Good morning, ladies and gentlemen and welcome to the Newell Rubbermaid Third Quarter 2011 Earnings Conference Call. [Operator Instructions] Just a reminder, today's conference is being recorded. A live webcast is available at newellrubbermaid.com on the Investor Relations home page under Events and Presentations. A slide presentation is also available for download. I will now turn the call over to Nancy O'Donnell, the Vice President of Investor Relations. Ms. O'Donnell, you may begin.

Thanks, Amy and good morning, everyone. Welcome to Newell Rubbermaid's third quarter conference call. On the call, in addition to myself, are Mike Polk, our President and CEO; and Juan Figuereo, Executive Vice President and CFO. We have a lot of news to cover today, so I'll give you a heads up now that we'll extend the call as needed to make sure that we answer as many of your questions as possible. Now, before we begin, let me remind you that we will be making forward-looking statements in our presentation today. Actual results could differ materially from those projected and therefore, we direct you to the cautionary statements in the earnings release in our most recent 10-Q. The company undertakes no obligation to update any such statements made today. I'd also like to point out that we will be referring to normalized results and outlook, which are not GAAP measures. We present this non-GAAP information for comparative purposes so that investors may better understand and analyze our ongoing operating trends. For further information on reconciliations to comparable financial measures determined under GAAP, please see today's news release and the additional presentation slides posted at our website, www.newellrubbermaid.com. With that, let me turn it over to Mike Polk for his comments.

Thank you, Nancy. Good morning, everyone and thank you for joining the call. We have 2 objectives for today, the first and most obvious is to share a solid set of results for Q3 and certainly a step up in our performance from the first half of 2011. The second is to tell you about some changes we're making to simplify our organization for growth. First, let's get into the results. Our third quarter results represent a step up in our sequential sales trend and good business performance across most of our portfolio. Reported net revenue growth was up 5.8%, core sales rose 3.3%. These are competitive levels of growth and represent solid progress over the 0.2% core sales growth we delivered in the first half. Q3 actuals bring our year-to-date core sales into the full year guidance range of 1% to 3%. Q3 normalized EPS was $0.45, up 7.1% versus 2010 and $0.03 above consensus despite $0.01 negative impact in the quarter from the BernzOmatic disposal. Operating income margin was 13.7%, up 20 basis points versus prior year and 40 basis points versus prior quarter. Importantly, we generated strong operating cash flow of $295 million and strengthened our balance sheet by paying down about $229 million worth of debt. Our debt is now the lowest it's been since 2007. Also during the third quarter, we allocated a little over $24 million to repurchase 1.9 million shares under our 3-year, $300 million share buyback program. Those repurchased shares represent about 0.6% of the total shares outstanding. The 20 basis point improvement in operating margin was achieved despite gross margins being below our expectation at 37.4%, 100 basis points below prior year. Our gross margin shortfall was mainly due to resin and source goods inflation and our choice to maintain price…

Thanks, Mike, and good morning to everyone on the call. In the interest of time, I will refer you to our press release for most of the details so that I can focus on just a few areas of our improving financial results on a normalized basis. But first, let me summarize the salient points of our performance this quarter. First, we generated core sales growth of 3.3%. Second, operating cash flow of $295 million was strong and improved 52% year-over-year. And third, although our gross margin came in short of our expectations, we continued to invest in strategic SG&A to drive demand. In fact, our strategic SG&A increased $22 million, an increase of 11.2% or 7.9%, excluding ForEx, as compared to the year-ago quarter. Structural SG&A decreased $20 million, a decrease of 11.9% versus a year ago or 14.8% excluding ForEx. In North America, net sales grew 3.8%, which represents 3.1% core sales growth, led by the strength of our Tools, Hardware & Commercial Products segment. Sales outside North America grew 11.8% or 3.5% on a constant-currency basis, with Latin America delivering Core Growth of 18.4% and Asia-Pacific 5.5% or 15% adjusted for a onetime Rubbermaid Consumer promotional order last year. Gross margin was a challenge for us this quarter, contracting 100 basis points to 37.4%. We faced 270 basis points of headwinds from input costs and source goods inflation, while productivity contributed a lower-than-expected 80 basis points, due in part to the SAP ramp-up in the core GBU and to volume-driven under-absorption in our hardware business. And although pricing went through as expected, adding 120 basis points, higher promotional activity and a more price-sensitive consumer environment in the U.S. adversely impacted product mix. This was particularly true in our Everyday Writing Rubbermaid Consumer and Rubbermaid Commercial Products business.…

Thanks, Juan. Now, I'd like to turn to Project Renewal. I told you on the last call that our mission is to write the next chapter of the Newell Rubbermaid story and that our ambition is to build a bigger, faster growing, more global, more profitable company. I said we'd do this in 3 stages. We first get the business back into a cadence of doing what we say we are going to do, essentially reestablishing our cadence of delivery. Q3 is the first proof point with respect to what I'd point the delivery stage and we, of course, know we need to string together a number of quarters before we'll be able to credibly put a checkmark in this box. The second stage involves making a series of strategic choices that will enable us to unlock the full growth and value creation potential of our portfolio. At a recent investor conference, I referred to this as the strategic stage. Project Renewal represents an important first step in the strategic development of the next chapter of our story. It's a step designed to liberate the trapped capacity for growth and margin in the business, one also designed to enable us to deal with the higher cost of growth, given the slow to no growth market environment we will inevitably have to face into over at least the next 12 to 15 months. While I will not cover in a detailed way how and where we intend to invest the funds we released through Project Renewal today, I will walk through the changes we intend to make to simplify the organization for growth to essentially set up the third stage, the acceleration stage. Of course, the payoff over time is in this third stage, the stage where we consistently deliver in…

[Operator Instructions] Your first question comes from Wendy Nicholson at Citi Investment Research.

My question has to do with Project Renewal and the fact that it's happening concurrently at -- or at the tail end of the Western European restructuring. Does that make for more opportunity? Is there a risk that it sort of conflates challenges or problems? And how do we know that there isn't going to be sort of the Project Renewal version 2.0 come 2013? Or how committed are you to getting out of the restructuring mentality?

Well, hopefully -- Wendy, first of all, thanks for the question, I think it's an excellent question. There's 2 things I'd like to say in response. First of all, one of the things that I wanted to make sure we didn't do with this -- with Project Renewal is potentially burden anything that's going on in Europe with another change agenda overlaid on top of it. So there's virtually no interception between renewal and the European transformation program and acted -- and our folks in Europe need to be focused on execution as we move towards that April cut over date, SAP cut over date. So this program really doesn't touch Europe. There's no real intersection. There's a couple of exceptions to that but, in principle, that's true. So one of the things that I was looking at when I was thinking about this is whether there's any executional risks that this could create and I don't feel that, that risk exists. With respect to your other question, which is really certainly something that's come up and I know there's a point of view out there about us as a serial restructurer. And I accept that, that's one of the potential headlines that'll flow from this choice. It's the same old Newell restructuring its way to success. That's, in my mind -- look, I can't look backwards, I can only look forward. And as the guy looking at this business right now, I can tell you that the structural SG&A costs are too high, and given our ambition to accelerate the growth performance of this company and given our ambition to build out the geographic footprint of this business over time, we need to do this. Am I going to sit here today and tell you we'll never have a…

Well, it sounds fantastic to me but I just had a quick follow-up for Juan. I think you said you'd reach your target capital structure by the end of next year, but is there a chance we could see a bump in the dividend before then or would you wait till back half of next year for news on that front?

Well, we're feeling very comfortable, really, with the way we're progressing, strengthening the balance sheet. As you know I said it's the board's discretion to increase the dividend. We increased it 60% this year and there should be room, because we said we have a goal of reaching 30% to 35% payout in ratio. We still have plenty of room to increase dividends.

The next question comes from Lauren Lieberman of Barclays Capital.

I Just wanted to follow-up on the restructuring dollars being reinvested, both to support long-term growth, but also to kind of enable delivery in a tough environment next year. Is your thought process that the reinvestment will keep pace with the savings? Or is there a chance that reinvestment runs faster than the savings come through?

No. I mean, I'm just -- I'm more conservative than that, so I wouldn't put the money down until I was really clear I had it in my pocket. So I think I'm going to be very careful about that. I'm not going to lean into the spending. I think we also have to make sure we're really decisive and sharp in the choices we make. So we're not going to sort of spread that money out, like you would a peanut butter and jelly sandwiches. No way, we're going to take a knife and spread it democratically. So I want to put it into very specific things that I think are both offer near-term opportunities but also set the stage for the future. And we'll find the right balance, Lauren. I mean, I'm not going to get into the details today because I really want to bring the organization through the change that we're making. It's a pretty impactful one. It affects a lot of people, both in this building and in other buildings around it, in the U.S., primarily. I want to get through that phase before I disclose how we want to spend the money back, and with what cadence? But we're going to be very careful about how we do this. We have to watch the gross margins. Obviously, the inflation was higher than we thought it would be and we're going to have to make sure we're getting the right productivity against that and the right pricing. And until we make sure we got a very locked in and locked down perspective on that, I'd be reluctant to pull too much money in.

The next question comes from Jason Gere at RBC Capital Markets.

Just sticking to the gross margin topic, I guess one, just with some of the manufacturing consolidation, I just wanted to make sure, talk about your comfort level because I know you're still doing the SAP rollout globally. So that's just the first question.

Yes. Let me just give you some perspective on geographic reach on this program. While there are some things that we're doing outside the U.S. as it relates to Project Renewal, most of, if not, the vast majority of the changes we're talking about are going to be North American focused. And so in North America, we've rolled out SAP. That's behind us with the Decor transition which occurred in August of this year. So I don't think there's a risk associated with the SAP cut over and Project Renewal. We've been very careful to make sure that we kept this program away from any other change work we're doing. Because as you know, you don't get the value out unless you execute it brilliantly. So execution's everything with these programs. And so we've created the right space and breaks between the 2 initiatives.

Okay great. And just thinking about the gross margins, and Juan, talking about the fourth quarter seeing a nice step up obviously to kind of fall into the range. As we think about next year, it seems like SG&A will probably be more in line with this year's levels and some of the savings that comes through to Project Renewal reinvested. But if I look at all the kind of the puts and takes, we should see stronger gross margin next year, productivity pricing, the European savings. I was just wondering if, and I know you guys are still in the budgetary process, but I was just wondering, is the thinking right that gross margin, it should be pretty meaningful and more or less in line with maybe some of the historical levels to kind of drive some of that reinvestment that you need on the SG&A side?

Yes. That's right, Jason. It is fair to assume that our gross margins should continue to expand next year. Part of Project Renewal involves some manufacturing. There's a bit of supply chain that will have a positive impact on gross margin. And we should continue to benefit from pricing take in on the second half of this year and a fairly robust list of productivity projects that we're going into the year with.

Yes. Jason, this is Mike. I mean, the one thing I'd say is we really need to make sure that we continue to drive gross margin forward. I won't get into the details or any of the moving parts in the very near term. But strategically, it's critical that we move gross margin forward. It's the lifeblood of any consumer goods business, year in, year out. At the same time, work hard to get those SG&A rebalanced, so that the SG&A is focused on the things that create demand and less on the administrative side. And those 2 drivers within the P&L are the things that are going to create the upward momentum in our growth rates. And so we have to have the same energy that we've always had with respect to gross margin improvement. It'll become tougher to do that overtime than it has historically been, historically been the last 5 years, because once we get through these last bits of manufacturing and distribution system, the stripping out the excess capacity and therefore, removing the burden of that fixed cost on the gross margins. We'll have to improve gross margin the old-fashioned way, which is through productivity and through strategic pricing through mix and through margin accretive innovation it will have the benefit of some of the structural changes. But it has to be front and center. Every one of our business leaders knows that, and we're going to -- even in tough times like we're in now with the kind of inflation we've got and with high unemployment, limited pricing capability in a flat markets, competitive situations, we still have to remain vigilant and committed to driving that number forward. And I don't see any barriers to us being able to do that. It just may be that the type of gross margin progression we get year in and year out is different from what we saw over the prior 5 years. And we'll have to deal with that by doing some of the other things we're suggesting we need to do.

The next question comes from Mark Rupe at Longbow Research.

Michael, on the 13 to 9 in the GBUs, is it fair to assume that you're happy with the current kind of brand portfolio you have now? Does it roll out any potential rationalization of any business unit?

Look, we have the portfolio we have and I'm happy with the brands we've got. If you listen to the conversation about the brand growth rates, we've got some nice momentum. That said, we've said publicly and I'll say it again here, there's probably 1 or 2 pieces of the puzzle that somebody else might be able to create better value with than we will be able to. But we're talking small pieces of the puzzle, $100 million type of pieces. Just like the Bernzo disposal, there's 1 or 2 of those that we might consider doing. But it's not the most pressing issue we've got out there.

Okay. Then just I would assume that you have more GBUs on the consumer facing stuff. So should we expect that, and so more, I guess, work will be done there?

Well, look, here's where we are and we'll be clear as we can be. As soon as we work through the people side of this, we're talking about a very significant change within the company and in the structure of our GBUs. So in fairness to the folks that are impacted, I didn't want to go as far as I'll be able to go in a couple of weeks with you in terms of describing what that architecture looks like because I want to help people through the change. But once we get that done and we reset those leadership teams, we'll be able to expose to you what that new structure looks like, who the leaders are and why we think that the new architecture makes sense strategically.

Okay and just lastly. One, on the goodwill impairment, can you remind me what the drivers behind that again?

Yes, the way it works is you -- every year, we do an impairment test and basically it's a BCS or the business units where we think there's less cushion. When you run the BCS, you compare that with all the assets, both tangible and intangible, and if it falls short, then if there's an impairment, you have an implied goodwill. And if it's different from what you have in the books, you take the write off. That's basically how it works. So in the case of the baby business, the underperformance kind of quarter after quarter was eating into our cushion. When we got to this quarter, it had -- the goodwill had all impaired by then. Does that answer your question? Is that what you were looking for? [Technical Difficulty]

It does answer.

The next question comes from Chris Ferrara Bank of America.

So the content of reinvestment again, right? So it looks like that the restructuring savings you're talking about would be something in the order of a 25% increase to strategic SG&A overtime. If you just take the basic math and assuming to your point right, you're not going to spread it evenly. It's going to be spread democratically. I mean, you're talking about some real sizable increases in investment behind some businesses, right? And I guess what's your confidence level in the potential returns on that stuff, like, do you feel like you have a good line of sight into how responsive sales and profits will be to that sort of investment?

Well, we're not going to redeploy it until we do. So let me make sure that, that's perfectly clear. We've just come through our planning cycle, at least the bottoms up portion of our planning cycle. What I asked everybody to provide me with was their tops lists, their top initiatives, their top productivity initiatives and also their top unfunded initiatives. And the next phase for us will be to look at all of that in the context of a piece of strategic work we're doing to understand which portions of the portfolio we believe we should bet on most aggressively over the near term. And it's the intersection of both the tactical opportunities in the short term and the strategic perspective that, that work drives that'll inform the choices we make. And I think you have to take a long view on some of these bets. I think most folks wouldn't suggest that you can get a financial return in a very short window on any of these choices. But overtime, you do. And I've said this before. I think we have 2 jobs to be done with respect to accelerating our performance. One is to get more where we are and the second job to be done is to extend beyond and broaden our geographic footprint in select businesses into the faster growing emerging markets. Job one is job one, because it's our first priority. And also because I think those choices will generate a better return because you don't have to add too much fixed costs into the markets where you are today. So if you can accelerate growth in the markets where you are, you get the flow-through of gross profits last year, your strategic SG&A, to flow to the bottom line. And assuming that they're…

My question was, what I was really trying to get at also is what the potential is for some of this to drop down, because you just don't have room yet to reinvest at this sort of rate.

Look, the interesting thing now is as you put money into strategic SG&A as opposed to have it tied up in structural costs, if it doesn't work, you can always flow back, right? You can always just pull it out. So you have way more flexibility with your money and strategic SG&A than you do having it tied up from structural SG&A. So I think we have just so much more -- so many more options with respect to how we use this money in this context than we did just a few days ago. And we're going to be really smart about how we manage this. You have to be rigorous in the analysis, so I hear you guys loud and clear. That's what you're asking us. We don't just throw money at it. We'll make the right choices and we'll bring you along as we do that in the appropriate way.

The next question comes from Connie Maneaty at BMO Capital Markets.

A couple of quick questions. Just to put some dimension on a couple of the changes, what percentage of your SG&A is structural versus strategic? And then as you split, reorganize the company into consumer and professional, could you give us a split on sales and operating profit and margin on the new configuration?

We're not going to do the second part of your question today, I don't think. But we'll have that shortly so you get a sense for that. But on the first part of your question, Connie, it's roughly -- a good rule of thumb is about 40%, 45% is strategic today. And I'm not going to tell you what it will be tomorrow, because we haven't really worked through all of that.

I have a follow-up question on why the cost of delivering growth should be rising? It just seems that the environment has been rough for maybe the last 3 or 4 years, not just right now. So what has changed, especially if the gross margin should be expanding next year? I mean, for many of Newell's category growth has come primarily from gaining market share. So what's really changed?

Well, I think the market dynamics are a little bit worse today than they were a year ago, for sure. And you've got 2 consecutive years of flat to no growth markets. So what happens is in that environment, you've got the intensity of competition picks up and people who don't have strategic things to bring to market have to fight on price. You saw a bit of that in the back-to-school window, particularly in the Everyday Writing business, where some of our competitors really had to push the price points down. And so we're -- and Connie, it increases the importance of whatever you're bringing strategically to market. You have to make sure you're supporting that properly. And then occasionally, you need to protect your flank from a pricing perspective. So that would be my answer to your question.

How do you think of the balance of market share gains at -- would you rather gain market share at lower margins or is profitability overall more important?

I want to grow our business profitably, I guess, is how I would answer that question. It's not one or the other, I want both. And I certainly don't want short-term growth that doesn't stick. That's not useful. So I think -- I said this the last time we talked. What our marketers need to be thinking about is about developing their markets. They, of course, want to do that through our -- and we will do that through our branded assets. And so what I want them thinking about is expanding the size of the pie and leveraging our brands to do it. Now, we should build market share when we do that. If you do that, you have a good chance of both expanding gross margin and accelerating growth. If you don't do that, then it's tough to expand gross margin and deliver the growth. And so market development becomes the mandate for our marketers. I'm not interested in share shifting between us and the competitors. That's a road to nowhere. What I'm interested in is bringing more strategic initiatives to market that expand the relevance of the categories. That's what our retailers want anyway. They want us to build their business, not simply steal the other guys' market share, so that they get more revenue per linear inch and they get a return on invested capital. And that's what we should want, because if we expand our markets, we end up not having to apply tactics to grow. And it's those tactics that end up compressing gross margin. So market development's the key to avoiding the trap that you described upfront in your question. Connie, I sort of fumbled a number with you. You asked a question on SG&A, the balance of strategic SG&A to total SG&A and I had it inverted. So it's about 60% as opposed to 40% to 45%. It's the other way around. It's 55% to 60%.

55% to 60% is what you think...

Yes, yes.

The next question comes from Ann Gilpin at Jefferies. Ann Gilpin - Jefferies & Company, Inc., Research Division: I kind of wanted to follow-up a little bit on the gross margin question. What really surprised you on the gross margin line this quarter? Was it the inflation or did you decide to do more promotions than you initially planned? And can you also talk about that in the context of your Q4 expectations?

Well, look, I mean, the headline on gross margin -- I'll give you the facts on gross margin. We had inflation built into our gross margin forecast. Not quite as much has actually occurred. So we got more than we thought we were going to get in a couple of areas. And one of them, I think, is just a timing issue where markets will break. But because we don't buy the primary commodity, the commodity we've got or the input -- the raw material we have is a derivative of that commodity. It's simply a timing issue. So we anticipate it getting in more of a benefit faster into the P&L than we did. The other is that, as I mentioned in my comments, we had 3 businesses where things were a little bit more heated in terms of promotional requirements, and again, the way to really get yourself in trouble from a gross margin perspective long term is to not win those competitive battles. So in Everyday Writing and Rubbermaid Consumer and Rubbermaid Commercial, we had to deploy a little bit more promotional investment than we really thought we would have to in the quarter in order to deliver the outcomes we wanted. I don't love it and I wouldn't lead it, but if that's what it's going to take to hold your share position, then you have to do it, because market share is critical to the success of our business. And if I have to play defense in order to preserve the right to go on offense at a later date, that's what I'll do. And that's what I said in my comments, and I know you guys don't probably like it that much, but it is what it is and that's what you have to…

It's an excellent question, Ann. The work that we're doing now to that I referred to earlier about strategic choices and the disciplined approach to resource allocation will inform the answer to your question. I don't think -- I hope there's a path right into our strategic guidance range, but I just don't know yet our long-term guidance range. My instincts tell me there are in the short term. I've said what I said at the Barclays conference and I said what I said today, which is our core growth of 3.3% in the third quarter and our EPS growth of 7.1% are good reference points. I think those are, and I'm not saying I'm not guiding to those numbers, because there's always going to be a range around them. But I think they're good reference points for now. We had good share results in Q3 and that enabled that outcome. It'll take some help from a category growth perspective so the tailwinds that I referred to and obviously Project Renewal to get us into that -- to free up the resources to be able to invest to get us into that range. But I'd rather not declare at this point my perspective on long-term guidance. I think we need to do the work the right way, which we're doing, we're talking to the board about it on the week after next and we have another board meeting in February. And we'll probably -- it's a work in progress. We'll probably engage with the board in both meetings on that subject and then we'll talk to you roughly around that timeframe, both the strategic path forward and our view on long-term guidance. Ann Gilpin - Jefferies & Company, Inc., Research Division: And if I could just ask a clarification question, obviously Baby & Parenting improved nicely and sequentially. It sounds like some of that was shipment. Did you say that sell-through also improved sequentially or is that still -- has that improved or not?

We're getting the sell-through we expected on these things. I would love to get more. And what I said was that we have a strengthened promotional plan in the back half of the year. I want to see how that impacts the trial on these products. Look, I'm not sitting here and telling you that we've got these things stabilized yet. Our results, our business in Japan is on fire. So the Aprica business in Japan is something to get very excited about. But it's a small portion of the overall Baby & Parenting businesses. The business was flattered in the third quarter by the pipeline, the sell-in of new products. And it's just a little premature to know whether those guys have all got the traction we want them to have. But even if they did, that's not the answer for us. I think we have a more fundamental sort of strategic questions that need to be answered on this business, which I laid out. And I can tell you, Christie Juster, whose coming to lead this business, is an excellent leader. And I'm really certain that she, with my direct involvement and with the support of a number of people that have Baby & Parenting experience in the organization at senior levels, will be able to figure this out. There are some really sticky issues in there that I also spoke to that could govern the rate with which we're able to turn this thing around. But strategically, this should be one of our most interesting businesses. 7 billion people in the world going to 9 billion. If you look at the demographic profile of people in the emerging markets, they're all young, they're all having kids and governments are getting involved to ensure that children are taken care of in the proper way. For example, there's no car seat legislation in China yet. So there's no requirement for kids to be in car seats there. So figuring out how to participate in what is bound to be terrific category expansion over the next decade, and this category is really important, but we have to be able to create value while we participate, and that's -- obviously, we haven't over the last period of time. That's why we took the impairment charge we did on Baby & Parenting. And so we can stabilize this. We can probably get it back to growth, but we have a set of strategic answers that need to be articulated about what we want to do over the next decade in this business and how we do it. And that's where I need to be involved. That's where Christie will play a critical role. And that's where I'll tap into all the expertise that sits in around my table to help answer those questions.

The next question comes from Bill Schmitz at Deutsche Bank.

I think we talked about a lot of those sort of long-term structural stuff. Did you guys decide on what you think the right dividend payout ratio is for this business?

Yes, we want to have a competitive dividend payout ratio. How we get there from here is a question mark. And actually, the board is the one that is going to make that call. But we simply want to try to get our dividend payout ratio closer to 30%.

Okay, I get it. I think the competitors are closer to like 40% to 45% though.

That's okay. That's their choice.

You said competitive.

Yes. I am competitive on multiple fronts [indiscernible].

How about hedging going into next year? Because I'm sure it's not loss on you guys, but the first quarter gross margin comp is obviously pretty difficult. Is there anything we should be mindful of, just as we kind of build the models for next year?

Hedging. We typically buy forward metals. In the case of resin, we go a little shorter because there's really no ability to hedge. About 3 months is about the best you can do. So we have some visibility there. In terms of the Q1, you're right about the comps. Remember that the year before, we had unusual overhead absorption in Q1.

Okay, got you. That's helpful. Just on the European front, is Europe going to make money this year? Because I know there's kind of a qualitative 10%, but are you guys making progress on that front?

We're actually making very good progress, Bill. We feel -- remember that when we talked about the Europe transformation, there were 2 big buckets. There were the operating income improvements and we said our goal was to get to 10%. And then there's the tax benefits from the EPC structure. On the OI benefits, they have been coming in. But the end of -- year-to-date Q3, Our OI in Europe will be 10%. That compares with 8% in the previous year and less than 2% in 2009. So the benefits are coming through there. Once we get the EPC and the SAP system implemented in Europe in April of next year, then the tax benefits also begin to accrue. So I think we're making very good progress there.

Okay, great. And then I know you don't want to talk about customers, but I think it's going to be in the 10-Q. Can you just talk about what Wal-Mart was as a percentage of the sales of this year versus last year?

Yes. It was 12.5%, Bill. And it was down a point versus prior year. So 13.5% in the year-ago period.

Okay, but that's getting sequentially better. I mean, just broadly speaking, did you have relationships getting better, it was never really impaired?

No. Gosh, no. I mean, we -- look, Wal-Mart's absolutely a critical customer as are all our other customers. One of the things, Bill, that I talked about when I was mentioning capabilities, was we need to strengthen this area in our North American business. And I've always had a philosophy that you need to collaborate your way to great performance. And I believe that's right. And you need to look at value creation across the total enterprise, not just where our business system stops. And it's through those types of partnerships that you get the differential treatment in the relationship. And we've got a ways to go to build that, but I'm confident we will. And having had experience doing that in other roles, I'm pretty convinced that we've got a path forward there that will strengthen our connections.

Great. And then just one last one, if I could. Have you shared with the category captains at the -- I'm sorry, the buyers, the various retailers, the plan to invest more money into the categories yet? Or is that still on to come?

No. We have not shared that in part, because we haven't made the choices about where we're going to deploy it. But that's all in front of us.

The next question comes from Bill Chappell at SunTrust.

Just want to parse through the revenue guidance comment you made of saying the mid-to-high end of your long-term range is probably going to be more of a challenge for next year. Is that just an easier way to say 1% to 3% is kind of our goal?

Well, I'd be disappointed on 1% to 3%. So we just delivered -- what I said though, was a good reference point is what we've just delivered in Q3. And so, again, I haven't given specific guidance. But, yes, if we were at 1% core sales growth, we'd be having pizza for dinner every night.

With that -- I mean, as you look at the Baby & Parenting, I mean, I know you're doing a lot to kind of change that business, but as you look to next year, do you think the category can rebound or is it one where we're kind of flatlining for a while?

Look, it depends on the macros. I mean, I think that's the biggest issue. You look at birth rates in Europe. You look at birth rates here. It's just they just haven't recovered. Do we see the negative impacts if birth rate declines further? At this point, no. But we don't see some major recovery. And I think that has to do with the macro environment we're in. It's just going to be tough for a while. And it's good to see what's going on in Europe. I think that averts a crisis, but actually doesn't deal with the fundamental issue of jobs and economic growth and neither have we here in the U.S. And until we turn that corner, I think the structural headwinds we've got are going to be with us. That's why I say that we're going to be living with slow to no growth markets next year. I think that's the right planning assumption to make, because I don't see the catalyst to change. And that puts an increased burden on our marketing and selling capabilities, and that's what we're trying to address through renewal.

Okay. And then just one last one. Just trying to understand kind of the SG&A going into next year. I mean, with a lot of the projects costs or savings being headcount reduction, I would imagine by kind of January 1, you're going to see a fair amount of savings. So should we see SG&A kind of as a -- be lower than average in the first half of the year and then ramp up as you finally reinvest that business? Or should it be steady? And I would think it's a big drop until you really decide where you're going to redeploy it.

Give us the chance to work through the numbers, Bill, because we're still trying to figure out where are the right investments, what is the timing? But you're right about 70% of the savings are people related. So they should come in fairly fast. But just give us time to work through our budget.

You're not going to give me a...

We've got some interesting things we're doing in the first quarter that I think will benefit from some increased support. But I can't remember who asked the question about making sure you're disciplined about getting a return on it. I want to go through that before I declare, Bill. And that's -- we've been working hard to get to this point, to make the choices on the design of the organization, to make the choices on who to put in the key roles and we got another week of communication and appointment work to go on. And then we're going to -- I want the new leaders in those jobs to make their pitches and choices. And we'll -- so we have a month to work here. I've said we're going to be a little bit more interventionist from the corporate perspective and not just let this company be the sum of the parts and the motivation being trying to make the whole greater than sum of the parts. So there are clearly some things that I think we should put money behind in the first quarter. But will we go for broke? No, I really want to see how the gross margin story plays out.

The next question comes from Joe Altobello at Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: We've covered a lot of ground here this morning, so I'll just keep it brief, maybe a couple of one’s here. First, on Baby & Parenting, if you put aside the pipeline sale given what you've seen over the last 3 months with Century, by Graco, with Aprica, are you more or less hopeful that, that business could actually grow next year?

Well, Joe, I mean, we certainly have easy comps in the first part of next year. But if we were to grow in the first part of next year, I wouldn't be all flush and proud. We should grow in the first part of next year. I really am more concerned about strategically how we build this business over time. And I think it is a little bit longer to get our European business moving in the right direction. We've got some innovations that are flowing in to the business at the end of 2012 that will participate in some really important growth opportunities there. The challenge here is that it's an awful long lead time to do real breakout innovation in this category, from concept to market is a fairly long period of time. So I'm not going to tell you what we're going to do next year in this business. We should be able to grow this business unless something else dramatically happens. But again, I wouldn't -- I think we're going to be talking about Baby & Parenting, virtually every one of our calls for the next number of quarters, probably into 2013. Joseph Altobello - Oppenheimer & Co. Inc., Research Division: Okay, that's helpful. And then just secondly, on some background on Project Renewal, is there something that was in the works prior to your arrival, Mike? Or is this something that came about the last 3 months? And I guess, the reason I'm asking is because this has been something that has been an issue at Newell for years now in terms of the whole structural SG&A and trying to eat away at that. So did you guys feel like the organization had to be at a certain place to do this?

Look, I'm glad we have the growth and we've gotten back into this cadence of delivering Q3, because we had confidence that the organization understands what we need to do and can deal with -- change management is always a challenge. So it gave me the -- when I saw that coming in, it gave me the confidence that we could move fast. Obviously, I just finished my third month, so obviously, these choices are occurring very fast. The thing you got to remember is I had the benefit of sitting on the board for 2 years from November 2009 before becoming the CEO. So it's not all new to me. And some of these things were things that I've been thinking about before coming into the role. So it's not -- I think this is a very well thought through set of choices and it's obvious to me that we need to attack the structural costs because we're not going to get the 100, 200 basis point gross margin improvement year in and year out that we got through the 2005 to 2010 period that came through stripping out excess capacity in the manufacturing and distribution network. We have this one last bit of work to do there. And then, like I said, we've got to deliver gross margin the old-fashioned way, and that's tougher. And so you can't expect that going forward, you'd get 200 basis points here in gross margin improvement. So if you don't believe you're going to get that, then you have to go after the structural SG&A in order to have the strategic SG&A you think you need to accelerate performance. And that was the framework and the logic for the choices we've made, the business case for the choices we've made. The design itself and the people choices, Jay's decision to pursue a big job on the outside. Jay's choice is an enabler to this and the specific design is something that's come together over the last 3 months. That was not something I walked in with a point of view on.

The next question comes from Dara Mohsenian at Morgan Stanley.

Juan, I wanted to get some more clarity on the pricing you took in the quarter. It sounded like promotion was heavier than you expected. But I was hoping for commentary on if list pricing was implemented as you expected and where the consumer demand, the elasticity, the higher pricing came in versus what you had forecast.

I'll talk to the numbers and then I'll let Mike jump in with the qualitative aspects. In terms of the pricing, we actually got a little bit more pricing than we were expecting. Pricing read through in the quarter. Actually on the gross margin side, it added 120 basis points. Now, when we talk about promotion, it's not necessarily price soft, so it's not necessarily pricing. It's also how you feature what you feature. So promotion has an impact on mix. In the case of back-to-school, a lot of the pressure that we're talking about really came through mix as consumers made and retailers also chose to display the products that had the lower price points and consumer gravitated towards those.

On the question regarding price volume mix, and I think that the specific category that we talked about in Q3 is Rubbermaid Consumer. We're just getting into that window now where we'd start to see repeat purchase. This is a different purchase cycle than the businesses I've come from, where you get a purchase every 5 -- 4 or 5 weeks. They're high velocity categories. This one is not so much. You maybe get 2 purchases annually, 2 to 3 purchases annually. So you don't get as quick a read on the volume price impact. We'll get that in the fourth quarter on Rubbermaid Consumer. But where we see competitors moving their price, we're dealing with that. And we deal with it through tactics or we deal with it through better display programs. As Juan was suggesting, it's not always price. But it's a little early to declare whether we've got the price volume numbers called right. That said, Rubbermaid Consumer came in right where we thought they would in the quarter in aggregate.

And Juan, can you give us your full year tax rate expectation also?

It should be 28% normalized tax rate for the full year.

Our next question comes from Linda Bolton-Weiser at Caris. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: Can I just ask -- I noticed there's been a lot of questions about the Baby & Parenting business, but I also follow Mattel and they have a baby gear business, which actually has been posting pretty decent growth lately. But they don't do strollers and car seats, they do like high chairs and playpens and swings, I think. So can you, like within the whole category, is there something that's structurally unattractive or problematic about car seats and strollers that makes that more unattractive than some of the other areas? Because Mattel made a very specific decision at some point in time to not do car seats and strollers. So can you just like share some of your knowledge about that, if you can?

Yes. Look, I think obviously, our biggest businesses are Graco business. And Graco sits right in the heart of the market from a positioning standpoint. And this is the most economically-stressed consumer out there. And when you're talking about car seats and strollers, you're talking about big-ticket items. And so unlike apparel or some of the gear, other gears that others might sell, these are big outlays. And in that environment, in the environment we are in, with the brand positioned where it is in the market, we have the full force of that headwind that we're having to deal with. We're in the car seat in the stroller market. That's our business and we're also obviously -- we've got a great playpen business. That's where we're going to stay and develop from, our path forward from. So whether there are structural issues there or not, I mean, that is who we are and we're going to have to face into them. But I'm surprised that others are optimistic given the dynamics we see and we look very closely at the category dynamics. And while things will improve as we lap the really, really tough periods. The market trends will improve because you're up against easier comparisons. I don't think structurally, that much has changed. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: Okay. And then can I just ask you also, sometimes I get the question about your company, about why cash flow, like the operating cash flow level is about $500 million or so these days, whereas a couple of years ago, in '06, '07, operating cash flow was more like $650 million? Like, what is going on there in terms of your business is about the same size as it was in '06, '07 and yet it does seem like the operating cash flow level has significantly shrunk.

Yes. Well, the business is not the same size actually. The top line is smaller than it was in '06. When you look at cash flow as a percentage of sales, you can see that it's either steady or increasing. Actually, last year was one of our higher cash flow delivery years, around 10%. It is improving. Remember that we are investing still significant behind SAP, for example. So our cash flow delivery is strong today and I see it getting stronger in the future. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: Okay. And can I just ask, I missed the very beginning of the call but did you give the gross margin performance and did you say if there was an impact from inventory reduction that was reflected in the gross margin?

No. We didn't comment on inventory reductions in the gross margin. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: But commodities were clearly still a negative impact...

If you look at the commodities, where the impact of commodity -- of the input cost, not commodities, of input cost because we have sourced business in there as well. The impact of input cost in the quarter was negative 270 basis points on gross margin. Linda Bolton-Weiser - Caris & Company, Inc., Research Division: Well, I guess, what I'm asking was inventory reduction a negative impact on the gross margin in the quarter?

Not materially. The reason that's true is because you have inventory reduction every third quarter. So it's the change and the change in inventory reduction that would make an impact on gross margin.

Your final question comes from Budd Bugatch at Raymond James. Budd Bugatch - Raymond James & Associates, Inc., Research Division: Congratulations on the quarter. The performance in the quarter and keeping the guidance in the face of the macro. And I do have other questions, but I'll address them off-line because the call has lasted too long.

This concludes today's question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Thanks again for joining us today. Let me close by reiterating that we're very pleased with the progress we're making and the sequential improvement in the financial results during the quarter and excited -- I remain very excited about and energized by the opportunities we have. We talked a lot today about what we've got to do and I'm certain there will be bumps along the way. But I'm clear that there's a path towards a bigger, faster growing, more global, more profitable company. And I'm committed to getting us there. So look forward to keeping you updated along the way. Thanks, everybody and thanks for the questions. Talk soon.

If we were unable to get to your questions during this call, please call Newell Rubbermaid Investor Relations at (770) 418-7075. Today's call will be available on the web at newellrubbermaid.com and on digital replay at (412) 317-0088 with an access code of 10005541 starting 2 hours following the conclusion of today's call and ending November 13. This concludes today's conference. You may now disconnect.