP consultants are kind of sitting with you guys in Atlanta. When does that start to go away?

Well, that's being wound down actually. We've seen some significant reduction in that this year as we rolled off of EMEA and into Brazil, so less support required for that launch. And there's a certain -- we'll continue to wind it down, but then that becomes a certain maintenance requirement across the enterprise.

Yes, just to be -- Bill, just to be clear about where we go from here with SAP and we want to finish the job in Latin America, so next year, we will -- we're setting the stage now to kind of finish up with Mexico and with Endina [ph]. So we've got more work to do on SAP in Latin America. The complexity of Brazil drove our choice to go there first. It was not simply an SAP implementation, we went to a dual-entity structure that's more tax efficient at the same time. That's why it took us a little bit longer to start up on SAP in Brazil than it did in -- in other startups because we needed to manage that complexity. And that clearly had an impact on the Tools and of course, sales growth in the quarter.

Got you. And just the follow-up on that, the $50 million of indirect procurement savings. I mean, typically, you need the SAP kind of up and running to really leverage those savings and also there's clearly a working capital element to SAP, which obviously helps. When do we start to see some of that stuff come through?

Oh, we're seeing that on the indirect side. We've had access, again, to 80% of the data for now over a year across the entire organization, and Mary and her team have a real focus on that area. So we delivered, as you will recall, $20 million last year and are on plan to deliver the incremental $20 million to $30 million this year. So that's all being done. We've made some progress on some of the businesses that have been on SAP for a while from an inventory management perspective, but we see that opportunity continuing to improve as we go forward, particularly as the supply chain, the new supply chain organization gets involved and does things in a more standardized and consolidated and leveraged fashion across the company. So we still see opportunity there. You saw a little blip in inventory at the end of this quarter as we were ramping up to build for some significant activity in Q3, particularly the Tools launch that Mike talked about and some promotions in Home Solutions.

And also the launch of the Levolor business, which went in the first week of July. So I mean, I think -- but in -- again, if we hold a mirror up to ourselves, I think we have a lot of work to do in working capital. I think one of the exciting things about the global supply chain organization and Doug's new organization and the segments work and their ability to focus on delivery is we have a real opportunity there over time to make a -- despite being a very cash generative business, we haven't made as much progress on working capital as I think we would like. And the combination of SAP, global supply chain organization, segments now focused on delivery and trusting their development counterparts to do the marketing and innovation work and the brand work on their behalf, it creates the space to be focused on driving better practices into our business model, and we should be able to make good progress here over time. We made a commitment a few years -- maybe a year ago about making progress over 3 years of $100 million in working capital. That's sort of tip of the iceberg for me, and I think it's really important. It will be a part of the discipline that we need to drive into action as part of the Growth Game Plan.

Yours next question comes from the line of Joe Altobello with Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Just a couple questions, I guess, to begin on Writing. First of all, could you give us an update on China post the reset that you guys had in the first quarter? And then secondly, you mentioned the weakness or continued weakness in the office superstore channel. Is that business moving to other channels? Or is that more of a category softness issue?

Yes. We're -- we saw decent growth in Writing in Q2, so I think you can make some assumptions about channel shifting going on there. On the office superstore channel, that's true. I think there's plenty of growth to be had here. We're committed to working with our office superstore, our retail partners to build the categories in that channel, as well as our commitment to do that with our other retail partners. So we do see channel softness within Writing, but we do see a fair amount of channel shifting happening between the office superstores and mass and food and drug and e-commerce. And so there's some real interesting channel dynamics happening at the moment. And we've been able to absorb that. The real driver of our Writing core growth decline in the first half is actually Fine Writing in China, which is the other part of your question, Joe. And we took a big step back in Q1. We took less of a step back in Q2. We do expect that second half will begin to stabilize the business. I think Q3 will still be a down quarter on Fine Writing. In Q4, we'll see some recovery in China. But we're going to take our time and do that the right way and set up our Writing future in China with a more constructive set of practices en route to market. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Okay, that's helpful. And just shifting gears a little bit to the broader portfolio. Obviously, you did sell Teach. You're on the verge of selling Hardware. Could we see more divestitures? And when might we -- when could we see some bolt-on potentially?

Well, look, I think, Joe, we're focused on the -- of driving the Growth Game Plan into action. As I said, we really, at the moment, don't have -- we certainly have the financial capacity to go buy something if we wanted to do, but I really am -- I'm more concerned about betting down the new operating model and putting it to work. So our focus is more on the organic side of our business agenda. We'll have cash capacity to consider bolt-ons in the future. Obviously, we've started to think about those. But I wouldn't think that, that's how we would deploy capital in the very -- in the very near term. With respect to other disposals, we want to finish the ones we've committed to execute at this point before we think about anything else in that space, quite frankly. I think we have a portfolio that we can leverage, and then we can play the existing portfolio to win. We did say in our Q1 call that we have some product line exits that we might consider as part of the EMEA transformation. We're not at the point to talk about those. And there are portions of our business outside of EMEA that have margin structures that are not that attractive and competitive dynamics that make them challenging. We'll have to figure out how to address some of those, either through the operations or we might consider, on an ongoing basis, sort of weeding those portions of the portfolio out. We're not going to be in a position to talk about any of that probably until the end of October when we do Q3 earnings. We've got more work to do in Europe with the works councils before we can say exactly what we're going to be able to do. And so I'd just manage your expectations towards that window. Whatever we choose to do, it will be smaller than what we've just recently announced on the disposals. So as you recall, Teach and Hardware, about $300 million business. What we're talking about, what I'm referring to in these comments is significantly less than that.

Your next question comes from the line of Taposh Bari with Goldman Sachs.

I wanted to ask, you laid out the scenarios around the office supply space merger later this year. Can you help quantify each of the scenarios and what that could mean for the Writing category?

Yes. I didn't -- purposely left that out. We've got to actually think about all of our -- all the contingencies, simply exposing a number related to what Depot and Max are going to do on their distribution network and on retails footprint consolidation without reflecting in our 2000 growth plans and things we might do to compensate for that down elevator that we'll inevitably have to face into. I think would only play the downside out there. And I try -- so I purposely didn't put a number in front of you. And quite frankly, we have more work to do, understanding exactly what their flow of change is going to look like post-merger. And we're in the midst of doing, building our -- in fact, our whole team is, in this week, building 2014 plans out. So until we've gotten both sides of the ledger clearer, I'd hesitate to give you a number.

Okay, that's fair. Just looking at your guidance, just the trajectory of margins. If we get to the midpoint of your guidance, it looks like you're kind of modeling in less robust margin expansion for the second half of the year than what we saw in the second quarter, yet you're saying that core sales growth are set to accelerate. So can you just help us walk through that dynamic? And just on SG&A, how do we think about that as your core sales growth does accelerate?

Yes. So the reason we see margin expansion, more modest margin expansion in the second half of the year and the potential for margin contraction in Q3 is because we step up our brand investment. And when I say brand investment, I'm largely referring to advertising and promotion investment in the second half of the year. And that's partially funded by the flow of renewal savings and in strengthened productivity and potentially some positive price realization, which we didn't get in the first half of the year. And our ambition is -- the strategic ambition of the Growth Game Plan, quite frankly, is to, in fact, strengthen the investment behind our brands as a way of accelerating the growth. So the combination of brand investment plus new capabilities is what drives growth acceleration in the second half of this year and then into '14 and beyond. And so that's the model that sits behind the Growth Game Plan, and that's why we haven't promised big step changes in operating income margin despite the fact we could deliver that if we didn't -- if we let the savings flow to the bottom line and didn't increase the growth commitment. And so that's the logic behind the Growth Game Plan. It's releasing the trapped capacity for growth, putting that investment back into the business, while delivering what we think will be competitive levels of earnings growth and EPS growth. And that's what we-- begin to do. We started to do it in Q2 and we'll continue to do it in Q3 and into Q4.

I appreciate. Just last one on housekeeping. You mentioned the Brazil SAP this past quarter. Was there a timing shift there on core sales? And was that -- is that reflected in your 2.5% adjusted number, if material?

We actually didn't -- because for the company it's not material, unlike the EMEA's change, which is a pretty dramatic shift, the $28 million. While it is material for the Tools segment in the quarter, it's really not material for the whole company. So we didn't call it out either in Q1 or in Q2. That said, as you look at the Tools numbers, you do need to think about it, and I do think in the Q, we -- yes, we've called out the Tools-specific impact, which is about $5 million shift from Q2 into Q1 that you need to kind of back -- put back into the Tools number to understand what the true underlying performance is. That's why the best way to look at all these shifts is to look at them on a first half basis. So Doug in his comments said first half growth on Tools was essentially flat. That's the real underlying performance in the first half of the year. And the reason we're optimistic about the Tools business is because our activity is skewed to the back half of the year. You can see that in all the launches we're doing and the step-up in investment we're making. And that's why on the full year, we think we can get to solid growth despite having to lap a very strong Tools performance in 2012.

Your next question comes from the line of Bill Chappell with SunTrust.

Just first kind of on the macros, broader question. Are you seeing anything in terms of, especially in the more cyclical businesses, kind of category improvement in the U.S. and maybe to some extent in Europe that give you some confidence going to the back half? Or is this mostly growth-related comment kind of company specific? And I say that of do you need category growth? Do you need improvement to kind of have accelerated growth as we move into 2014?

No, we're not counting on it. We're not counting on the macros improving. We said all along that our ideas trump the macros, and that's particularly true for us given our footprint. So my comments early in the Q&A around Tools in Brazil, I think John asked the question, that's an example of that. I think we might see some macro benefit in Décor and in Cookware as the housing market seems to be moving in the right direction. But quite frankly, the thing that will drive Décor recovery will be stronger ideas. I think the launch of our wood and faux wood launch in Q3 is going to be the bigger driver of our Décor business than the housing market. Same on Cookware. So I'm -- with the exception of our industrial products business, which is probably the most macro-sensitive business, if we're talking sort of normal wobbles in GDP growth, I don't think our portfolio is as sensitive as maybe some might think to this. It's far more sensitive to what we do.

Okay. And then more specifically just so I understand, when you talk about the Office Depot OfficeMax merger, when it does actually happen and is it as big as a 1% impact to your total sales or is it just fairly minimal and it's going to have more of a one quarter type impact?

Well, I think we haven't gotten to a specific number, Bill. But in any given -- and it also depends on how they execute their synergy plan. If they're going to take x -- 100 stores out, if they did it all in one quarter, that would hurt. We'd get an inventory impact. If they did 100 stores over 4 quarters or 6 quarters, we'd be able to manage through that. And so we don't have that kind of clarity yet as to how they're going to handle that. But it is certain that when they take their inventory -- when they take their distribution network and consolidate warehouses and when they reduce their store footprint, we're going to see some backing up of inventories in the system, and that will disable our ability to sell in to their footprint for a period of time. Now I'm hopeful it plays out over multiple quarters. In which case, we won't have to talk about it because we'll figure out a way to manage through that, manage around it. If it happens in a 3-month window, then it could have a material impact. But we'll get some more specific with that as we get through the third quarter and into our full year guidance next year. But it is a real thing that we can't sort of stick our head in the sand on. We got to plan for it.

But it doesn't sound like you're talking about like 3% to 5% growth next year, but it's actually going to be 2% to 4% because of this issue?

Yes, I don't think so. But I don't know until I get more insight from them.

Your next question comes from the line of Olivia Tong with Bank of America.

A question on Baby. You guys touched on it a little bit before. Revenue growth, obviously, continues to do better than expected and you mentioned a couple of new products on -- for both Graco and Aprica, and margins improved as well. So can you update us on how you think about this business and its standing relative to your other businesses within your portfolio? And is it still categorized as incubate at this point?

Yes. Look, I think we -- nothing will change the relative portfolio of priorities through the Growth Game Plan window that we're in. So our Growth Game Plan time frame is through 2017, and the portfolio choices that we've made are sort of fixed in that window. Baby's performance, however, is outstanding, and I think the team deserves -- Kristie Juster, Laurel Hurd, the team deserves tremendous credit for this. And we see similar things starting to happen is Home Solutions. These 2 businesses, these 2 segments are not going to get big advertising and promotion investment. That's the design of the Growth Game Plan. They need to grow with less. And we're attacking the cost structure. The people are coming out of those business and have been for the last 8 quarters, quite frankly. And so these -- both businesses are figuring out how to grow, pulling different types of levers. In the case of Baby, you see what I described. You see the team pulling 2 levers: One much closer and strategic partnering with customers and good in-store insight work, driving better placement and better sell out of the ideas they bring into market; and strengthened partnership with our supply partner, bringing bigger, better innovation to the market. But not big A&P investment. In fact A&P investment in Baby business is down over that time frame and growth is accelerating because they're pulling the levers that are relevant to that category and that drive growth. And so this is the Growth Game Plan in action. The Growth Game Plan has 2 pieces to it: One, a set of businesses that need to grow ahead of their markets with less resource. They need to figure out how to do that. That's Home Solutions. That's Baby. And the sets of…

Got it. That's very helpful. And then just further expanding on the marketing. Now that you obviously have this marketing organization in place, can you talk about changes that have happened since putting that organization in place? And then also, within the Win Bigger businesses, why is -- can you talk about how you decide how to invest? So like in Brazilian sales forces for Tools as opposed to more promotion and activity in Writing, and all the difference things that you go -- that go into the decision-making process on the investment spend.

Yes. It is in -- I'm really transparent about it. It is in part a function of readiness and the ideas and the sequence of ideas into market. And so money flows to ideas, and that certainly is one variable that influences choices in any discrete window. And we have a very, very full Tools agenda in the back half of '13 into 2014, and that is shaping our choices. The other thing that has to be considered is, which businesses will create the scale around which you build your emerging market enterprise. And in the case of the Tools choice, for example, in Brazil, Tools today represents over 80% of our business in Brazil. So of course, we're going to invest in that business as we look to scale our overall footprint. We'll build the infrastructure around the power categories in those respective countries. In Colombia, in Venezuela, it will be Writing. In Mexico, it will be Writing and Commercial Products. And so these are things that influence choices as well. Our priorities are Commercial Products, Tools and Writing in that order. And our growth agenda is based on building share in our home markets, which is largely North America. The exception to that is Baby Japan, is also what we consider a home market. And also extending our footprint into the faster-growing emerging markets in a disciplined and focused way in a select group of categories, which are Commercial Products, Tools and Writing. And so the sequencing is really a function of readiness and money flows to ideas, and we'd look at Mexico, Colombia, Venezuela and Brazil as our footholds in Latin America as we build out a more broad business system.

Your next question comes from the line of Connie Maneaty with BMO Capital.

I was hoping to get a little detail on the third quarter operating margin contraction. Are you thinking it will be flat to slightly down or something bigger like on the order of 100 basis points? My bigger question, though, is will you be spending in the third quarter what you thought you would have spent at the start of the year? Or are Project Renewal savings coming through faster than expected and if this is a pay-as-you-go system you have more money to spend?

Yes. We won't spend beyond what we think is necessary to drive strategic growth. So I mean, I think -- I reserve the right to sort of gear shift as we get into this. But the focus of our spending, just to be clear, in Q3 will be on Writing around back to school; and on our Tools business, as we launch into Brazil this big initiative; and as we execute a much bigger and more exciting National Tradesmen Day event in North America in September; and as we start to market more aggressively, as our distribution builds Hilmor in North America. So again the money is flowing to the ideas. I was very pleased in Q2 on renewal savings flow to the P&L and probably even more pleased with how quickly we saw a step-up in productivity delivery out of the supply chain. And so both of those variables will influence how much we spend and obviously the growth will influence how much we spend in Q3. In terms of giving a specific guidance on operating income margin in the quarter, we certainly could absorb 100 basis point decline in operating income margin in the quarter and still deliver within our guidance range and strategically support the businesses with that level of spend. Do I think that's where the story will end? Probably not. So I wouldn't model that aggressive an investment. Is it flowing exactly as we thought it would? It's actually not because we invested more strategic investment in Q2 than we anticipated, putting some serious money behind consumer research in that window. That money was originally set to flow into Q3. And so we've got a lot of moving parts here. As we're -- as we see room to be able to pull spending forward, we're obviously going to do that, because it sets up our ability to accelerate growth faster than we otherwise would be able to. And so there's lots of moving parts. You got to consider readiness, et cetera. So we saw one advertising campaign the other day that we loved, ready to go. We saw another one that needs more work, and I'm not going to spend behind it until it's ready. And those types of choices could influence sequencing of spending. Does that make sense, Connie?

Yes, it does. And then there's -- I was hoping to get some order of magnitude on the onetime pipeline sale in Brazil in Tools in the third quarter.

Well, we wouldn't -- despite the temptation, I wouldn't give you a specific number, but you should expect us to have a very solid growth performance in Tools in Q3. The challenge in the emerging market is actually to put your finger on it. In North America, I could give you a real number. But you've got 100 different distributors and customers in Brazil that we're selling this 500 SKUs into. And when they choose to take that and accept first shipment, it's something that we -- that can stretch out over a period of time. So it's not like in North America, where you're selling it to home centers and the hardware channel or distributors where you get a big pipeline bump. It's spread a little bit more than you might think in a country like Brazil.

Your next question comes from the line of Linda Bolton-Weiser with B. Riley.

So Mike, when you first came to the company and kind of laid out your strategy, your big picture strategy and how things would progress in phases over a number of years, I think I remember you saying that even in the out years that EPS growth wouldn't be likely to be over 9%, if I'm remembering correctly. And yet here we've got a year still fairly early on where you're projecting 8% to 10% EPS growth. So I'm just kind of wondering how should we think about that. I mean, is it that now we could think about you being a double-digit EPS grower in the out years? Or just how should we think about your original kind of vision on how things would go?

Sure. Look, I think the guidance we issued at CAGNY in 2012 is the guidance we would hold to. Remember, we had a $0.03 onetime tax benefit in Q1 that we said we were going to bank, and that's what sort of drive the higher performance. And so you have to be careful in terms of what you assume going forward. The one thing that we have to be sensitive to, though, as we think about our EPS growth year-over-year is that as we move through the strategic phase to the acceleration phase, we have to make sure that we're delivering EPS growth at competitive levels while trying to drive our strategic vision into action. And so that's always going to be a tension in the system. What we said for the acceleration phase was around 9% -- 6% to 9%, 5% to 8% for strategic phase, 6% to 9% in the acceleration phase. In any given year or a moment, it might be at the lower end or in the higher end. I would hope we could push towards the higher end. Part of what will influence that is what we choose to do with what is a very, very cash accretive business. So our capital allocation strategy might influence that at some point in time. And again, either through bolt-on M&A, which obviously we did not contemplate at all, M&A in or out in the guidance we provided at CAGNY in 2012, we said it was x M&A, either disposals or acquisitions, and didn't contemplate a more aggressive repurchase authorization than the one we currently have in the marketplace, which as you recall, is a $300 million authorization that expires next year.

Your final question comes from the line of Leigh Ferst with Wellington Shields. Leigh Ferst - Wellington Shields & Co., LLC, Research Division: My questions was answered.

This concludes our question-and-answer period. If we were unable to get to your question, please call the Investor Relations team at (770) 418-7075. I will now turn the call back to Mr. Polk for any concluding remarks.

I would just like to say thank you for all your support over the last couple of years, and we are very pleased with the progress we're making. We're entering into a new phase as the -- as most of the disruptive change settles down in the rearview mirror and we get on to operating in the context of the new operating model. We're very excited about the prospects and the possibilities for our business, and we hope to continue to put consistent performance on the board as evidence of that. So thank you, again, and we'll talk to you soon.

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