Good day, and welcome to the VF Corporation Fourth Quarter Fiscal 2012 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Lance Allega, Director, Investor Relations. You may begin, sir.

Thank you, operator. Hello, everyone, and thank you for joining us today to discuss VF's fiscal 2012 fourth quarter and full year results. Before we begin, I'd like to remind participants that certain commentary included in today's prepared remarks and the Q&A session may constitute forward-looking statements in the definition of the federal securities law. Forward-looking statements include management's current expectations, estimates and other projections about our business, results of operations and the industries in which VF operates. Actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from those projected in the forward-looking statements are discussed in the documents filed with the SEC. Additionally, participants on today's call may discuss non-GAAP financial measures. You'll find the appropriate reconciliations in our press release, which was issued about an hour ago, and on our website at vfc.com. Joining us on today's call will be VF Chairman and Chief Executive Officer, Eric Wiseman; Bob Shearer, our Chief Financial Officer; 2 of our Group Presidents, Scott Baxter and Steve Rendle; and Karen Murray, President of VF Sportswear; and Susan Kellogg, President of VF Contemporary Brands. Karl Heinz Salzburger made the flight and is here in North Carolina today, however, he is sick and unable to join us on today's call. So Steve, Scott and Karen will be filling in appropriately for his parts. Following our prepared remarks, we will take your questions. [Operator Instructions] I'll now turn the call over to VF Chairman and CEO, Eric Wiseman. Eric?

Thanks, Lance. Good morning, everyone, and thank you for joining us. To set a little context for today's call, we thought it was important to spend a bit more time on our expectations for 2013 and specifically, the strategic initiatives we're concentrating on to drive continued growth across our portfolio. So as a heads-up, today's call will run a bit longer than normal, and as Lance said, we'll allow ample time for questions at the end. Let's get started. 2012 was another year of records for VF: record revenues, record margins, record earnings and record cash flow from operations. It was a year that revealed many strengths of our company and many advantages to our strategy and our business model. In fact, VF has unique strengths in our industry, including a diverse portfolio of more than 30 brands, with innovative and relevant products capable of reaching the broadest array of consumers in every market; deep strategic insights, validated by comprehensive research that yields increasingly greater returns on our marketing investment and ability to attract -- to connect with consumers; an obsessive focus on continuously improving our operational capabilities to drive growth and strong consistent returns to our shareholders; and finally, a highly efficient supply chain that includes owned and sourced manufacturing, which gives us unparalleled structural advantages, including product innovation, speed to market, low cost and outstanding quality. Individually, any one of these strengths would be an enviable asset for any company to have. Yet together, in concert, they're at the center VF's DNA and what allows us to be so successful. Now let's take a look at how some of these strengths played out for the year just ended. Total revenues grew 15% to $10.9 billion or 17% on a constant dollar basis, including organic growth in every coalition,…

Thanks, Eric. I'm going to start with a reminder. This is the first quarter where we completely anniversary the Timberland acquisition, so all fourth quarter commentary reflects organic performance. Total revenue growth was 4% in the quarter or 5% in constant dollars. And as in the last 2 quarters, revenue comparisons were negatively impacted by about 1% from the sale of John Varvatos. Excluding the impact of John Varvatos on our Contemporary Brands coalition, every VF coalition worldwide achieved higher revenues in the quarter. Also, we significantly expanded both gross and operating margins in the quarter. Our gross margin increased 220 basis points, reaching 47.4%, an all-time high for any quarter in VF's history. Every coalition achieved a higher gross margin. As you might expect, the biggest increase came in our Jeanswear business, where we continue to move closer to our historically stronger gross margin levels, following the volatility created by rising cotton costs over the past couple years. And of course, our gross margin increase continues to reflect the shift in our mix toward higher-margin businesses. And that's particularly true in the fourth quarter, given our growing retail store footprint and expanding e-commerce business within our higher-margin lifestyle brands. The positive dynamic of expanding gross margin driven by the faster pace of growth in our higher-margin businesses has been and will continue to be a key component of VF's earnings growth story in both 2013 and in years to come. The increase in adjusted operating margin in the fourth quarter, that is excluding the acquisition-related expenses for Timberland, was even stronger, up 280 basis points and reaching 15.1%. And a comment on our tax rate, which was right in line with both our expectations and the fourth quarter of the prior year. Our fourth quarter rate is a little…

Thanks, Bob. Outdoor & Action Sports is VF's largest and most diverse coalition. Our coalition's portfolio of brands is purpose-built to engage the passions of a wide variety of activity-driven consumers around the world. In 2012, global revenues for The North Face were up 9% or 11% on a constant dollar basis, including a 13% increase in the brand's DtoC business and double-digit growth, both in the U.S. and internationally. In 2013, we expect The North Face's global revenues to grow at high single-digit rate. Despite customer caution following 2 consecutive warmer-than-normal winters in the U.S. and challenging conditions in Europe, we are confident in our plans to deliver solid growth and reach another year of record revenues for the brand. The North Face brand is stronger than ever. We continue to win against our competition, and we intend to keep winning. Coping with current market dynamics has revealed the true strength of The North Face brand and its strategies, specifically, our activity-based model and our advanced product platform. A little more than 3 years ago, we introduced the activity-based model, reorganizing our business around 4 categories: action sports, performance, outdoor and youth. We've successfully broadened our product offering and extended our consumer and customer base. Today, The North Face is a brand for all seasons with a growing footprint in brand-relevant category extensions. And honestly, we're just getting started. Two years ago, we also upped the investment behind our advanced product platform and accelerated our efforts to create next-generation products to drive consumer demand in all categories. You can see the results of this investment in the success of Flash Dry, our moisture management material technology launched last fall that lets the consumer stay drier and warmer in a broad range of environmental conditions. It sold in and sold…

Thank you, Steve. Good morning, everyone. In 2012, global revenue for VF's Jeanswear business was up 2% or 4% in constant dollars, a performance that reflects a mid-single-digit increase in the Americas. In addition to the top line story, there is also a story of improving profitability for both Wrangler and Lee in every region of the world. Long-term growth prospects for our Jeanswear business remain strong. Near term, we'll be navigating challenging macro conditions globally. We're expecting modest growth in our global Jeanswear business this year, with our focus, front and center, on consumer-centric product innovation. Our pipeline of new products for 2013 and beyond is designed to bring style, function and performance benefits to consumers in all channels and regions. Starting with Wrangler, our highest-margin Western Specialty business should continue its momentum in 2013. Product innovation lies at the heart of our success in this business, with a portfolio of products to meet customer needs from Premium Performance Cowboy Cut for authentic cowboys to the Wrangler 20X Competition Jean for the more aspirational western lifestyle consumer. Not only are our key retail partners adding doors, but we're also growing our business outside the Western channel into sporting goods, outdoor and regional mid-tier locations. 2013 should also mark another year of growth for our Mass business, driven by new products like Wrangler advanced comfort, which features denim that is both stronger and more flexible. We're also seeing great success with our Wrangler tops program. We also expect double-digit constant dollar growth in Wrangler Latin America to continue, fueled by retail expansion in Argentina and Chile. Wrangler's business in Europe remained challenging in 2012, although our profitability continued to improve. In 2013, we expect further improvement of profitability and are looking forward to the launch of a new product innovation,…

Thank you, Scott. We're expecting revenues for the Sportswear coalition to increase at a high single-digit rate in 2013. Let's look a little deeper at where that growth will come from, starting with VF's sixth largest brand, Nautica. In 2013, revenues for the Nautica brand are expected to grow at a high single-digit rate. Nautica's key growth initiatives for 2013 are direct-to-consumer expansion and product innovation. Nautica's direct-to-consumer channel should see double-digit growth in 2013, driven by double-digit comp store growth, new store openings and exceptional e-commerce growth of over 50%. In fact, we plan to launch an entirely new Nautica website this year, a timely event given our 30th anniversary of the brand. Our next growth initiative is product innovation. We are continuing to develop a performance platform to differentiate the brand and provide new value to consumers. Products that feature water-oriented performance features, such as moisture-wicking, water-repellence and breathability currently make up 35% of our assortment. This will grow with the full 2013 introduction of elevated fashion performance products. In addition, we plan to expand our jeans offering in all doors to gain share in denim and with younger consumers. One final note on Nautica before I move on. We also expect heavy -- healthy double-digit growth in our licensed international business as we expand into 3 new emerging markets: Turkey, Russia and Brazil. Although we don't normally talk about Kipling, which is part of the Outdoor & Action Sports coalition internationally and Sportswear in the United States, the brand has become an increasingly larger and more important top and bottom line contributor for VF. Kipling is a fun global handbag and accessories brand with incredible strength. And as excited as we are about its near-term success, we're even more excited about its long-term growth prospects. In 2013,…

All right, everyone, rest assured, we're almost done. In 2012, excluding the John Varvatos brand, which we sold in April, Contemporary Brands North America revenue were up 9%, with solid results from 7 For All Mankind, Splendid and the Ella Moss brands. In 2013, we're expecting our high single-digit growth to continue, starting with 7 For All Mankind. The brand's key growth initiatives are similar to what you've heard throughout the call today: Product innovation, direct-to-consumer expansion and deeper engagement with the consumers. On the product innovation front, in 2013, we plan to introduce 2 new fabric innovations: Slim Illusion second skin for women and lux performance in casual denim for men. Slim Illusion second skin is a proprietary denim with 100% elasticity, which means it will keep its shape, fit and feel throughout the life of the product. Lux performance is stretch distressed denim for men that combines the rugged look men want with unsurpassed comfort while also returning -- retaining its shape for the life of the product. Next is direct-to-consumer expansion, fueled by high single-digit comp growth and expected 20% increase in e-com revenue. We're also excited about launching our China website later this year and are looking forward to engaging consumers in this important market. Finally, we're creating deeper engagement with consumers by telling evocative stories in a new way, enabled by digital technology and social media. Building on our success from last year, we're bringing back Oscar-nominated actor and film maker, James Franco, to create our 2012 marketing campaign. But there's a new twist. Instead of making films that you simply watch, we've created a new interactive experience that allows consumers to view the story one part at a time and vote on how they want it to unfold. We'll use this content to surround our millennial consumer and build our brand affinity and fuel our top and bottom line growth. Next, our Splendid and Ella Moss brands that, on a combined basis, continue to post strong double-digit revenue growth year-after-year. Splendid's growth will be driven by aggressive DTC expansion. In fact, we expect DTC revenues to nearly double for the second consecutive year. We plan to open more than 15 new owned stores in 2013. Every store helps drive healthy brand awareness, which we know helps us win in all of our channels. Splendid and Ella Moss are just getting started, and the pace of their growth is very encouraging. And when you combine the potential of fast growing brands with VF's scale, distribution and operational efficiency, we believe we have a tremendous opportunity for future growth. In summary, we're looking forward to a great year of combined and continued brand momentum, coupled with game-changing innovation across all of our Contemporary Brands. And now I'll hand it back over to Eric.

Thanks, Susan. That concludes our prepared remarks. But before we open the line for questions, I'd to take a moment to thank a member of our team, who recently announced her decision to retire at the end of March, Cindy Knoebel. Cindy began her career at VF in 1993 to establish our vendor relations function. Over the last 20 years, she's continued to add new responsibilities to her role, including corporate communications, public relations and sustainability. Throughout her career here at VF, Cindy's communication skills and strategic insights have been instrumental in building strong support for VF's strategic transformation by fostering strong relationships with the company's employees and investors and the media. Almost everyone on this call knows Cindy, and many of you know her well, so you know she'll be greatly missed. Please join me in thanking Cindy for everything she's done for us and for you. And we're wishing her the very best as she begins a new chapter in her life. And of course, you already know Lance Allega, our Director of Investor Relations who joined us last time -- last year at this time. He will now be leading VF's investor relations functions, so also join me in congratulating Lance. And with that, operator, let's open the line for questions. Cindy will be happy to take all of your questions today.

[Operator Instructions] And our first question, we'll hear from Bob Drbul with Barclays.

Cindy, congratulations.

Thanks, Bob.

I guess, Eric, the 2 questions that I have, I guess, relate around the Outdoor business a little bit. When you look at the top line that you've driven, especially at The North Face versus the industry, it's been pretty impressive. And I was just wondering if you guys can comment around inventory levels at retail, mainly around The North Face. But I would also be interested just to understand inventories of Timberland product and especially as it looks to the mid-single-digit growth rate for 2013 that you expect in Timberland.

Yes, Bob, Steve will take that question for you.

Yes, so Bob, inventory, I mean, the channel, we really have 2 stories here, the TNF inventory is higher than we have seen historically. I think the good news is the last 4 or 5 weeks since December, week 5, cold weather has returned to much of the U.S., and we've seen really nice increases in retail sell-through. Timberland really came through, fourth quarter, in a much, much cleaner situation and enters this year with very clean inventories in all of their channels.

And then what we'd also say there, Bob, is that in Europe, inventories are probably a little cleaner than that, a little better shape.

And next, we'll move to Kate McShane with Citi.

With regards to The North Face and maybe any potential changes that could be anticipated over the next couple of years, how should we think of your product mix flowing throughout the winter season? Does it impact margins at all? And are you converting or changing your sourcing with regards to The North Face in the near term?

Yes, Kate, so I'll take that one as well. The product mix stays very similar to what you've seen in the European market. Cold-weather apparel continues to be very important, especially in the northern region and some of the emerging markets. Here in the U.S., and as well as in Europe, we do see an increase in more contemporary athletic silhouettes which will, we believe, with our focus on the activity-based model and the learnings we have from our running, training [ph] business, we're well on the forefront of evolving our collections to meet that new consumer demand. We do see an increase in the lighter weight, what we call transitional weight insulated goods. That's made of synthetic insulations, down insulations, as well as fleeces. And again, we're well on the path of being on the front end of that trend. Margins in these categories remain the same, so there really is no change there. And our sourcing model here in Asia, as well as here in the Americas, remains the same and is well placed to be able to service what we consider will be increasing demand.

Kate, I'll add one thing to that. If you think about the short term, the next 12 months for The North Face brand, our fastest growth rate will be in Asia, followed by Europe and followed by the U.S. Another way to slice that is to say our direct-to-consumer business is going to grow faster than our wholesale business. All of those facts point to higher margins for The North Face. The mix in geographies and the mix in channels will -- should expand our gross margins next year -- gross and operating margins next year.

Okay, that's great. And I forgot to say congratulations to Cindy and to Lance.

Thanks, Kate.

And we'll move on to Jim Duffy with Stifel, Nicolaus. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Cindy, we'll miss you. A couple questions. First, on The North Face and timing of shipments, are retailers reticent to take inventories as early as they have in the past? Should we expect any shift in revenue from 3Q to 4Q in the U.S. business like we saw in Europe in 2012?

Yes, so Jim, this is Steve. Timing of shipments, I don't really see a dramatic shift here or in Europe. I think what you'll see is just a more cautious prebook. And consumers -- or our retailers looking to take deliveries closer to demand. But timing should remain the same, and no dramatic shifts quarter-to-quarter. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Shifting gears a bit to Sportswear, great improvement there in the operating margin for the year. Sounds like good momentum in the direct-to-consumer. Should we expect the momentum in the operating margin improvement to continue for that coalition in '13?

Yes, you should. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Bob, care to elaborate on that?

Yes, he should.

Yes, Jim, actually, I'll expand just a little bit, right? So actually, in both the Sportswear, as well as Contemporary, we've seen really nice improvement. And for 2013, we expect those businesses to improve to the low and even closer to the mid-teen operating margin levels, with a 15% operating margin clearly in our sight. So yes, we're seeing a lot of opportunity there for continued and significant improvement.

In both.

In both.

And Michael Binetti with UBS will have our next question.

Can you give us an idea of the -- what the Timberland operating margins look like in the quarter and what the Timberland operating margins are that are implied in the plus-100-basis-point guidance for the company for 2013, please?

Yes, I'll handle that. I'll talk about for the year, Michael, for 2012. We started the year saying that we thought our operating margin for Timberland would be in the 10% to 11% area, and that's where we ended up. We were just above 10% actually in 2012. For 2013, what we're looking at is, as you'd expect, where you expect to grow our gross margins in 2013. But Steve mentioned something in his comments that there are a couple areas that we're going to be spending against, and those are in product, in the product development area, as well as we're going to up the marketing spend there as well. So improved gross margin in 2013, exactly what we need to see, but the operating margin will remain relatively flat, maybe up just a little bit from what we saw in 2012 because of the spend.

Okay. And just 2 quick follow-ups here. Could you just help us out, the order book you're seeing for the big brands, Vans and North Face, for the spring?

Sure. So order book for our Vans business is quite strong, which is leading us to the guidance we gave for the brand, both here and in Europe. And order book in The North Face is moderate, as you might expect, with the caution that we see in our dealer base, both in the U.S. and Asia. I mean, in Europe. But our Asia business is quite strong. So just up slightly, right in line with how we've guided the brand.

Okay. And one -- just one last one. Eric, is there any opportunity to do -- to start talking about a shop-in-shop with JCPenney this year? We've had the Vans product and the Lee product in there historically, and some of the competitor sales brands has -- look like they've signed up for some distribution there under the new store format. I wanted to see if there was an update there for us.

Yes, that's a great question, and we are in active discussions right now with Penneys about what a Lee shop or a Vans shop might look like and when they might appear, but I don't have an update on exactly when that will be.

Okay. All right. And congrats to Cindy and Lance as well.

Thanks, Michael.

And next, we'll move to Edward Yruma with KeyBanc Capital Markets.

Best of luck, Cindy. Can you talk a little bit about the benefits you saw from the step-up in advertising? And then also, you've indicated that advertising as a percent of sales will also increase in '13. Should we expect that to be back-end weighted?

Yes, the -- we measure -- actually, for all of our big brands, we measure the impact of our investments behind those brands. And your question was about advertising. We obviously measure that. We have a pretty good feel. We measure it year-after-year by media type, and each brand knows what their consumer responds to. And because of that, that's why our ad spend has increased consistently over the last 4 or 5 years and why our investment is going up another 30 basis points this year. We think now is a great year to do that because we're expecting consumers to take a little coaxing to get them to engage with brands, and we're in a position to do that. The seasonal mix really varies by brand. For our Jeans business in the U.S., it's really important that we hit back-to-school hard. For our colder weather brands, it's important that we hit the third quarter, and the holiday quarter's important for everyone. I hope that helped.

And we'll move on to Evren Kopelman with Wells Fargo.

I wanted to ask about -- for The North Face, you talked a little bit about the, I guess, merchandising, some of the lighter-weight transitional goods, maybe the activity-based model helping, is -- I'm thinking is kind of this weather is here to stay, the global warming type conversations. How about for the Timberland brand? I think the new apparel that's coming in the U.S. is more outerwear-focused. Maybe you could talk if for that brand, there are conversations on the merchandising side to be kind of more versatile, seasonless maybe as well.

Sure. So I think it's important to note that our apparel business in Europe is the strongest in any of the regions. And our international business, we're about a $220 million business. Here in the U.S., as we look to relaunch the brand and very thoughtfully through select specialty and department store partners, we'll be placing outerwear but also a very robust collection of sportswear. So I think you can think about a really balanced approach of sportswear and outerwear, natural fibers, cottons and leathers and more of that rugged outdoor feel that you would expect from Timberland.

And then second question is on the M&A front. Are you still focused -- I think you've said in the past, the Outdoor & Action Sports area? Or is there any interest in the contemporary areas you've looked into before, even more footwear now that you have the Timberland and the footwear expertise with that?

I think the answers to your question are yes, yes and yes. All of those are areas that we're exploring. We clearly have been focused in the Outdoor & Action Sports area, and we've talked about that as being our priority. But in each of our coalitions, we understand where there are opportunities for us to add to the portfolio in a really accretive way to the portfolio. In other words, giving us either a skill set or a product category that reaches the consumer in a different way. That's how each coalition thinks about it. And our focus has been on Outdoor & Action Sports, but that doesn't mean we're only looking at that area.

Okay, and congrats to Cindy and Lance as well.

Thank you very much.

And we'll move on to Erinn Murphy with Piper Jaffray.

I wanted to follow up on the Asia growth rate comments, as we've seen that compress over the last quarter and then kind of a little bit more of a tempered guide for next year in the low-teens range. You highlighted the inventory in the channel with respect to the jeans market in China. Can you elaborate a little bit more on what you're seeing in that market in particular there? And then how do you think about the competitive space broadly in China in that Outdoor segment at this point? Have you seen any inventory creepage in that channel there? Are you still pretty pleased with that performance?

Sure, great question. We -- in September, when we were in Shanghai, we guided that we thought we could grow Asia 17% compounded over the next 5 years. And now we're talking about a low-teen rate for 2013, and it really is solely -- the sole issue we have is our inventory in our Jeanswear -- in the industry and with our brand as well. If you look at our other businesses in China, The North Face, Timberland, Vans and Kipling, they are all on track to the kind of growth rates we talked about in September. Jeanswear, with the Lee brand in particular, was the first brand we launched there. For example, it's got a 12-year head start on The North Face. One was launched in '95, the other in 2007. So it has much broader distribution than Lee does, much broader distribution, many more touch points with consumers and a lot more inventory in the space. And that's where we have this short-term issue. We expect to work through that issue in the first half of the year, begin to gain growth momentum in the second half of the year and be back on track in 2014 with the kind of growth rates we talked about. U.S., the second question, I forgot it, sorry. Can you repeat it?

I just -- yes, sorry, I was just asking about...

Oh, the outdoor.

The competitive landscape in the outdoor space and if you've seen any kind of inventory creepage there as well.

Yes, we have not seen in our brand with -- that's really -- our focus there has been primarily on The North Face until recently, obviously, when we acquired Timberland. So we now think we have a great -- we're in a great position to shape the conversation about outdoor in China. And we have not seen an inventory issue with either of our brands, and I'm not aware of an inventory build with other brands.

And we'll move on to Mitch Kummetz with Robert Baird. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Bob, let me start with you. Just you gave a little color on the sales growth by quarter and you mentioned that Q1 is the toughest comparison. So in light of the 6% growth that you're looking for the year, kind of where do you think Q1 falls in? I mean, are you talking sort of low single digits? And then also, I was hoping for a little color on kind of the operating margin cadence. You've got your easiest kind of op margin comparison in the first quarter, with Jeanswear still having been impacted by the input costs. And I was kind of wondering how we should think about that. And I have a follow-up.

Yes, Mitch, the -- to the first question relative to the first quarter, yes, we could be a few percentage points off the 6%. That's what we expect, a few percentage points below the 6% rate that we talked about for the year. In terms of the cadence of margins, you're absolutely right. Maybe I'll talk about both gross margin, as well as operating margin. We expect to see the strongest comparison in the first quarter from a gross margin standpoint, which is what you'd expect, right? We're up against -- we're comping against the highest costs of the year in -- especially in the denim side of things in 2012 in the first quarter. So that should be the strongest comp from a gross margin standpoint. But at the operating margin line, because of the significant growth, particularly on the direct-to-consumer side in the fourth quarter, that's where we expect to see the strongest expansion in operating margin. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay, that's very helpful. And then a follow-up for Steve on Timberland. A couple of things there. One, could you talk a little bit about kind of where would Q4 sales have come in, if there's some way you can adjust for the distribution changes that you've seen? And those distribution changes, do those continue to be a bit of a top line headwind as we go through 2013? And then also, could you talk about the impact of apparel on the business in 2013? I mean, just in terms of relaunching in North America, I mean, is there any way you can sort of assign a dollar value to that in terms of kind of incremental revenues?

Mitch, I'll do my best to answer this question without really being able to give you dollar values, which I know you're looking for. The distribution changes that we enacted, we started at the beginning of the year, it's hard for me to put a number on it. I can tell you that it absolutely did have an impact in our sales, but so did our store closures, as well as less closeout inventory, which the brand would've shown historically. So it did have an impact, but it wasn't the major driver. Impact from our apparel, as I've mentioned in my comments, will be very minimal. We're being very thoughtful and very selective in how we launch the new product here in the United States. We want to position it with the best specialty and department store players so as to really position the brand and give the product the right theater to be presented and to be supported by the footwear. So sales will be very minimal. The growth next year will come from our footwear, as well as the growth that I mentioned in DtoC and wholesale. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay, got it. Good and thanks for everything, Cindy.

And we'll move on to Matthew Boss with JPMorgan. Matthew R. Boss - JP Morgan Chase & Co, Research Division: So as we dig deeper overseas, can you speak to your level of enthusiasm in Europe next year and also, in-sale brand or category opportunities as we look forward over there?

Sure, I'll take that. This is Eric. Our expectation for next year in Europe is for a high single-digit increase. So I step back from that and say we're really taking share in Europe. We're doing that because of our portfolio of brands and the different -- the number of countries we do business in. We clearly have some countries that are really challenging. We've talked about Italy, it's a tough place to sell apparel and footwear right now. And we have brands, though, that are, on the other end of the spectrum, really delivering in Europe, like Vans did for us in 2012 and will again. So while there are challenges, what we've done is look at which brands are in which markets and where are the opportunities to invest, and we're investing with real focus behind Vans in markets like the U.K., Germany and France, and in other brands where there's an opportunity to grow. And that'll help us navigate through the European challenges right now and deliver high single-digit increases in a really tough space. Matthew R. Boss - JP Morgan Chase & Co, Research Division: That's great. And then second question, your inventory levels, very tightly managed. We haven't seen levels like this for a couple years. How should we think about how you're managing this across brands? And then what is the game plan looking forward from an inventory perspective?

Well, we manage our inventories pretty similarly across brands. And obviously, the retail component of any individual business has some bearing in terms of our overall inventory levels. But this was a year -- actually glad you referenced it. This was a year where we are -- I guess, we put some extra focus on our inventories and we saw -- we really saw a great progress. We have very, very frequent face-to-face conversations about inventory. As I see some smiles around the room here from our group folks and presidents. And it's just an area that we just put a lot of focus and have been able to put or make an awful lot of improvements. So for 2013, we will continue to do the same. Actually, in our cash guidance, our assumption is that inventories will generally grow. After the reduction in 2012, we'll pretty much grow with revenues. However, I can tell you that we'll push hard to do a little bit better than that relative to our overall inventory. There is still some room for improvement.

Yes, I'm going to weigh in on this because I want to give a shout out to our supply chain and front-end guys. They're working together on a new process that looks at our inventory in a different way, and they're doing that across every business unit in every geography. And part of it is a new process, and that's let us grow our business like we did last year and still take $100 million out of inventory and service at a high level. And kudos to them for coming up with a new process and making it stick.

And next, we'll hear from Eric Tracy with Janney Capital Markets.

I'll add my congrats to Cindy. Really appreciate the help throughout the years. And congrats to Lance as well. Eric, I guess, if I could for you, just broader on the domestic front sort of beyond the seasonality issues. So on your macro, you're going to have the various potential sort of tailwinds versus some of the headwinds on the tax front or energy costs, sort of what your expectation here is domestically?

Well, we read the same stuff you do, Eric, about how economists see the U.S. economy, and the question is how are people going to react to changes in tax rates and changes in healthcare costs and all that. And clearly, there are going to be pressures on disposable income in America. That seems pretty much laid out. In that environment, we have a mid-single growth -- mid-single-digit growth rate kind of baked into our assumption for this year. We think that's taking share as well, similar to the way I answered the Europe question. We really look across our portfolio of brands and ask, where can we win? And where we think we can, we try to distort our investment to ensure we do. And that's how we think we can deliver a mid-single-digit growth rate in an economy that's clearly not going to grow that quickly. We still have some challenges to get through here. Fortunately, VF is going to get through them pretty well.

Okay. And then maybe, Steve, for you on Timberland, maybe just a little bit more color in terms of the, I guess, sort of soft launch on the apparel side for fall this year. I know it's going to be tight, but sort of the expectations for what that contributes. And I think you said sort of the incremental $300 million, maybe just speak to, again, the timing cadence of that.

Sure. So just I think to restate, the launch here in the United States is on top of a very robust apparel business internationally. We have a very select number of new specialty and department store partners. We'll place it very thoughtfully with the whole focus of getting strong profitable sell-through with our retail partners so we build a platform for the future. That $300 million that we mentioned at point of acquisition is over a 5-year horizon. That would take you then through 2016, where we look to add that incremental growth across the global apparel business.

Okay. And then maybe last for Bob. Is it possible to quantify the 100 basis points of gross margins in sort of the various buckets? Again, the mix shifts, I get, are driving it. But maybe just between that, lower input costs, just walk us through and quantify for '13.

Sure, Eric. The -- it's actually going to be a pretty consistent story here over the past several years. And we talked about this a lot, that our mix shift has been providing us 60 to 70 basis points of improvement in our gross margin very consistently every year, and it's exactly what we expect for 2013 as well. The remainder are, in fact, product costs. Some lower product costs, Jeanswear is a component of that, to be sure, so is Imagewear, which had some higher product costs in 2012. So it's 60 to 70 for mix and the remainder coming from product costs.

And we do have time for one final question. Next, we'll hear from Omar Saad with ISI Group.

Lance, congratulations. And Cindy, definitely a shout out for such an amazing tenure. I think you do go down as a legend in IR, in the sector, not just for the tenure and the duration, but obviously, the excellence as well. So congrats to you both. I wanted to ask you about -- obviously, VF over the years really has been the company that's kind of almost pioneered this idea of the lifestyle brand in the apparel sector. Certainly coming out of North America, done a tremendous job building lifestyle brands over time. Can you talk about -- the area where you've had probably the most success is in the Outdoor & Action Sports. Are you -- how are you thinking about the lifestyle of Outdoor & Action Sports? Are you seeing any changes in how consumers are thinking about that lifestyle? Is it becoming more subtle? Is it becoming more segmented across different types of outdoor sports and action sports? What are you guys seeing in that marketplace from a lifestyle perspective?

So Omar, I'll take a shot at this, and Eric can fill in if I miss something. I think the outdoor lifestyle, which we've certainly been at the forefront of helping create and certainly benefit from, continues to be on the forefront of consumer minds. We look a lot at macro trends across all of the regions. And healthy lifestyle, fitness and kind of that whole notion of getting back to simplicity really plays into the historical strengths of the outdoor industry. We do see really strong influence of action sports, as well as athletic coming in and speaking to a broad number of our consumers. And I mentioned how we're looking at that athletic trend and what that means to outdoor apparel becoming more lighter weight, more contemporary in its fit while maintaining that core function. But I think the key here also is that action sports, that lifestyle component that, that plays into, that again, our Vans business has been very strong at helping shape and is again at the forefront of being able to maximize that.

Yes, Omar, one thing that the Vans guys have done that quite frankly just impresses me beyond speech almost is they have kept that brand relevant to youth for over 40 years. And they've done that by not trying to speak to a customer but by speaking to youth. And they understand youth need to be individually expressive and creative, and they've changed their message and how they do that, customized it to each new generation. And that's why they're still relevant and leading with youth around the world.

Got you. And then maybe on a related topic, it was interesting to hear you're going to accelerate marketing spend and store openings. How are you thinking about that? What gives you the confidence to do that? It's great to hear it, obviously, from a brand standpoint, but any update or thoughts there would be helpful.

Sure, Omar. We went back to our thinking in 2010, and you were following us then, and you know that we increased our investment -- our brand investment number by $100 million that year because we thought the economy was going to be a little wobbly and that we had the brands and the products to make a difference and accelerate our performance. And we think this is going to be that kind of year as well. We know our retail formats work. They're tested and proven. And as I mentioned earlier to someone else's question, we measure the effectiveness of our marketing, so we know which messages work and which don't. And we're going to distort our investments behind brands in geographies with proven retail formats and proven marketing communication. And we think that formula is going to help us get through this pretty difficult time in the global economy.

And that will conclude our question-and-answer session for today. I'd like to turn the call back over to the speakers for any additional or closing remarks.

No, just thank you, all, for joining us. We're really excited about 2013. We think we've got all the pieces in motion to deliver another great year, and we're blessed by having a legend in Investor Relations in the room today, and we wish her well as all of you do. Thanks so much for being with us.

And that will conclude today's call. We thank you for your participation.