Good morning, and welcome to Wolverine Worldwide's 2012 Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] This call is being recorded at the request of Wolverine Worldwide. [Operator Instructions] I would now like to introduce Ms. Christi Cowdin, Director of Investor Relations, Communications for Wolverine Worldwide. Ms. Cowdin, you may proceed.

Thank you, Keith. Good morning, everyone, and welcome to our fourth quarter and full year 2012 conference call. On the call today are Blake Krueger, our Chairman, CEO and President; and Don Grimes, our Senior Vice President and CFO. Earlier this morning, we announced our financial results for both the fourth quarter and full year 2012. And if you did not yet receive a copy of the press release, please call Brad Van Houte at (616) 233 0500 to have one sent to you. The release is also available on many news sites or can also be viewed from our corporate website at www.wolverineworldwide.com. This morning's press release included non-GAAP disclosures, and these disclosures were reconciled with the cash tables within the body of the press release. Today's comments during the earnings call will also include some additional non-GAAP disclosures. There was a posting at our corporate website that will reconcile these non-GAAP disclosures to GAAP. To view the documents, please go to our corporate website, www.wolverineworldwide.com, and click on Investor Relations in the navigation bar, then click on Webcast at the top of the Investor Relations page, and then click on the link to the file called WWW Q4 2012 Conference Call Supplemental Tables below the webcast link. Before I turn the call over to Blake to comment on our results, I'd like to remind you that the predictions and projections made in today's conference call regarding Wolverine Worldwide and its operations may be considered forward-looking statements by Securities Laws. And as a result, we must caution you that as with any prediction or projection, there are a number of factors that could cause results to differ materially. These important risk factors are identified in the company's SEC filings and also in our press releases. With all that being said, I would now like to turn the call over to Blake.

Thanks, Christi. Good morning to everybody, and thanks for joining us today. I'm pleased to report that we closed fiscal 2012 on a strong note with revenue from our legacy business, representing the 12 brands in our portfolio prior to last year's acquisition of the Performance + Lifestyle Group, reaching record levels during the quarter, driven by increases in all operating groups. Geographically, our owned U.S. and third party distributor and licensing businesses produced the highest increases, which were partially offset by shortfalls in Europe due to the impact of the double-dip recession that persists in that region. Earnings leverage was also good as we delivered better-than-expected results from our legacy brand portfolio. In addition, our 4 newly acquired brands posted revenue in line with our high expectations and generated better-than-anticipated earnings during the stub period, which was from the close of the acquisition in October to fiscal year end. Don will provide some more details on that in a bit. We're ahead of schedule in realizing the collective benefits from our unparalleled portfolio at 16 brands that are currently distributed in over 200 countries and territories. We reached all genders and age groups and covered most product categories. We are also very pleased with the strong interest in our 4 new brands from our established international partners. Let me start with some comments about our 4 new brands, beginning with Sperry Top-Sider. Sperry had a great close to the year, generating an extremely strong double-digit revenue increase during the stub period. This stellar performance was achieved through rigorous execution of the brand's strategic growth plan that is focused on elevating the business to a global dual-gender, multi-category Performance + Lifestyle brand. For Sperry Top-Sider, nonboat shoe product continues to grow at an even faster pace than boat shoes with…

Thank you, Blake, and good morning, everyone. Earlier this morning, we are pleased to report our fourth quarter and full year financial results for the fiscal year ended December 29, 2012. Results there were highlighted by a third consecutive year record revenue for our legacy Wolverine business and included the contribution of the 4 brands from the PLG group that we acquired on October 9, 2012. We delivered a strong close to the fiscal year with consolidated fourth quarter revenue of $652.2 million, growth at 60.5% versus the prior year. Excluding the revenue contribution from the PLG brands in the stub period, revenue was a record $432.8 million, up 6.5% versus the prior year. Including modest dilution from the PLG acquisition in the stub period, fully diluted earnings, excluding nonrecurring transaction and integration costs, were $0.48 per share, well above the guidance of $0.12 to $0.22 per share communicated in October. Before I go into a detailed discussion of our results, I'd like to underscore Blake's comments about 2012 being a transformational year for the company, although to be candid, one that was not without its share of challenges. Uncooperative weather and challenging economic conditions in Europe, in particular, were both a drag on our legacy Wolverine business for most of the year. However, solid results in other regions particularly the U.S., our largest market, and double-digit growth in both Latin America and Asia Pacific helped offset the weakness from Europe once again, demonstrating the strength of our diversified business model. Now I'll provide a little more color on both the quarter and the full fiscal year. As just noted, we closed on the acquisition of PLG during the second week of October, and the contribution from the acquired businesses in the stub period is reflected in both the fourth…

[Operator Instructions]

I apologize for the technical difficulties, I'm going to pick up where I was informed approximately where we lost the connection. So to the extent this is a bit of repeat of a paragraph or 2, please bear with me. Shifting back to the company's full year results including PLG in the stub period, gross margin was 38.6%, a decline of 90 basis points versus the prior year and in line with the guidance we provided in October. For the legacy business, gross margin was 38.0%. As we've previously noted, negative channel mix in the form of higher closeout sales and the negative geographic and brand mix in the form of better sales performance in the U.S. by some of the lower gross margin brands in the portfolio, contributed to the full year gross margin decline. Additionally, higher product cost, particularly in the first half of the year, were only partially offset by selling price increases and foreign exchange contract gains. Full year noncash LIFO expense of $3.6 million was about $500,000 lower than the prior year. Reported gross margin for the company was 38.3% and includes the impact of $3.7 million of nonrecurring transaction related cost of sales tied to the write-up of PLG's inventory to fair market value as of the closing date, and $800,000 of nonrecurring severance expenses incurred in the fourth quarter in our combined Asian sourcing organization. Operating expenses for the legacy business were $394.7 million for the full fiscal year, an increase of 2.1% versus the prior year and $119.9 million for the fourth quarter, an increase of only 0.6%. For the full year, brand building investments and $10.4 million of incremental noncash pension expense, were partially offset by significantly lower incentive comp expense, strong discipline in corporate cost centers and a favorable impact…

Thanks for your time this morning, and I apologize for the technical difficulties. Just for the record, Don -- neither Don or myself touched anything. Hopefully, now we'll turn the call back to the operator so we can take your questions. Operator?

[Operator Instructions] And the first question comes from Christian Buss from Crédit Suisse. Christian Buss - Crédit Suisse AG, Research Division: I was wondering if you could talk a little bit about what's embedded in your assumptions for the core Wolverine business for 2013. It looks like if I adjust further relative accretion versus dilution last year, you're not modeling for much EBIT growth. Could you talk us through that little bit?

Yes. I mean, for legacy Wolverine, what's embedded in our revenue guidance, to kind of break it out between the legacy brands and the PLG brands, we're looking at kind of mid- single-digit full year revenue growth for the legacy Wolverine brands and high-single-digit to low-double-digit revenue growth for the PLG brands. When you kind of think about the legacy business going from revenue to earnings, the legacy business, obviously, is going to be -- the earnings are going to be negatively impacted by the incremental $10 million of pension expense and most of the incremental $10 million, $9 million to $11 million of incremental incentive comp expense. So if you kind of back out the PLG accretion from the earnings guidance that we gave you and further adjust for the incremental pension, adjust the prior year numbers for the tax benefit, obviously, and adjust further for the incremental incentive comp, you get legacy earnings growth kind of in the low-double-digit range, Christian. So I mean, certainly, when we take the earnings guidance and back out the accretion without making any other adjustments you get somewhat modest year-over-year growth rates. If you adjust for the $0.19 per share of nonrecurring tax benefit in fiscal 2012 and also recognize that we have certain things that are beyond our control, such as market interest rates that affect the noncash pension expense and certain things that we're certainly going to plan for, which is a normalized level of incentive comp, you get to legacy earnings growth that are in the double-digit range. Christian Buss - Crédit Suisse AG, Research Division: That's very helpful. And can you talk a little bit about what you're seeing sort of as we head into spring here with the cold weather that we've had, and also with M-Connect starting to go into stores?

Yes. I mean just taking maybe a little more detailed look at the U.S. market, I think it's a bit of a mixed bag right now. I think we did get some weather a little bit late. I think everybody would appreciate it a couple of months before it finally hit, but it had the benefit of cleaning out inventory. So our view is that, really, across a number of distribution channels, inventories are domestically very clean at retail. Looking ahead in a macro sense, the U.S. consumer has been very resilient. I think we're going to digest higher taxes this year. I know tax refunds are coming slower than normal, we're going to have to deal with the sequester and debt ceiling overhang as it impacts the market. And we're going to feel the effects of 2 very warm winters, although the recent weather has cleared some of that out. So overall, the U.S. consumer, over the last couple of years, especially in footwear has been resilient and we expect that to continue despite some of these macro headwinds. The early reads on M-Connect, turning to the second part of your question, the early reads on M-Connect are very good. It's -- although some retailers requested early delivery in December for a very small portion of the line that was available, it's just hitting retailers right now and it's beginning to check out. So we're pleased so far, but we'll obviously have more to report on that in our Q1 call.

And the next question comes from Jim Duffy with Stifel. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: A couple of questions. Don, as I'm looking at the fourth quarter, the lower dilution versus guidance, was that a result of savings that are permanent or just the shift in timing of merger-related expenses? And then can you talk about the reversal of the balance sheet reserves from PLG?

Yes. I mean I would say, to answer question, that's an example of one thing that's not recurring or permanent. It's kind of a onetime thing. I mean, as we got into the closing process and evaluated some of the reserves that were -- in particular, was a vacation accrual, that was a halfway significant amount worth calling out anyway and explaining why the PLG results were better than the October guidance, but it was material enough to call it. That would not be a recurring type thing. The lower discretionary spending, I wouldn't say that's not necessarily recurring type thing. I mean you will note that -- in fact, one of the conversations we had internally, Jim, was the over delivery on dilution versus the prior guidance. We don't want someone to think that our prior $0.35 to $0.50 of accretion guidance for 2013 is significantly understated. We did adjust it taking the lower end of that range from $0.35 to $0.40 per share, so we feel pretty confident that the $0.40 to $0.50 accretion range for 2013 is a reasonable number given where we stand today. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Got you. Okay. And then the adjusted EBITDA number in the guide, there's some noncash expenses excluded, there's also some cash expenses, trying to drill down to what cash flow might be for the year. Don, do you have any kind of forecast you'd be comfortable sharing with respect to that?

Yes. Well, I mean the adjusted EBITDA that we -- per the definition in the credit agreement, we wanted to kind of like stick to that definition, and the credit agreement does allow us to add back the noncash stock comp expense and the noncash pension expense. So taking the EBITDA number and reducing it by the capital expenditure range would -- and then further reducing, obviously, for dividends, expected dividends to be paid, would get you to a true cash flow number for the year. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Can you help me...

Adjusted also, Jim, by working -- obviously, increases in working capital. But I don't -- long way of saying, I don't have a cash flow number to share with you nor are we going to get one, but that you can come close to the number if you adjust it according to what I just suggested. Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: Okay. Final 2 questions. Are things getting any easier in Europe? And then if we're looking for sources of upside to the numbers in '13, where would you expect that comes from?

Yes. Just to focus on Europe a little bit, the double-dip recession continues over there. As you know, Jim, we have about half of our European peers in the U.K. which was especially challenged last year. We're not planning on Europe getting any better this year. On the other hand, we're not planning on Europe getting materially worse. So we think Europe is kind of at a bottom, there'll probably be some volatility from country to country or regions within Europe, but we think it's going to bounce along this bottom at least for footwear to the next year or 2. And what was the second part of your question? Jim Duffy - Stifel, Nicolaus & Co., Inc., Research Division: The fiscal year guidance.

Yes. When we look at current momentum in the brands, operating 16 brands now, if you start with our largest brands, obviously, Merrell M-Connect, we'll be monitoring that closely. We have high expectations for that. It is -- that business and that offering is in the smaller segment of the Merrell line. The Sperry momentum just, frankly, continues. Sperry is probably the best-performing brand for virtually every better-grade retailer that it currently partners with. We've seen strong demand, continuing across men's and women's. Interestingly enough, the last couple of months, especially strong performance on the men's side. So certainly, we see Sperry as a real performer in a significant way for the coming year. But we also expect strong double-digit performance from a number of our brands including some of our smaller brands, Chaco and Cushe and Sebago. And the Wolverine brand also had a great 2012 and we expect that momentum to continue into '13. So it's not just a 1 brand or 2 brand story, really it's across the entire portfolio.

Jim, I'll go a little more granular as you kind of go down the income statement from revenue down to EPS, and Blake was talking to potential sources of revenue upside. But obviously, we have a plan all the way down to EPS that supports the revenue or that supports the guidance that we issued, the earnings guidance, but to the extent we have a more positive mix shift in our portfolio that could generate some potential gross margin upside to what we framed -- help frame the guidance that we gave. Any upside on SG&A would probably be in response to revenue growth that maybe it doesn't materialize to the way we think, so I wouldn't necessarily think of SG&A, lower SG&A, as a source earnings growth versus the guidance that we gave, because that would probably be taken if we are under delivering on the revenue line. So really, gross margin might be the biggest source of potential earnings in excess of guidance in addition to revenue that Blake talked about.

Jim, I'll also say that the momentum also continues in Keds. It will probably be more top line momentum in 2013 given the investments in Taylor Swift, but also Saucony and Stride Rite, which continue to outperform.

And the next question comes from Kate McShane with Citi Research.

Blake, I think you said during your comments that the integration of PLG is ahead of schedule and under budget. And I wondered if you could just give a little bit more detail around what's driving this and does that mean anything for synergies maybe later during the year?

I think that Don gave you a pretty accurate view of the synergies we expect in 2013. I would just -- I really don't want to jinx us at this point, but I will say that the integration has gone better than I could have hoped for. And a lot of that has to do with the effort from the Boston teams, as well as the Michigan team. Backroom integration is virtually complete at this point here. We haven't missed a single shipment of shoes. I would say one of the largest projects we have in front of it is to bring them on our systems SAP for this coming year. They're on SAP in Europe, but they're European business is smaller and we need to get them on in our systems. That being said, the integration of the backroom, the sourcing, the compensation, the HR areas, have all gone exceptionally smooth and well. It's -- we went into the transaction thinking there would be a good cultural fit here and frankly, the cultural fit has been great.

Okay. Great. And then my second question is with regards to your commentary about the warm weather. And I wondered if you had any flexibility with your sourcing to better service the retailers if they do start to order product differently for the next few winters?

Yes. I mean I think we've been, as you, Kate, we've been on a kind of a narrow and deep inventory philosophy for some time. You need to carry a little bit of everything, but you need to be narrow and deep in the key styles and the key colors. I don't think that's going to change for us. On the other hand, a lot of people said we couldn't have 2 warm winters in a row. We did. At least here in the United States. And a number of people are currently saying we can't have 3 in a row, but who knows. So it just puts a little more pressure on us to have what our -- do the research on the consumer side and have deep consumer insights. So we're there with right product when the retailers need it. I would say, overall, retailer inventory this year is at a better position than it was at the end of last year.

[Operator Instructions] The next question comes from Edwin Yruma from KeyBanc Capital Markets.

Can you talk a little about your projected initial expense? I think you said it was $55 million to $60 million including the amortization. Does that anticipate continued debt pay downs during the year? And if not, kind of how should we think about -- obviously, this is a priority for your free cash, but kind of percentage of free cash used to repay the debt?

Yes, that doesn't presume any significant reduction in our principal balance beyond the mandatory payments that we made over the balance of the year. As you probably realized from looking at our quarterly results, Q1 is typically a cash-use quarter for us. Q2 is typically a small amount of cash generation. Q3 is usually a cash usage quarter for us. And our cash -- full year cash flow generation is very heavily weighted to the fourth quarter, Ed. And we are going to be limited in terms of what we could voluntarily pay down by the cash that we generated in the U.S., because, obviously, our offshore cash is deemed to be permanently reinvested offshore, not to be repatriated without some significant tax cost. So therefore, it's only our U.S. cash flow generation that is available to pay down the debt voluntarily, if you will, and so we're not modeling any significant further reduction in our principal beyond the mandatory principal amounts that are due over the course of the year. And I think any additional meaningful amount may be a Q4 event, not something that would have a significant impact on full year interest expense.

Got you. And Don, thanks for the updated FX guidance for 1Q. I guess, it sounds like you're taking most of the benefit -- or excuse me, the impact from unfavorable FX rates in the first quarter. Is that a fair read based on what you provided from an annual basis?

Well, we're expecting kind of negative FX based on our current outlook for FX rates over the balance of the year each quarter. I think the most significant quarter is Q1, but then we have Q3 as close to the Q1 amount, and then Q2 and Q4 are both expected to be negative FX impact as well. So full year earnings per share, we think, will be negatively impacted north of $0.10 per share.

Got you. And one bigger picture question. I know during '12, you saw significant shift in retailers moving to more at-once versus pre-book. Obviously, some of that at-once business did not come through. I guess, how are you positioning the business for this year? And do you think that, that trend will continue?

I think retailers, at least here domestically are going to approach the coming year with a little more caution, and it's going to put a little bit -- a little more pressure back on brand owners like us to operate our businesses efficiently and be there with inventory when they need it. So -- but I will say the weather that we did have across most of the U.S. in January and February has really helped to clean out inventory. So retailers right now are, at least for the moment, have returned to kind of a normalized at-once order cycle.

The next question comes from Taposh Bari with Goldman Sachs.

So I actually have another question though in light of all that detail. So fourth -- can you just give us the fourth quarter legacy gross margin and SG&A? Because I'm a little confused there. You said in your commentary that the Wolverine Legacy business is slightly better on gross margin and slightly lower on operating expense. Can you just give us the actual numbers?

Sure. I mean, the legacy gross margin was 35%. I did give the legacy SG&A, $119.9 million, you must have missed that. But the legacy gross margin was 35%.

Okay. So if I could -- okay, so basically, that gets me to about 200 basis points of gross margin compression and about 160 basis points of SG&A leverage. But if I look at your prior guidance, unless I'm wrong, I have gross margins down slightly for the fourth quarter legacy business and then flat to slight deleverage for SG&A. Am I missing something there?

I'm sorry, I was looking at numbers, while you were saying the last. Let me address the first part of your last comment or question, and then you can ask the second part again. Legacy gross margin in the quarter was down about 200 basis points versus the prior year. My analysis shows that pricing contributed about 300 basis points of gross margin expansion, which was partially offset by the impact of higher product cost of about 250 basis points. FX was a drag of about 25 basis points in the quarter. The lower LIFO expense that I mentioned during my prepared remarks contributed about 15 basis points to gross margin. And then the negative mix, which as I addressed in my prepared remarks, is really high closeout sales and the U.S. continuing to grow at a faster quote than the higher-margin non-U.S. market with a drag of about 64 basis points in the quarter. So with that, as context, can you ask the second part of your question again?

Sure. So if I go back -- I mean, in my notes, I have here that you were guiding fourth quarter gross margins for the legacy business to be down slightly, down 200 basis points. And then you were also guiding SG&A to be flat to slightly delevered year-over-year. It seems like that contradicts to your comments in your prepared remarks. I just want to make sure that, that was in fact your guidance going into the quarter for the legacy...

I thought -- I don't have my last quarter script in front of me, but I thought the guidance that we offered was in the context of full year guidance.

Okay, I'll have to go over that.

Christi's nodding her head. Doesn't mean that we're right and you're wrong, I have to go back and look. But I thought what we said in October was we expect full year gross margin to be slightly down, et cetera. And that then -- and we'll let people kind of force out what the fourth quarter was made from that full year guidance, I'll check, Taposh, and we'll see.

Okay, all right. Nonetheless, I guess, that leads me into my second question.

Nonetheless, the Q4 results are the Q4 results.

Exactly, exactly. So as we look at '13, right, without getting into specifics on legacy versus PLG and quarterly, I'm just trying to get a sense of that 200 basis point gross margin contracting run rate? Is that the trough? Is that going to continue to bleed into the first half of the year? How do we think about just the cadence of legacy gross margins in '13? And then, I guess, the second part of that question is if we look back, this is the second mild winter in a row for you guys. Last year, when you gave guidance you were implying some rate of reorder acceleration in the back half. I think some people might have thought that was a little aggressive. As we look at the way you're presenting 2013 guidance this year, do you feel like you're taking a more prudent approach to those types of assumptions. If you can just comment on that?

Yes, as it relates to gross margin, we clearly believe that 2012 represents the trough of our gross margin, and particularly Q4 represents the trough. We'll be getting the benefits right out of the gate in 2013 from the higher contribution from consumer direct activities, which we only got the stub period contribution from PLG retail in 2012. That plus a more benign product cost -- the year-over-year product cost, if I recall that in the first half of 2012, we had very significant year-over-year product cost increases versus 2011, and that environment stabilized a bit in the last half of 2012. But we believe that the -- what we'll see in 2013 will be meaningful year-over-year gross margin expansion each quarter. And I'll let Blake talk about the second part of the question.

And then, Taposh, I think when we look at next fall, I think it really goes back to the product development cycle of our brands. We've had 2 warm winters in a row. I think it's really incumbent on the brand to be either with their normal insulated product, but frankly to offer a higher percentage of transition product, what I would call early spring or fall product. And just to cover that eventuality I think we'll be playing it a little bit closer to the vest when it comes to weather for this coming fall as retailers will as well.

And the next question comes from Mitch Kummetz with Robert Baird. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Don, let me begin. On PLG, do you happen to have a breakout of that business by brand for full year 2012? Just to give us some context of how to think about that as we go into 2013?

I do, but we don't disclose revenue by brand. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. I just though collections don't do it…

Yes, I think I bought that somebody, so -- no but -- I mean, we don't give revenue by brand for the Outdoor Group or for the Heritage Group, so we're not going to do it for the former PLG group. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Fair enough. On the margins, so for 2013, you're saying moderate gross margin expansion just to be clear, that's off of the 38.6% that you guys are reporting pro forma for 2012, right?

That's right. Well, that's actually not pro forma, that was the -- including PLG in the stub period, just to be clear. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: You were right. You got that right.

Yes, that one’s correct. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. Could you give us -- do you happen to have a gross margin and a SG&A number for 2012 pro forma PLG for the full year? Just so we can think of it that way as well.

I don't have pro forma for full year. We gave you the stub period operating expenses for PLG in the table to the earnings release, and that $86 million number included $7 million of purchase price amortization. The stub period -- whether the stub period gross margin versus the pro forma full year gross margin, kind of like, you could argue about whether it's a different mix in the stub period versus the full year, but it'll be approximately the same, but it is just north of 40%, just to give you the context of it and how that's combined with the legacy Wolverine gross margin that Taposh asked about. I don't have number -- exact number in front me, but it was just north of 40%. Mitchel J. Kummetz - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then on the PLG side you guys have talked about growth opportunities longer term in terms of international expansion. Is there anything happening in 2013 that you could speak of? Any distributors or licensees being signed up in the back half that could benefit the international expansion of that business this year?

Yes, I would say we've been very, very busy since October 9 talking with various international partners. We have several programs signed up already. A few of those will come into fruition in the back half. Initial product seedings will occur in the back half of 2013. We don't expect those to be material, frankly, this year, so we're really spending a lot of calories now getting the programs in place, getting the management teams around the world in place, getting product introduction schedule. We'll start to see a more material impact in 2014 and beyond. And as you know, our international business historically has really operated almost like a one-way ratchet, so it's been really over a period of 20 year or 25 years just on a steady climb, and we expect that to be the case here for PLG as well.

When we were at the ICR conference, Mitch, last month, we had -- we noted that we had signed 6 new distribution agreements for the PLG brand since the date of closing. A couple of those were in Eastern Europe. I think one was in Asia -- 1 or 2 were in Asia Pacific. And I'd suspect we've added another 2 to that list since early January.

And the next question comes from Chris Svezia from Susquehanna Financial Group.

Could you just maybe, Don, go back just on the fourth quarter? I know you answered part of this in relation to an earlier question but what can you call out dramatically changed from your previous guidance when you gave the guidance for the fourth quarter about the dilution of PLG and the actual results. I think you mentioned in some reserves related to some vacation time, some other odds and ends, but I'm just -- maybe you can parcel out what were the big dramatic swings to that?

Yes, I mean, we kind of delivered on the revenue numbers, so it wasn't really revenue upside, but it was a different mix of revenues. Sperry Top-Sider grew at a faster clip than some of the other -- versus forecast than some of the other brands. But it was a pretty significant increase to gross margin versus what the forecast had been and an equally meaningful reduction in operating expenses. Some of the discretionary operating expenses that -- marketing and filling some open positions didn't occur as had been forecasted. The PLG and Wolverine had been using former allocations from their former parent company as a proxy for what the cost of the transition service agreements we're going to be and to drag you into the gory details, the actual cost of the transition service agreements is based on actual cost incurred by Collective Brands providing those services, and that came in meaningfully below what the place holder's been used to forecast those, and that's really the biggest driver. And the balance sheet reversal, that was bigger than a bread basket, but was far from the biggest contributor to the over delivery versus the dilution range.

Okay. And what -- when your new forecast for PLG accretion, $0.40 to $0.50, is that -- I mean, what changed in that assumption going from $0.35 to $0.50?

We put the bottom of the range up $0.05 just to increase confidence that we're a few months down the road and we have more visibility to the -- certainly, the first half backlog and better view on the back half that gave us increased confidence to take the bottom of the range up $0.05. We didn't take the higher end of the range up, and our goal is to over deliver on that, but time will tell.

And what -- in your speech, just to talk about moderate gross margin for the year in terms of expansion, is that -- I mean, to put a number on that. Is that more of a 30 to 50 basis point expansion? And the color on SG&A, is it moderate, deleverage? Is that in the same ballpark? I mean, how do we think, I guess, about operating margins for the combined company when you give your guidance?

Yes, I mean, I would say, going back to a conversation you and I had in the past about slight versus modest versus moderate that moderate is that -- and that falls short robust, but moderate is in the north of the range, you said -- I mean -- so it's clearly north of the 50 basis points. And as it relates to the second half your question, we would expect to see operating margin and expansion meaning that our gross margin expansion would exceed the amount of the SG&A deleverage.

Okay, all right. And then just lastly from a geographic perspective. Obviously, you're talking about Europe not really seeing any improvement, but maybe you can parcel out between the different geographies, North America, Europe, Latin America and Asia? Just sort of your thought process about how we think about maybe growth for the core legacy business at mid- single-digit growth, I guess, U.S. being strong, Latin America and Asia, Europe. Is that just because it's stagnant, does that mean that it's down for you guys? Just maybe parcel out how we think about the geographies?

Yes, when we look around the world regionally now, it's really kind of the haves and the have-nots. And so Europe clearly is in the have-not category from our view at the moment. I think everybody saw the GDP numbers for the Eurozone that came out last week, so there's some silver news still coming from that region of the world. For us, we're not planning on any significant revenue increase this year in Europe. That's how I would put it. On the other hand, Latin America and Asia Pacific were very strong for us this year. We believe they're going to continue to be strong for us next year. We are putting quite a bit of our efforts on the international side in those particular regions, and we expect a strong growth from both Asia Pacific and Latin America next year. And then on the U.S. side, I've already talked about it. Frankly, there's -- the U.S. consumer and footwear has been pretty resilient, but between the higher taxes, lower tax refunds, sequestered debt ceiling, general uncertainty, is the housing market really going to truly begin to recover. There's a number of question marks out there, but frankly, domestically, those question marks have been out there the last couple of years and has been a pretty good footwear cycle. So conceptually, that's kind of how we view the world right now.

Chris, let me go back to your first question, one second, just to give a more complete answer for your benefit and everyone else's benefit. But as it relates to full year growth margin expansion, we're going to do a number of things in 2013 that we'll deserve full credit for and pats on the back whether it's taking our selling prices up or managing our inventory better such that we have fewer close out sales, things that I've mentioned. But I also don't want to underemphasize or understate the importance of the full year of PLG and PLG retail in particular into Wolverine results versus only the stub period in 2012. That will be a meaningful contributor to gross margin expansion in 2013, particularly the Stride Rite business, which it has a really heavy Easter sale season and back-to-school season that really we didn't capture in our results in 2012, so that will be a not insignificant contributor to gross margin expansion.

So let me ask you this way, so the gross margin, the legacy business, you would expect some slight expansion, but the bigger driver is really coming from PLG and the mix of business there?

Both legacy and PLG, by themselves or in a vacuum, are planning gross margin expansion. And then when you combine full year PLG versus only a partial here in 2012, that's another contributor to gross margin expansion.

And the next question comes from Sam Poser with Sterne Agee. Sam Poser - Sterne Agee & Leach Inc., Research Division: Could you give us a little detail on sort of where the marketing expenses have been as a percent of sales? And how you're thinking about that for this year -- for this coming year?

They've been in the mid single-digit range, Sam, and somewhat surprising to me they were that way for both the PLG business, as well as in legacy Wolverine. I guess, I would have guessed maybe before we got into the acquisition work that PLG would have spent more of the revenue on marketing, but that's not true. We certainly expect with -- particularly with the Taylor Swift investments in 2013, plus incremental marketing investment behind the Sperry Top-Sider brand, which clearly deserves it given 3 years in a row growing over 30%. We clearly expect the marketing spend in the aggregate dollars as well as the percent of sales to increase in 2013. Sam Poser - Sterne Agee & Leach Inc., Research Division: And, again, I'm going to follow up on Chris' question about modest versus -- I mean, within your guidance -- I mean, are we looking at -- I mean, to get in the range of your earnings, are we looking at -- I mean, can you give us a range of basis points for the gross margin in the SG&A of sort of that range of what your guidance means? And I have one more question around the first quarter.

The short answer to your question -- your first question is no, we're not going to give a range. But we'll let the comments kind of stand for themselves and let you guys just, based on my comments regarding the hierarchy of slight, modest, moderate kind of frame it that way, I don't want to give a specific range. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay, all right. On the first quarter, you commented that inventory levels at retail are in much better shape, because it got cold, but inventory levels weren't as good, and I assume, as somebody else said that the at-once business probably didn't live up to your expectations in the fourth quarter with some of the Legacy brands. Can we expect sort of the legacy gross margin in Q1 to be challenged just because of the product you probably sold so far in Q1 was at a lower margin, just because it came later and everybody had to get clean at the same time?

Yes, I don't think our legacy businesses are facing any kind of significant pressure on gross margin in Q1, Sam. I think the retailers, in general, let's put it this way, they were more prepared this year for a warmer-than-normal winter than they were a year ago. So I think they went in prepared a little better, and then they got some help here in January and February to clear out some inventory. So they're in good shape right now, but even from our Legacy brand viewpoint, we wouldn't view Q1 as being under any kind of unusual pressure from a margin standpoint. Sam Poser - Sterne Agee & Leach Inc., Research Division: Okay. I have one more question then. You mentioned that the retailers are going to be writing conservatively, given the way the weather's been and everything. Looking into the more seasonal products in the back half of the year. How are you going to decide sort of how much business are you going to leave for at-once versus spec? Are you going to handle that more conservatively this year than you did last year, given, I think, that a lot of the retailers as you mentioned, they're sort of putting more onus on you guys. I mean, how does that balance work?

Well, we like to think of ourselves as scientists when it comes to inventory management, but Sam as you know, it's also a bit of an art form. And so we're going to be using as much market and consumer intelligence, from our own stores as well, as we can get our hands on. But we expect not so much this spring but next fall to -- for retailers to take a conservative view, again, on their inventory levels and try to put a little more burden back on the brand owners. So I don't know if that helps you or not, but certainly for spring... Sam Poser - Sterne Agee & Leach Inc., Research Division: I was wondering how you're going to think about it. I mean, for instance, if you saw they sold 1,000 units or something, and they're going to give you an order for 500 and say, "Of course, we want you to hold the rest in case we need it." I mean, how are you thinking about that relative to the orders you get. I mean how much are you going to support it, are you going to err on the side of selling out versus supporting the retail. I mean, just the general trends, how do you think about it?

I think, Sam, our brands have a very detailed analysis in that regard, retailer by retailer. So we have a lot of history with a number of our largest customers, and we use that. Every season, we do -- the last couple of years, we have had a few of our very good partners come to us, and frankly, confess, "Listen, we know we're under bought with this particular brand or that particular brand." That's their viewpoint. And then they'll also say, "But we -- if things go good, we expect you to have some product for us when we need it." So we do place back up orders, and it gets down to the style and color analysis by retailer and even regionally for some of the bigger retailers, so it's pretty sophisticated. It's never perfect, but it's also pretty sophisticated.

That's right, Sam. Even in normal times, when we would historically get 40% of our wholesale revenue in the form of at-once orders, that requires judgment on the part of the people running the business in terms of what to order and what inventory to carry, what's going to generate reorders and what's not. And one thing I can guarantee you is we don't get it all right every quarter, even in normal times. And so we'd love it if 100% of our orders were placed 6 months ahead of time, but they're not. So that's the reality we have to deal with, so in the last 12 months, that 40% of business being from at-once orders has -- was pushed up to north of 50%, but whether it's 40% or 50%, there's always some element of risk and how you balance the inventories. And so the question you're asking is legitimate, but there's really no better answer to it than what we just said.

And the next question comes from Scott Krasik from BB&T Capital Markets. Scott D. Krasik - BB&T Capital Markets, Research Division: First, pro forma revenue growth first half versus second half, how are you thinking about that? And what factors would get you to the high end of your pro forma revenue growth of 9.9% for the full year?

I would say based on the revenue guidance I gave for Q1, which we didn't give revenue guidance for Q2, but I think it's safe to say we're expecting a slightly higher revenue growth in the back half of the year than the first half of the year, to answer the first part of your question. And second part of your question, what we need to happen to get to the high end of the revenue guidance. Was that the question? Scott D. Krasik - BB&T Capital Markets, Research Division: Exactly.

I think for that part of the question, I think, one, continued momentum in some of our largest brands that we're seeing right now, we would need that to continue beyond Q1 and Q2 and extend into the fall season. And we'll have some more insight on that as the year progresses and give you updates on our Q1 and Q2 call. Scott D. Krasik - BB&T Capital Markets, Research Division: So could you get to 9.9% without an improvement in Europe per se?

Yes. I mean, as we've been pretty upfront. We expect Europe for this coming year, and probably for the next year, we're planning Europe flat. We're planning no revenue increase in Europe.

But with Europe being flat in 2013 will be an improvement over 2012 when it was down. Scott D. Krasik - BB&T Capital Markets, Research Division: Sure. And then -- no, I appreciate that. And then just what's your rationale for expanding Merrell in the family footwear channel?

Well, I think that's probably -- that issue has probably gotten blown a little bit out of proportion. As you know, really, Merrell has been a -- very diligent over the last 15 years when they look at their distribution policy. They run a strict policy, it's strategic, and they enforce it. Merrells are -- always had some business in the family channel. They're planning on a pretty modest and discreet increase this year, well thought out. The brand never been structured to compete on price or -- and it always operates at the premium segment of the market. So even with the planned pretty small increase, modest increase this year in the family channel, that entire channel is going to be very, very low single digit in sales compared with the overall revenue of the brand. Scott D. Krasik - BB&T Capital Markets, Research Division: But it's different price points and...

Different price points, Scott, and product specifically to that channel.

Right. It would be special make-up product. There would be no in-line product, there would be none of the new current production or introductions.

It's interesting, in most of my 5 years with the company, I've had probably more questions about why don't you expand Merrell's distribution, so people can find the brand more than in any other type of question. And then when there's a comment about doing that on a very small scale, some people are taking it the wrong way. But I appreciate that you're asking the question. I know why you asked it. Scott D. Krasik - BB&T Capital Markets, Research Division: Obviously, we're impossible to please. And then, I guess, just last, what's your thought on the running category. You, obviously, guided Saucony to solid growth this year, I'm assuming Merrell outdoor athletic as well. So what's your thoughts on the running category. It's just a manner of you taking share?

Yes, but we also see the running category -- our view is it continues to be very strong. People have not stopped running overnight and switched to basketball shoes. I can assure you there's more races, half marathons, marathons, 10Ks, triathlons going on than ever; virtually every community. So we're not seeing, at this point, any significant falloff in running. As you know running's been the top-growth category coming out of the recession for the last 3 years in terms of growth, and we're still seeing strong demand, albeit with Saucony, our 2 main channels of distribution #1 is they're on specialty channel, full-service, full-price sit-and-fit environment and sporting goods. So we haven't seen any significant slowdown in the running print certainly, at least as evidenced by Saucony's performance.

That was the last question. So I'd now like to turn the call back over to Christi Cowdin for any closing remarks.

Thank you. On behalf of Wolverine Worldwide, I would like to thank everyone for joining us today. And as a reminder, our conference call replay is available on our website at www.wolverineworldwide.com. And the replay will be available through April 16, 2013. Thank you, and good day.

Thank you for participating. That concludes today's teleconference. You may now disconnect your phone lines.