Ladies and gentlemen, thank you for standing by. Welcome to the Valspar Fiscal 2013 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to our host, Mr. Tyler Treat, Treasurer and Vice President of Investor Relations. Please go ahead.

Good morning. Welcome to our Fiscal 2013 Third Quarter Earnings Conference Call. We have 2 speakers today who will provide insight on our business and the third quarter results we announced this morning: Gary Hendrickson, our Chairman and Chief Executive Officer; and Jim Muehlbauer, Valspar's Executive Vice President, Chief Financial and Administrative Officer. As always, after our prepared remarks, we'll be happy to take your questions. Let me also remind you that comments made by me or by others representing Valspar may contain forward-looking statements, which are subject to risk and uncertainties. Our SEC filings contain additional information about factors that could cause actual results to differ from management's expectations. These filings can be found in the Investor Relations section of our corporate website at valsparglobal.com. And finally, please note that our reported results this morning include non-GAAP financial measures. These results should not be confused with the GAAP numbers in today's earnings release or the GAAP numbers we will report on our Form 10-Q. For GAAP to non-GAAP reconciliations of the reported to adjusted results and guidance, please refer to the supplemental schedules in this morning's news release. With that, I'll turn the call over to Gary Hendrickson.

Thank you, Tyler, and good morning, everyone. Our results in the third quarter continue to reflect the mixed environment that our customers and Valspar have experienced this year in a couple of our key product lines in international regions. I'll focus on the areas of the company that are performing well and provide a progress update on several of our key growth initiatives. In addition, I'll provide perspective on the areas where we're falling short of our near-term plans. We increased sales and continued to deliver very strong volume growth in the third quarter. Sales in the U.S. market have been solid all year and this quarter was no exception. Sales were up mid-single-digits and volumes were up double-digits. The increase was driven by strength in our consumer, packaging, coil and wood product lines. The growth we are seeing in the U.S. is a reflection of the improving strength of the residential housing market and construction spending, coupled with our new business wins. In contrast to the U.S., sales in the international regions have been challenged all year long. While our sales in the third quarter did improve sequentially from the second quarter in Europe and Asia, all of our international regions were below our expectations due to weak end market conditions. Our global general industrial product line remained weak in the quarter. We saw particularly soft customer orders in the global off-road equipment market as some of our largest customers lowered inventory levels, which compounded already weak end market conditions. In addition, the China shipping container market is operating at only a fraction of last year's rates. These were 2 of the major factors why our international results were below our plans. In Australia, our paint business continues to be negatively impacted by a very soft residential housing market.…

Thanks, Gary, and good morning. Consistent with the approach on last quarter's call, my focus this morning will be on the key business drivers and performance metrics related to our third quarter results. I will also cover the drivers behind the updated outlook on the fiscal year. As always, you'll have the opportunity to follow up with Tyler after the call with detailed financial modeling questions. Before we move into the third quarter results, I thought it would be helpful if I first step back and reviewed what we set out to accomplish this year and the key themes that have played out year-to-date. As you know, Valspar's performance over the past several years has been extremely strong. In fact, the company is coming off record results last year, where sales reached $4 billion and EPS improved 24%, driven by improved volumes and industry-leading margins, strong operating income growth and continued benefits from share repurchases. The big drivers behind this performance included significant sales and margin growth in paints, packaging, coil, wood and general industrial product lines, driven by solid end market demand, strong new business wins, pricing discipline and market share gains. We also saw a strong performance from China consumer paints in 2012. In a market where residential construction was down significantly, we generated double-digit volume in the year. We realized benefits from restructuring actions taken to improve performance, exiting a number of unprofitable product lines and customers in the industrial segment. These actions drove very strong EBIT growth in our Coatings segment. Coming out of 2012, the strategic opportunities we saw for long-term growth in our key businesses supported by strong historical financial results provided the baseline for our expectations at the beginning of this fiscal year. In fiscal 2013, we set our plans to continue growing…

[Operator Instructions] And first in line, Dmitry Silversteyn with Longbow Research.

A couple of questions. I'm just trying to understand sort of the shortfall in revenue that you expect versus your expectations and the impact that's having on the bottom line. A $0.20 reduction in mean midpoint of the guidance, which basically means all of it is going to happen in the fourth quarter, implies that there is some margin issues added and that this goes beyond the top line. So can you go through sort of the genesis of sequentially lower EPS that you expect in the fourth quarter, at least judging from your guidance? And then, how are the issues that you're facing now going to be resolved as you head into 2014? And what confidence should we have in your performance returning to the old Valspar standards?

Sure, Dmitry, it's Gary. Your first question. So I'll take your number of $0.20, and we'll work with that for a minute. $0.05 of it is tax, all right. As Jim mentioned, we're going to have a higher tax rate in the quarter than we expected and you probably modeled, so that's part of it. The rest of it is entirely sales-driven. When we adjusted our guidance after the first quarter, we expected that in Q3, Q4, we were going to see some recovery in international markets and in our GI business. I think Jim covered this in his prepared remarks. We didn't see that. We didn't see China strengthen to the extent that we expected. Our industrial business in China is still weak. And frankly, although our end had a good quarter this quarter, it's not up to the expectations that we had for Q3, and we don't think Q4 will be there either. Australia, we expected some recovery in the residential housing market in Australia. That has not happened. In fact, it's possible that, that market has gotten worse as the year has progressed. And both in my remarks and in Jim's remarks, we talked about the GI business and some of the segments that are weak there. So as you know from following the company for a while, that we've done a lot of work on our cost structure to develop operating leverage in the business. And so it doesn't take a lot or a huge sales miss in order to have an impact, disproportionate, possibly as you might look at it, disproportionate earnings miss. So that's it. It's all about that. It's all about sales in the fourth quarter that will not be where we expected them to be when we adjusted our guidance after Q1.…

Okay. That's helpful, Gary. I just want to clarify, the shortfall in revenue versus expectations, I'm not sure what you were expecting, but looking at what I was expecting, which is basically high single-digit growth year-over-year in revenues for the fourth quarter, your guidance does not seem to be that significantly below it, so is the matter here that you're going to be selling more out of inventory rather than production so there is going to be a disproportionate margin impact on that slightly lower revenue, and just sort of rightsize towards the end of the year, is that what's going on?

Yes, Dmitry, it's Jim. I'd answer that from the perspective of our expectations for the back half of the year as we exited Q2 had significant increases in sales based on the new business wins that we've been talking about all year long, plus the recovery in the markets that Gary mentioned. So from a sales expectation standpoint, we were expecting much higher sales. We also were expecting an appropriate margin rate that was going to go along with those sales. So as I look at where Q3 landed and what we expect for Q4, our margin expectations versus our internal plans really haven't changed that much between Q3 and Q4. Really, our miss versus our expectations is primarily sales-driven, as Gary mentioned. So we're not seeing any big surprises on the margin line. It's just that the businesses that we're selling through based on their current margin profile are lower than what some of our historical businesses have been. It's still very profitable, but we do not have a margin issue this year versus our plan. Our issue was top line-orientated.

Okay. All right. So the top line -- okay, so maybe the way to put this is the top line shortfall that you're experiencing is in the higher margin product lines, so you're not getting the profit benefit of the perhaps faster growth at the lower margin lines?

Correct. It takes more profit volume from the lower margin lines to make up for those gaps. And once again, we know those markets are going to turn around eventually, because structurally, we've not lost business in those spaces. And we're expecting certainly a long-term profile of growth in many of those markets, especially GI, with good customers and good markets like China to recover.

Just one other point on that, Dmitry. I think, we've got a sales – I mean we've had a sales mix issue all year long. The Private Label business, we've talked about some of the wins in packaging coatings being at the lower selling prices. But if you look at our margin rate in coatings, you'll see that, that's still good business. As Jim said, it just takes more of it to make up for the gaps that we've seen in some of the higher-priced, higher-margin segments that are weak this year.

Our next question is from Kevin Hocevar with Northcoast Research.

I was wondering if you could comment on kind of a longer-term outlook for Australia, because it looks like some of the data has been pointing to interest rates have been cut over there, home price has increased the most in years in the second quarter, existing home financing seems to be improving. So it doesn't sound like that's being reflected in your numbers. So kind of what's your outlook here over the next 18 months or so into 2014 for your Australia Paints business?

Well, you're right. I think the interest rate in Australia now is 2.5%, down from something like 7%. So the government is doing everything they can to stimulate the housing market. But the housing market is still bad. Kevin, we get Australian Paint Manufacturer Federation data, which is the actual volumes of paint that are sold by all the paint manufacturers in the Australian market, and that data last quarter said that trade volumes, that's professional painters' volumes, were down 8% to 9% on the previous year. So hopefully, we're at the bottom and some of the moves that the government is making to stimulate homeownership will take hold, but we can't count on that. We're going to run our business the way that we think is appropriate. And for us, that meant pretty dramatic, and over the last couple years, a pretty dramatic restructuring of the business to get the cost structure right. We lost some market share in that process. We've talked about that previously, that was the right thing to do for the long term. Where we sit today, it's a business that has the appropriate cost structure; that is winning in the retail marketplace, that means with the big box masters and independent trade stores, or independent paint stores and hardware stores, that's our retail market there, and that business is doing well; and the stores business that has the right cost structure and when it grows, we're going to get significant operating leverage out of that cost structure. Jim said and I said in my opening remarks that we saw some incremental improvement in our stores business in the quarter, that's encouraging. As that continues and as the market recovers, we're going to see a pretty significant earnings drive out of the actions that we've taken. But I can't call the market. I mean, I don't know. I would only be speculating. To answer your question directly, I would only be speculating as to what's going to happen in Australia.

Okay. And also, I was wondering if you could comment on kind of the sellout from your customers at the big box and distributor network here in the U.S. versus kind of your sell-in. Are you seeing any inventory management out of your customers in that channel at all or is it pretty standard right now?

Well, our customer, our big customer is managing their inventory extraordinarily well. They've got a great supply chain team and they're getting productivity on their inventory. The impact for us meant that year-over-year inventory is down about 10% in that channel. We are seeing strong sell-through. As I mentioned, mid-single-digit sales of Valspar products in that channel. And I think inventory today is appropriate for where it should be going into the remainder of the painting season. But there is a change year-over-year for us.

Okay. And then, finally, I just wondering if you could comment on how -- what raw materials did during the quarter and kind of outlook going forward?

Yes, our outlook on that, Kevin, hasn't changed at all. Raw materials in the quarter were down modestly. We've looked at the different parts of the raw material portfolio, and as always, there's different moving pieces, but our view on that for the year really hasn't changed at all. We've pretty much been on our mark.

Our next question is from Jeff Zekauskas with JPMorgan. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: The paint operating profits were roughly flat year-over-year. And so under normal circumstances, if your volumes grew mid-single-digits, I don't know, that would be $20 million to $25 million, your incremental margins should be 50%. So shouldn't your paint operating profit be up $10 million or $11 million year-over-year in the quarter? And so what's the hole? Where's the profit leaking out?

There's no profit leaking out. As we've talked before, Jeff, about our plans for the Inver acquisition. We're selling Private Label paint at Ace. We make virtually no money on that today. We've got to restructure our operations, which was the subject of the second quarter restructuring announcement that we made to get our cost structure to the point where that's a profitable business. The Ace business really becomes profitable for us when we start selling Valspar paint. And so that's one issue. So frankly, 0 incremental profit on the Private Label. And then, we are making investment ahead of sales in Europe, the B&Q initiative, we've only got 30 stores set but we've got a full team of people ready to roll out our program into the other 320 stores. And we have investments that we've made prior to the rollout of the Valspar [indiscernible] with Ace. Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division: Okay. Second question is when I look at your cost of goods sold year-over-year, it's up about 1%. And so, if your volume growth is up some mid-single-digit number, why isn't cost of goods sold up more?

Yes, it's essentially the same mix of business as Gary's discussed, the Private Label mix of product, the cost of raw materials that go into that product line, plus the commodity trends that we have seen in the business have also impacted the mix of what's hitting the cost of goods sold line.

And we'll go to the line of Ghansham Panjabi with Robert W. Baird. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Going back to the margin issue and looking at Coatings, looks like operating margins were up nicely year-over-year during the quarter, it seems like a slightly different trend line than the last couple of quarters. Can you sort of take us through the drivers for that expansion, maybe some of the restructuring costs, are they starting to flow through, is it raw materials or business mix?

Well, it's 2 things. It's productivity programs that we're running continuously, Ghansham, and it is operating leverage on the increased volume. Ghansham Panjabi - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then, on the Paint business, how much did the B&Q rollout to the 30 stores add to the volume profile for the quarter? And can you also give us some more color on Lowe's Pro and how the market reception is towards that product?

Sure. B&Q is immaterial, really. It's only 30 stores and we may have even shipped that in the second quarter, I'm not sure, but it was a very small amount of paint. And with respect to the professional program at Lowe's, I would say that we've been in the stores now since April. We have our full team in the field now. Just recently, we completed the buildout of our team. And I would say, from my perspective, we're hitting our targets. We have internal targets and we have agreed targets and we're hitting those targets.

And we'll go to the line of P.J. Juvekar with Citi.

Actually, this is Dan Jester sitting on for P.J. Can you -- is there any update into how many stores, Ace stores, the Valspar brand will be rolling out in, in the fourth quarter? Or is that still under discussion?

As I mentioned in my opening remarks, Dan, we're ahead of our internal targets for that. But we're not going to talk about that probably for a couple of quarters.

Okay. And then, for -- in general industrial, you talked about weak demand, talked about raw material pressure maybe not being that strong, is there any risk that we're going to see pricing falling in the next couple quarters, or is this mostly going to be volume-driven in terms of the slowdown in sales?

I think about that in terms of price cost. And we're in reasonable shape in terms of price cost today. And I would expect that in the future, we'll be in a reasonable place with price cost. So that's not a top-of-mind worry for me.

And we'll go to Robert Koort with Goldman Sachs.

I would guess, given some of the caution you've suggested around near-term trends, people are going to be quite focused on how you perform the next couple quarters. So a couple questions around that, if I could. You mentioned, Gary, that B&Q slotting 30 stores didn't really give you much of a revenue or any earnings bump. Does slotting 300 do that for you? And I'm curious, what kind of turnover do you get in that kind of retail base? I mean, should we expect the first plug is going to help or is it less consequential to multiple turns during a paint season?

You always ask complicated questions, Bob.

That was hard just to ask it.

Here's the simple way that I think about it, which I've said with my team here. B&Q right now, so 30 stores is nothing. It's less than 10% of what we're going to ship. And honestly, we could have shipped that paint in Q2 to get ready for it. So that had no impact in the quarter. However, 100% of the expenses that -- almost 100% of the expenses that we'll incur at terminal volumes are in the business today. And we have 0 gross margin from paint sales to support that expense. And so the way I think about this model is as we start shipping paint, we're going to earn gross margin and that expense delta to -- eventually, the lines are going to cross and we're going to start making money. Now keep in mind that B&Q is not the most significant of the profit drivers that we're looking forward to in 2014. Essentially, B&Q is going to be slightly better than breakeven in 2014, if I remember right. We start making money in B&Q in '15. That's why in our opening remarks we called out '15 as the year when all these initiatives are fully realized. The other 2 key initiatives in our consumer paint business will be profitable in '14.

Yes, the benefit we get from B&Q next year, Bob, is that we just don't -- when it compares to the results for this year, we don't have the drag of the upfront investment for the same magnitude. So Gary is right, expecting essentially a breakeven performance next year but that's coming off of a year where we purposely made investments to grow that business for the long term.

Okay. And can I ask, Gary, you mentioned in Ace Private Label, you make no money. I guess, I'm a little surprised at that, given you have some consolidation opportunity there, and I would guess you wouldn't be buying a business that couldn't make you some money. So what's going on there? And then, can you give us a sense of the Valspar national brand price point and what it would be versus the Ace Private Label price point?

Well, the second part of it, Bob, has to be agreed and all those things are still working. But I think if you look at the price points that we have in our independent channel, the distribution that we have in our independent channel, it would be similar to those price points. With respect to Private Label, the way we bid was private label is low margin and we -- in order to achieve that low margin, we've got to complete the restructuring actions that we announced in Q2. So as those things happen, and they started and are on track, but as those cost reductions are realized, then we start making money on the Private Label business. Tyler will help you privately model that a little bit better.

It's just that the upfront volume that we're selling, based on our agreed price with Ace and the current infrastructure that's in place, basically doesn't allow us profit margin. As we make those restructuring efforts that Gary talked about, we get to a profit margin in the Private Label business that's commensurate with what we expect the Private Label product to have in the marketplace.

The return -- if you just isolated the Private Label business from the branded business, the Private Label business would be good business for us. It is not -- we didn't sell our souls to the devil on the Private Label business to win a contract on the branded business.

And we'll go to John McNulty with Crédit Suisse. John McNulty - Crédit Suisse AG, Research Division: Just a quick question on the incremental cost that you're taking. And when I look at your SG&A line, it's actually down year-over-year a reasonable amount, especially considering all these investments. So I guess, can you walk us through where those investments are actually hitting? And maybe the magnitude of them?

Yes, John, it's Jim. There's a couple components, if you recall, in the SG&A, that are masking some of the cost increases and I tried to refer to this in my comments. Two specific things that I would point out is that given our updated view of expected performance for the year, you would expect that we have been truing up our bonus and incentive expectations commensurate to that performance. So we're seeing lower bonus expense versus last year flow through the SG&A line, which is masking part of it. The other thing we've talked about in previous calls is that we've got some geographic changes between expense and gross margin related to programs that we had in place historically to support advertising spend with our big box customers. So while that had no impact to the bottom line, it results in basically a little lower SG&A expense this year than last year. So if I look at that, it's basically a re-class item plus the lower incentive comp, that's masking any increases that Gary talked about in the go-forward investments that we're making behind Ace, Lowe's Pro and B&Q. John McNulty - Crédit Suisse AG, Research Division: Okay. Fair enough. And then, just one last question. On the incremental investments like for some of these growth platforms, how much of them are kind of onetime-ish or last a year or so in nature and how much of them are just permanent, and then you really just need the volumes coming through?

Yes, I think, there's combination of both. I would put more of them in the -- I'd say about 60% of it in the camp that's going to be ongoing for sure that we just need the volume and margin dollars to come along with. Certainly, the beginning expenses for some of the manufacturing efforts we're doing and things of that nature will be one-off in nature.

And next, we'll go to Nils Wallin with CLSA.

A question on -- back on Ace, if your contract is such that your price and volume are set so you're not making any margin, what's going to allow you to make that margin in the go forward, is it capacity rationalization? Maybe the -- will that contract change? Just hoping for some color on what will allow you to generate margin in the Private Label business with Ace?

Yes, so appreciate the question and the follow-up if there's confusion there. So I'd probably start with an umbrella view that we're going to make money in the Private Label business and the branded business for Ace, and we're very confident about that model. The way it works from a phasing perspective is essentially we're starting by selling in the Private Label business and then obviously we're going to be selling in the Valspar business. From a cost prospective, what we announced at the time of the Ace transaction was the fact that we were going to be restructuring some of their supply chain and manufacturing operations. We are in the process of doing that already. When we get that work done this year, we'll have a cost structure that allows us to make a nice margin on the Private Label business. So our comments this morning have really been focused on the temporal investments that we've had to make this year as part of the transition in acquiring those assets and the rationalization process that we're going through.

Got it. Now last quarter, it sounded like the expectation was the heavy machinery market had reached about and certainly wasn't going to go any lower, updated expectations seem that maybe that was a bit sanguine. Curious as to how you think about the cyclical versus secular trends in heavy machinery certainly and particularly in North America, given what many people seem to believe would be sort of a peak in the farm profitability, and hence, the CapEx cycle, at least for farm equipment going into 2014?

Good question, Nils. There's 2. So heavy equipment. There's agricultural equipment, and then there's off-road, so that's mining, construction, et cetera. The weakness that we're experiencing in our business is in the latter, not so much in the former. And our business is heavily skewed towards the latter, not the former. So if you thought about cyclical versus secular, we think it's a cyclical -- this is a cyclical trend that we're in. We've been here before and we've always come out of it. The one place where you might -- some people might disagree with that would be in the mining equipment space. If you believe that growth in China is permanently at -- reset at a lower rate and Johnny doesn't need iron ore and other materials to keep building, then you could argue that it's secular. But where we are and where our customers are and our customers -- our big customers have been very transparent about this, is that this is a cyclical trend, not a structural one.

And next, we'll go to Charles Dan with Morgan Stanley.

Gary, I think you mentioned earlier in the call that you can't call the macro or the market that seems like that was the real delta in the guidance. My sense, and perhaps it was the wrong one, last quarter, was that you guys were very confident that you would see the sequential improvement in the business overall in the fourth quarter. If that's -- so I guess my question, as you look forward to 2014, in thinking about how you communicate with us and your investors, do you need to be giving annual guidance, in your view? And what are the puts and takes as you think about that?

We're going to give annual guidance. And Charlie, the -- we're still going to grow in our fourth quarter. We're going to have nice growth in our fourth quarter. This is going to be a record year for Valspar, on the top line and earnings. It's just not going to be the record that we expected it to be. And if you think about the size of our company and what our revenue miss will be in the fourth quarter, while it's disappointing, I think I've explained that with the leverage that we have in our operations today, it doesn't take much of a revenue miss to come up with a significant earnings miss. And that fundamentally is the issue. So we had -- what we didn't expect in the third quarter, back to your question about our optimism, we didn't expect the inventory destocking that we've seen. We -- our customers believe that the -- particularly in off-road, believe that sell-through was occurring. In fact, what was happening is that dealers were destocking inventory and manufacturers were destocking inventory. And this is, I think, a global phenomenon in that market. And that is the fundamental thing that we didn't anticipate. We also did, and I'll say this, we did believe the rhetoric that China was going to get better. We did believe that with the new leadership in China, there would be stimulus that was pumped into the economy that would make the Chinese economy stronger than it has been. Not -- so those are the -- and if you parse the mess, those are the 2 fundamental drivers of the mess. But in terms of annual guidance, we're going to give it and we're going to get close to it.

And just a follow-up. The quarter itself, I think, to your earlier point, the Coatings business margins were actually very good, given the sort of end market weakness that you guys have seen. But I think that the paint margins were below what most people expected. And I understand that a lot of that's due to the investments that you're making in your new business. As we think -- and that those will be accretive in 2014. But as we think about the pace of those investments and the scale up, how should we think about how quickly those improve, I guess, going forward?

Yes, there's a couple of -- Charlie, it's Jim. There's a couple of things that we'll learn from that, and we'll get more visibility as we go through the fourth quarter, along the lines of how the Valspar paint program at Ace works for instance. But if you helicopter up and look at the margins, to your point, in the paint business. Year-over-year, we're expecting margins in the paint business to be essentially flat. That's after growing 100-odd basis points last year. So given the influx that we've had this year of the Private Label volume with Ace and the startup expenses, to be sitting here at year-end, our expectation is to be flat year-over-year in EBIT margins, we feel good about that. We had expected more because of more top line growth. As we get into next year and we see more profitable volume coming through the Ace business based on the branded sales as we get leverage on the investments that we've made for B&Q and Lowe's Pro and things of that nature, we're looking for next year to be a year of expanded operating margins in the paint business. So I'd say our 2-year view of the business margins are still the same. It's just going to be a little choppier to get there where we've seen the back half of this year fall off from a volume perspective.

And we'll go to the line of Dave Begleiter with Deutsche Bank.

Gary, strong performance in packaging, driven by these non-BPA -- BPA-free coatings. How much longer can this outsized performance continue do you think?

Well, at least through the first half of next year, as most of the new business wins that we've won, David, have come in the second half this year. So but our long-term view on our packaging coatings business is very bullish. We have an opportunity, as we -- particularly as this non-BPA market continues to grow, we have an opportunity to become more significant in a couple of key markets where we don't believe that we have our fair share, and those are Europe and in Asia. So this business has traditionally grown at 2x the market rate. I think, if you went back over 10 years and looked at our packaging coatings business, that's been our history, we're the global leader, we have more infrastructure, both in terms of technology resources, tech service resources and regulatory resources than any of our competitors, and we expect to keep winning in this business.

Very good. And just on U.S. paints, what's your forecast for the growth of the U.S. paint volumes this season year-over-year?

We don't have -- I don't know. We tend to think about it in terms of comps. So strength -- so I don't know the volume number. But we thought that we would have comps in the sort of low single-digits, 2%, 3%, 4%, we're experiencing better than that at the moment.

And just lastly, Gary, on Inver, $0.10 of accretion from -- in 2014, aided by the restructuring. How much more in '15? Is it $0.15, $0.20 in that range or…

Yes, we'll lay that out at a later date. But you would imagine it would go up. I don't imagine, I know it will go up, based on the full year realization of synergies that we'll have going in 2015 and before, not only from the Inver business and those back-end savings that we expect to generate but also getting the full year benefit from the European restructuring actions. So in this market, given how the market performed and we performed this year, we've been taking actions to improve the cost structure for the long term. You saw us in Q2 announce important restructuring actions based on what we were able to do with the Ace business and restructure our North American business, we're doing the same thing now in Europe. We're encouraged that Europe feels like it's starting to stabilize from our standpoint. Certainly, Giovanni and the Inver team have done a fabulous job of growing that business during the last 4 or 5 years, so we're very encouraged around what the scale and leadership of that team can bring to our European operations in total. So we expect Inver is going to provide us benefits above and beyond just the Inver business, but just our European business in total over the next several years. And we have time for one last question.

And that'll be from the line of Steve Schwartz with First Analysis.

Just one question. And this is if you could add some color to the off-road and container situation, shipping container. It sounds like that adjusted for seasonality, those 2 product lines are essentially running flat sequentially. So the declines are no longer increasing, is that true?

Well, that's probably true for off-road container, it's at the bottom. Containers are at the bottom. I think, Steve, I think, last year, we were supplying 7 plants at this time; today, we're supplying 1, and the reason is the other 6 are not operating. So there are very, very few shipping containers being manufactured in China today. That obviously is not going -- a situation that will not persist for too much longer, I wouldn't think, since global trade continues, ships -- shipping containers wear out, they get washed overboard, the industry will need more shipping containers. When that happens and how much inventory there is, I don't know. But we're not going to stay where we are indefinitely.

Okay. So you say container, you think is at a bottom. You don't think off-road is at a bottom yet?

We don't know.

Okay. Can you give us an idea of when you guys started to see the significantly negative comps? When do you think you're going to anniversary each of these product lines with the weakness? I mean, it's going to be somewhere in '14, right? Is it the second quarter, third quarter?

Yes, it's Jim. I would tell you, helicoptering up from a container business perspective in the overall impact for the company, it's not just that material until we get the future growth that Gary talked about. If you're looking in the off-road segment, we've actually seen declining comps all year long. But they've gotten -- they've improved as the year's progressed. So we'll anniversary a good chunk of the declines through the first half of next year.

Operator, that's the last question?

It is. Please go ahead.

Thanks, John. Thanks to our audience for participating in our third quarter earnings conference call. Follow-up questions from investors and analysts can be directed to me, Tyler Treat. Questions from the media can be directed to Mark Goldman. Contact information for both of us is on our press release. Thank you, and that concludes our call.

Ladies and gentlemen, this conference is available for replay. It starts today at 12:30 p.m. Central, will last until August 27 at midnight. You may access the replay at any time by dialing (800) 475-6701 or (320) 365-3844, the access code is 299293. That does conclude your conference for today. Thank you for your participation. You may now disconnect.