Leslie H. Kratcoski - Vice President of Investor Relations Nicholas T. Pinchuk - Chairman, Chief Executive Officer and President Aldo J. Pagliari - Chief Financial Officer and Senior Vice President of Finance

Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division Michael J. Wherley - Janney Montgomery Scott LLC, Research Division Richard J. Hilgert - Morningstar Inc., Research Division Gary F. Prestopino - Barrington Research Associates, Inc., Research Division

Good day, ladies and gentlemen, and welcome to the Snap-on Inc.'s 2011 Fourth Quarter and Full-Year Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Leslie Kratcoski, Vice President, Investor Relations. Please go ahead. Leslie H. Kratcoski: Thanks, Yolanda, and good morning, everyone. Thanks for joining us today to review Snap-on's Fourth Quarter 2011 results, which are detailed in our press release issued earlier this morning. We have on the call today Nick Pinchuk, Snap-on's Chief Executive Officer; and Aldo Pagliari, Snap-on's Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Aldo will then provide a more detailed review of our financial results. After Nick provides some closing thoughts, we'll take your questions. As usual, we have provided slides to supplement our discussions. You can find a copy of these slides on our website next to the audio icon for this call. These slides will be archived on our website along with the transcript of today's call. Any statements made during this call relative to management's expectations, estimates or beliefs, or otherwise state management's or the company's outlook, plans or projections are forward-looking statements and actual results may differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in the forward-looking statements are contained in our SEC filings. With that said, I will now turn the call over to Nick Pinchuk. Nick? Nicholas T. Pinchuk: Thanks, Leslie. Good morning, everyone. Well, our fourth quarter represented an encouraging performance to cap off the year. The progress was not only reflected in the financials, but it also can be seen in our strategic advancements. The Snap-on Value Creation Processes, the principles and processes we use everyday to guide our actions, they're driving results. Our focus on safety, quality, customer connection, innovation and Rapid Continuous Improvement or RCI, as we often call it, it's paying off. And we believe the advancements made throughout 2011 on our runways for both growth and improvement position us to go forward with strength. Aldo will provide detail on the financials. But first, I'll offer some of my perspectives on the highlights for both the quarter and for the year. Sales in the fourth quarter were up organically by almost 6% from 2010. Operating income rose about 30% with our operating margin of 16.3%, up from 13.5% last year. Now that profit increase, of course, included some substantially higher earnings for Financial Services. As expected, that rise came right along with the continuing buildup of our on-book portfolio. But before Financial Services, the operating margin was 14.1% and that compares to 12.6% last year and represents a new high for Snap-on for any quarter. With respect to the economic environment, the events in Europe are creating a bit more of a headwind. I don't think that'll come as a surprise to anybody. I would, however, still characterize our overall market on balance as favorable, fairly stable and you see that in our overall sales growth. Just as we've demonstrated since the recovery began, we were once again able to gain position and to find the pockets of strength that allowed us to offset areas of external weakness. I told you during the discussion about 3 months ago that our third quarter sales volumes, excluding the effects of currency movements, were above the pre-recession levels of 2007 and 2008. That was the first time we could claim an overall recovery in volumes. While the fourth quarter continued that overall trend, today we're reporting results that exceed fourth quarter 2007 levels, which is the most appropriate pre-recession comparison. And in addition, sales increased sequentially off the third quarter, consistent with our normal seasonality. So while Europe does pose some challenges, we are maintaining our momentum. Now for some highlights from each of the segments and a discussion of our advancements in 4 strategic areas, extending into critical industries, building in emerging markets, enhancing the franchise network and expanding in the repair garage. We've identified these runways as being decisive for our future, and we made solid progress in each of them during the quarter and, for that matter, throughout 2011. In the Commercial & Industrial segment or C&I, organic sales increased almost 5% in the quarter. That growth was somewhat higher than the past couple of periods. So while C&I was where we see the most impact from the challenges of Europe due to our large hand tool operation in the region, SNA Europe, we actually saw better year-over-year comparisons than we've been posting recently. That progress was due to the gains in our Industrial business and to our continued growth in emerging markets, both in C&I. The C&I segment margin for the quarter of 11.2% was down from last year's 12.6%, largely reflecting the $2.9 million in additional restructuring charges and some challenges to the profits at SNA Europe, as that part of the world is obviously not yet recovering. That margin rate, however, was improved from what we saw in the past couple of quarters, reflecting the relative strength of our Industrial businesses, which posed double-digit growth and reached new performance highs. Speaking of our Industrial division, we made good progress throughout 2011, we said that on these calls, extending into critical industries. In the earlier periods, however, those gains were somewhat masked by the lower military activity. In fact, it was actually real positive that the reduced military volume was effectively offset by our growth in serving the other critical industries. But now, our gains in critical sectors such as aerospace and natural resources are showing through. They're visible. That activity in those areas is supported not only by the innovative Automated Tool Control or ATC system, which is somewhat of a halo product, and has garnered a lot of important attention. But it also reflects -- that attention also reflects a wide array of hand and torque and power tools, all designed specifically to make the work easier for customers in critical industries. It's that expanded offering and the increased focus that's driving the rise in orders to support flight lines, assembly facilities, maintenance, repair and overhaul operations, oil rigs, mines and power plants, and giving us an ever-growing presence. C&I is also where we see much of the benefit from our emerging market strategy. Now when you say emerging markets, everybody naturally thinks of China, but our emerging growth is rooted more broadly. In the quarter, C&I saw double-digit gains across Eastern Europe, including in important markets like Russia and in Turkey. So 2011 was a strong year for our emerging markets where we saw large gains, not only in the countries I just mentioned, but across Asia as well in places like Indonesia and Thailand and of course, in India and China. And we're supporting that growth with investments. During the year, we expanded our band saw capacity in China and in Minsk, and it's paid off with substantial new customers and volumes across the globe. In China alone, we now have more than triple band saw capacity since our start up. This past year, we also launched a handheld diagnostics unit specifically for the China market, and our Asianized undercar equipment line is making solid inroads with local automotive repair customers. When we spoke of emerging markets, I've said in the past that succeeding there is often about presence and physicals, and we're showing our commitment to that belief by building. For example, in China, just this past quarter we opened another facility, our new state-of-the-art Engineering Center at our complex in Kunshan. And in 2012, we'll be expanding again with a new undercar equipment factory aimed at making sure that we can continue to serve that growing local market. Now let's move on to the Tools Group. Sales in the fourth quarter rose over 9% organically. Operating margin at 13.5% was up from 9.6% in the fourth quarter of 2010. Now I'll remind you that in 2010, the 2010 number included a $4.6 million restructuring charge related to consolidating the North American tool storage production into one facility. But while the year-over-year gain is somewhat amplified, the fourth quarter rise to 13.5% still represents a 230 basis point increase even after adjusting for the favorable restructuring compares. The quarter's result, taken together with the full year operating margin at 13.7% for the Tools Group indicate clearly that, that operation is showing significant positive momentum. Given that one of our key priorities we set for ourselves years back was in fact, strengthening the van channel, I'm encouraged that it appears to be quite robust as we enter 2012. Throughout last year, I was able to point out significant progress in that area. Snap-on being ranked #6 of all franchise opportunities by Franchise Direct and the Frost & Sullivan survey, more recognition of Snap-on by professional technicians as their preferred brand by larger margins, wider than ever before, and awards from MOTOR Magazine and Professional Tools & Equipment News for innovative products that make the technician's job easier. But more importantly, more important than outside recognition, the best testimony to a strong system comes directly from our franchisees. They've told us in confidential surveys and in public discussions that overwhelmingly, if given the chance to do it all over, they would again commit to a Snap-on franchise and they would also recommend the opportunity to a friend or family member. That may be the best endorsement we can ever get. Just this past week, and I spent a weekend -- just this past month, I spent a weekend with a number of our franchisees during the annual kickoff meetings and their enthusiasm, I'm telling you, confirms the progress we've made. They tell me that one of their big advantages while out calling on technicians is our captive finance companies, Snap-on Credit. Our successful transition from a joint venture to a wholly-owned Snap-on entity without our customers' experience, and any disruption was certainly a key factor in maintaining the health of our network and in supporting the global growth we've been posting. The credit companies' portfolio continues to ramp up onto our book. It's performing well and it's adding to our bottom line. But more important than the financial returns, in today's world of tight credit, our franchisees and our technician customers are benefiting significantly from access to consistent and available financing. And we see it in the numbers. The growth in the operation -- so that's some color on the state of the tools. The growth in that operation has been substantial. And I can say that all of those things I've just mentioned are driving the growth, and we are very encouraged by the results of the Tools Group in this period, it's showings strength. Now for Repair Systems and Information or the RS&I. Fourth quarter organic sales were up 2.4%. The operating margin was 20.8%, and that compares to the 19.7% achieved in 2010. The growth in the operation was somewhat muted by our undercar equipment business, which is the other area where we have exposure to Europe reflecting our significant market position in that region. Remember that the RS&I businesses are focused on serving repair shop owners and managers, and they're working to expand our strong brands of products throughout the repair garages of the world. I mentioned our equipment product position in Europe. Well, in the fourth quarter, we reinforced that strength when we launched our updated V3D aligner in Paris. That new product offers some attractive productivity enhancing features such as a VIN reader that automatically loads the vehicle's specification, and an improved user-friendly technician interface. Both innovations that simplified vehicle alignment. And as you might imagine, the new unit was quite enthusiastically received. We also continued to get great reviews for our new diagnostic wheel balancer, which was recognized by MOTOR Magazine as one of the top 10 products. I mentioned it last quarter, our unique imaging technology providing a digital map of actual and predicted tire wear and heading off problems with a quick balance and just a few spins of the wheel. That product is now being placed in training facilities where technicians learn and/or enhance their craft. Both the new aligner and the new balancer represent just the type of innovation that we continue to roll out. And we believe that, that's the key to gaining position and to overcoming economic challenges -- offer products that pay back through productivity, gain committed users who are trained using those very products. As the economics for the automotive OEM seem to be improving, we've seen those manufacturers commit to new essential tool requirements, customized diagnostics for both their U.S. and European dealer bases, and we're getting our share of that business. We're also expanding into near adjacent segments. I've spoken in the past about growth in the medium and heavy-duty commercial vehicle sector with repair informations and diagnostics products that capitalize on our unique knowledge, bringing it into that sector. In that same manner, we're also able to take that information technology and that diagnostic know-how and apply it to areas such as agricultural and construction equipment. We're starting to get traction there and both those areas represent attractive opportunities. And when you reach further into that same segment, we also see that our Electronic Parts Catalog or EPCs, products that work so well in aiding vehicle technicians to prescribe, locate and order just the right part, also had important applications for those working on agricultural and construction equipment. Our EPCs are also becoming a valuable opportunity in this space. As I mentioned in the past, our overall EPC business was challenged by the decline in the U.S. automotive OEM dealership group tax. So we've been extending to other opportunities. Our expertise in serving independent repairs, repair garages with shock management repair information and handheld diagnostics gives us, we believe, a unique customer connection and an insight into those customers' needs. We've taken that advantage and successfully deployed an all made EPC called more [ph] for the independent markets. The product offers the independent shop an access to the parts operations of OEM dealerships, providing availability and pricing and parts ordering information. And this is a business in which both dealerships and independents want to participate. Now integrated with our Mitchell 1 shop management software, the combination offers even more efficient workflow and productivity in the independent shops throughout the United States. You can see by this discussion I think that we're working across the corporation to provide a full array of products to repair shops and our managers, from diagnostics, to repair information, to shop management software, to undercar equipment and including customized tool storage units. It's paying off with independents and with OEM dealerships. In fact, many of the larger dealerships are outfitting their shops with a consistent professional look that is more and more demanded by OEMs, all while providing great productivity solutions, and we're helping them do it. Well, those are the highlights. Organic growth in the quarter of almost 6%, encouraging from an overall post-recovery perspective. Operating income increases at both OpCo and SinCo [ph], reaching new highs, our areas of strength combining to more than offset any headwinds. An abundant evidence, clear evidence that we're continuing to take strides, clearly moving forward along strategic runways for coherent growth. It was an encouraging quarter. Now I'll turn the call over to Aldo for a detailed discussion of the financial results. Aldo? Aldo J. Pagliari: Thanks, Nick, and good morning to everyone. Our consolidated operating results are summarized on Slide 6. Net sales in the fourth quarter of $736.6 million increased $39.7 million or 5.7% year-over-year. Excluding foreign currency translation, organic sales increased 5.9%, reflecting sales growth across the majority of our businesses. Higher sales in the Snap-on Tools Group combined with increased sales to a wide range of customers in critical industries and emerging markets, higher essential tool and facilitation program sales and higher sales of diagnostics and Mitchell 1 software products more than offset weakness in Europe, particularly in the southern regions. Consolidated gross profit of $335.8 million in the quarter increased to $17.3 million from 2010 levels. As a percentage of sales, gross margin of 45.6% in the quarter was comparable with last year. Operating expenses in the quarter of $232 million were on par with 2010 levels. As a percentage of sales, operating expenses of 31.5% in the quarter improved 160 basis points from 33.1% last year, largely due to benefits from sales volume leverage, savings from RCI and restructuring initiatives, lower bad debt expense and lower stock-based mark-to-market compensation expense. These improvements were partially offset by higher performance -based incentive compensation expense and $2.6 million of higher pension expense. Restructuring cost the $4.4 million in the quarter compared to $5.8 million last year. Operating earnings before Financial Services of $103.8 million in the quarter increased $16.3 million or 18.6% from 2010 levels. As a percentage of sales, operating earnings before financial services improved 150 basis points from 12.6% last year to 14.1% this year. Operating earnings from Financial services of $22.1 million in the quarter improved $12.7 million from 2010 levels, reflecting the continued growth of our on-book finance portfolio. Consolidated operating earnings of $125.9 million in the quarter increased $29 million or 29.9% from 2010 levels. As a percentage of revenues, operating earnings of 16.3% improved 280 basis points from 13.5% a year ago. Our fourth quarter effective income tax rate of 33% compared with the 30.1% rate of last year. The lower 2010 rate benefited from nonrecurring tax items, including the December 2010 extension of certain federal tax incentives. Finally, net earnings of $74.3 million or $1.27 per diluted share in the quarter were an all-time fourth quarter record, up $16.4 million or 28.3% from last year's levels. Now let's turn to our segment results. Starting with the Commercial & Industrial or C&I Group on Slide 7. Sales of $295.4 million for the fourth quarter increased 4.9% from 2010 levels. Higher year-over-year sales to a wide range of customers in emerging markets and in critical industries, particularly aerospace and natural resources, were partially offset by the weakness in Europe. Gross profit of $106.4 million in the quarter declined $1.6 million from 2010 levels, largely due to $2.9 million of higher restructuring cost, incurred to further improve the segments cost structure in Europe. In addition, benefits from higher sales and RCI incentive were partially offset by margin pressure in Europe. Gross margin of 36% in the quarter compared with 38.4% last year. Operating expenses of $73.4 million in the quarter were up slightly from 2010 levels. As a percentage of sales, operating expenses of 24.8% in the quarter improved 100 basis points from 25.8% last year, primarily due to benefits from RCI initiatives and sales volume leverage. Fourth quarter operating earnings of $33 million for the C&I segment declined $2.4 million or 6.8% from 2010 levels, largely due to $2.7 million of higher year-over-year restructuring costs. As a percentage of sales, operating margin of 11.2% in the C&I segment compared with 12.6% last year. Turning now to Slide 8. Fourth quarter sale from the Snap-on Tools Group of $292.8 million improved $24.6 million or 9.2% from 2010 levels, largely due to continued higher sales in the United States. Gross profit in the Snap-on Tools Group of $123.9 million in the quarter increased $16.7 million from 2010. As a percentage of sales, gross margin of 42.3% in the quarter improved 230 basis points from 40% last year, primarily due to $4.3 million of lower restructuring cost, benefits from favorable foreign currency effects and continued savings from RCI initiatives. Last year, the Snap-on Tools Group incurred $4.6 million of initial restructuring cost in the fourth quarter for the 2011 closure of the Newmarket, Canada tool storage manufacturing facility. Operating expenses of $84.3 million in the quarter increased $2.9 million from 2010 levels. As a percentage of sales, operating expenses of 28.8% in the quarter improved 160 basis points from 30.4% last year, primarily due to benefits from sales volume leverage. Fourth quarter operating earnings of $39.6 for the Snap-on Tools Group increased $13.8 million or 53.5% year-over-year. As a percentage of sales, operating earnings of 13.5% increased 390 basis points from 9.6% a year ago. Excluding the effect of restructuring expense, operating income margin improved 230 basis points year-over-year. Turning to the Repair Systems and Information or RS&I group shown on Slide 9. Fourth quarter sales of $236.5 million increased $4.7 million or 2% from last year's levels. Excluding currency translation, organic sales increased 2.4%, mainly due to higher sales in our Equipment Solutions business, which facilitates essential tool programs for OEMs, along with higher sales of diagnostics and Mitchell 1 software products to repair shop owners and managers. These increases more than offset the weaker sales to European equipment distributors that Nick already mentioned. Gross profit of $105.5 million in the quarter increased $2.2 million from prior year levels. As a percentage of sales, gross margin was 44.6% in both the fourth quarters of 2011 and 2010. Gross margin improvements in 2011 from ongoing RCI initiatives were primarily offset by higher restructuring costs. Operating expenses of $56.3 million in the quarter decreased $1.3 million from 2010 levels. As a percentage of sales, operating expenses of 23.8% in 2011 improved 110 basis points from 24.9% last year, principally due to the benefits from sales volume leverage, savings from RCI initiatives and lower restructuring costs. Operating earnings of $49.2 million for the RS&I group increased $3.5 million or 7.7% from 2010. As a percentage of sales, operating margin of 20.8% in the quarter increased 110 basis points from 19.7% last year. Now turning to Slide 10. Fourth quarter operating earnings from Financial Services was $22.1 million on revenue of $35.5 million. This compares with operating earnings of $9.4 million on $21.5 million of revenue last year. The $12.7 million year-over-year increase in operating earnings primarily reflects the growth of our on-book finance portfolio. Originations of $155 million in the quarter rose 9.1% compared to last year's levels, reflecting both higher sales in our Snap-on Tools segment and increased participation in our credit programs. Moving to Slide 11. As of the fourth quarter end, our balance sheet includes $935 million of gross financing receivables, including $786 million from our U.S. Snap-on credit operation and $149 million from our international finance subsidiaries. In the U.S., $636 million or 81% of the financing portfolio relates to extended credit loans to technicians. During 2011, our on-book financing portfolio has grown just over $200 million. The pace of the portfolio's on balance sheet development has continued as expected and will naturally decelerate as the transition of the CIT owned portfolio to Snap-on Credit nears completion. As such, for the full year 2012, we anticipate that the gross on-book portfolio will increase by approximately $125 million over 2011 year-end levels, which is slightly ahead of our previously communicated future state level for the portfolio of approximately $1 billion. As our transition moves towards completion, we expect further expansion of the Snap-on Credit portfolio to largely reflect activity in the Snap-on Tools Group. Regarding finance portfolio losses and delinquency trends, these continue to be in line with our expectations. Now turning to Slide 12. Consolidated operating cash flow of $72.3 million for the quarter and $128.5 million for the year includes the effect of a $48 million discretionary cash contribution to our U.S. pension plans. For the full year 2011, we contributed in total approximately $61 million to our various global pension plans. As expected, free cash flow from Financial Services in the quarter was a negative $36 million, reflecting the continued funding of new loan originations at Snap-on Credit. The operating company generated positive free cash flow of $58.3 million in the quarter, representing a $33 million increase over the prior year. Capital expenditures of $14.6 million in the quarter and $61 million for the full year, included continued spending to support our strategic growth initiatives, including the expansion and enhancement of manufacturing capabilities in both the U.S. and abroad. As seen on Slide 13, day sales outstanding for trade receivables of 58 days at 2011 year end, improved from 61 days at 2010 year end. Inventories increased approximately $60 million from 2010 year-end levels, largely to support higher demand, mitigate potential supply chain disruption and improve customer service levels. On a trailing 12-month basis, inventory turns of 4.2x compared to 4.7x at 2010 year end, reflective of the higher inventory. Sequentially, inventory [indiscernible] 4.1x in Q3. Our year-end cash position of $186 million decreased $387 million from 2010 year-end levels, principally due to the $200 million August debt repayment. Funding for new loans originated by Snap-on Credit. The previously disclosed $89.8 million second quarter repayment of amounts withheld from CIT and a $48 million discretionary pension contribution. Our net debt to capital ratio of 34.3% compares to 30.1% at 2010 year end, reflecting the uses of cash in 2011 that I just reviewed. In addition to our $186 million of cash and expected cash flow from operations, we have more than $700 million in available credit facilities, including our $500 million revolving credit facility and $200 million loan and servicing agreement. In addition, our current short-term credit ratings allow us to access the commercial paper market should we choose to do so. As of 2011 year end, no amounts were outstanding under any of these facilities. This concludes my remarks on the fourth quarter performance. I'll now briefly review a few [Audio Gap] 2012 as outlined in this morning's release. We anticipate that capital expenditures in 2012 will be in a range of $60 million to $70 million. Our restructuring expenses for the year are expected to include an estimated $6 million to $8 million charge in the second quarter associated with the settlement of a pension plan related to the 2011 closure of the Newmarket, Canada facility. Exclusive of this charge, pension expense in 2012 is expected to be comparable with 2011 levels. During 2012, we intend to make required contributions of $12.6 million to our foreign pension plans and $18.3 million to our domestic pension plans. Depending on market and other conditions, we may elect to make discretionary contributions to our domestic plans. Finally, we anticipate a full year effective income tax rate of approximately 33.5%. With that, I'll now turn the call back over to Nick for his closing thoughts. Nicholas T. Pinchuk: Thanks, Aldo. Well, to wrap up, we're quite encouraged by our results for the full year in general and for the fourth quarter in particular. Our attention to the Snap-on Value Creation Processes are driving real improvement. OpCo operating margins for the year and the quarter were up from last year, 140 basis points and 150 basis points, respectively, both significant increases. And we continue to bring the credit company on-book with reliability, without disruption and with profitability, just as we said we would. We believe we're making clear advancements on our strategic runways for coherent growth, the van network is more robust, profits are up, turnover is down. RS&I is expanding our offering to shop owners and managers in new places. Our growth in critical industries within double digits, and we've built more physical capability in emerging markets with the opening of our new engineering center in Kunshan. As usual, we do have continuing challenges in Europe and other places, but the strength of our strategic initiatives brought us to an almost 6% organic sales gain in this quarter, well into our target post-recovery range, despite the headwinds. And our operating company in common, OI margin for both the quarter and the year, represent record levels for our company despite the headwinds. Summing it all up, we're encouraged by the results, by the progress they evidence, by the strength they confirm and most of all, by the prospects they imply. I'll end, as we always do, by recognizing that the performance over the quarter and the year reflects the special dedication of our Snap-on associates and franchisees around the world. I know that many of you are listening. You are the ones who have created this performance and have made this trend possible. For your extraordinary contribution to Snap-on and for your unwavering commitment to our team, you have my congratulations and you have my thanks. Now I'll turn the call over to the operator for questions. Operator?

[Operator Instructions] We'll go first to David Leiker with Robert W. Baird. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: This is Joe on the line for David. I'm sorry I hopped on the call a little late, so I apologize if you gave this number. But the past few quarters, you've given us C&I organic growth number x Europe, would you happen to know them? Aldo J. Pagliari: C&I number x Europe, I don't know if we've given that in the past. I think we gave it Southern Europe in the past, I'm not sure we have that or interested in giving that or will give that at this time. If you want to call back later maybe we... Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Yes, I was just -- rather to have, I guess, excluding the headwinds, so Southern Europe but I... Nicholas T. Pinchuk: The thing to do, if you -- what I will tell you is this, Europe breaks down pretty much like this. If you look at our businesses in Europe, we have Southern Europe and Southern Europe is down further than it has been in the past, 15% to 20% now. And so that is particularly right down the center of C&I. This time, we have an impact on the Equipment -- we have the Equipment business, which is down in Europe Now I'm not sure if that's economy related or just 1/4 motion, because the Equipment business can be a little lumpy. And last year, there was a couple of shows in Europe that made it difficult, and that made the comparisons difficult. But the rest of Europe for us is up 2% to 3%. Now that's softened from where we were. If you pull out -- I suspect if you pull out everything out of all the European businesses out of C&I, you're talking about a 5% to 6% to 7% growth in C&I, so you're still seeing a pretty robust business if you take Europe out of it. Now I will call your attention to, if you weren't on the call, the big pieces that's very strong in C&I is the Industrial business, and we've been mentioning that our runway for growth and in critical industries has been open for us. And in the past quarters, it's been masked by the military activity going down. But this quarter, with the military activity comparisons being a little softer on a year-over-year basis, that business grew by double digits. So in balance, you have C&I down, you have C&I impacted by Europe but still growing in our 4% to 6% range, so let's say at around this 5% to 6% range without Europe. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: All right, great. And I actually wanted to touch on the other growth aspect of C&I, the emerging market piece. Do you happen to know what Thailand as a percent of that segment represents, because I'd imagine with all the flooding, they're going to need a lot of car repair in the near term? Nicholas T. Pinchuk: Would you think less of me if I admitted to not knowing the Thailand number at this time. But if you want to call in, we may have it. I think our business is reasonable in Thailand but a kind of secondary market. The big markets in Asia are India, China, Japan, Indonesia, Philippines. Thailand would be in the second level around Malaysia, Singapore and Thailand. I think you're right. I think there is opportunity for it to grow there. We have a good share. We have a reasonable position, at least in the, I guess, top end of the market. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: All right. And then one last one for me, the Tools business obviously had a great quarter and organic growth accelerated sequentially, growing 9% wherein Q3 it looks like it was up 6% organic. You've always talked about that business being maybe at the lower end of the 4% to 6% sustainable range. I'm just wondering, going from 9%, what's going on in that business that's enabling such strong growth and where do you see it going forward to the next... Nicholas T. Pinchuk: Well, I think one quarter does not a whole trend make. So I wouldn't get -- I don't think we get excited about any of our businesses, particularly about one quarter or another. I think you can't draw any conclusions, big conclusions from one quarter. But I'll say this, the Tools Group, we have said for a long time that they have to deal with a certain fixed space, the technicians in the United States. But then we have also said very quickly that our vans call on only a subset -- fully enabled, our vans only call on a subset of that space because they've just -- it's a productivity issue. They only have so many hours in the week, because they have to call on these people every week. And if we can enable them with RCI, then volume will accrue. And that's what's been happening. You're seeing RCI flow through the vans. Now is it going to happen at 9% every quarter? I don't know. I can't comment on that. But I think what you're seeing in the robust quarter is a combination of things, but one of the major factors is the effect of that van network being more robust, being more productive and therefore, capturing more sales of those technicians and calling on more of them. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: If you had to give a baseball analogy, how much more room you have to go in the productivity initiatives with the van network, where would you think you're at? Nicholas T. Pinchuk: I don't have to give a small analogy though, but I don't know. I think there's quite a bit of runway there, but we have said, I think, our targets, our range is 4% to 6%. We've said that the Tools Group, because of the fixed nature of its business, will be at the lower end of that with RS&I in the middle and C&I at the top end. And we don't -- nothing in this quarter tells us that, that's wrong. Okay?

We'll take our next question from Jim Lucas with Janney Capital Market. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: This is Mike Wherley standing in. You guys mentioned restructuring in Europe in the C&I business and I was just wondering, have you resized the SNA Europe to reset up a lower demand level or do you still have belief that those markets are coming back? Nicholas T. Pinchuk: We believe the markets are coming back. What you see in the restructuring is simply the effect of RCI rolling through that business so we can do our target with less. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: Okay. So no change to sort of the size of... Nicholas T. Pinchuk: No, we might. Jim, we might have closed -- we didn't close any big operations or anything like that or rationalize the distribution. We're just -- I think this is what I would call aggressively RCI-ing the business. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: Okay. And then when we look at RS&I, the revenue growth, it's still there but it decelerated from like 5% and 10% the last 2 quarters. And I'm just wondering, relative to like that 10% 2 quarters ago, how much of that is due to Europe versus just some tougher comps as you came out in the downturn. Nicholas T. Pinchuk: Both, Jim. I think that if you're looking at the 10%, that's the easier comps. When you go back and you look at the trend of RS&I, I mean the growths were 11%, 7%, 9%, 6%, 4%, 8%. so you saw it coming off the easier comps. And in fact, some of those businesses were slower to come back than others. So you saw that rolling through the business. Rolling through that sector. What you saw in the fourth quarter was fundamentally the equipment business being a little bit off the boil. And I don't -- and a lot of it's in Europe and we're not sure how to interpret that. I'm not willing to say it's economic-related, I just think we do see from time to time lumpiness in the Equipment business. So the 2.4% in organic and RS&I in the quarter, yes, it's below what we would normally expect, but not I would call what I'd say concerning to us or alarming. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: But would you say it's more from the weakness in Europe than tougher comps? Nicholas T. Pinchuk: Yes, I'd say so. I'd say so. Yes, I'd say that. I'd say that. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: And then just the last question I had on the Financial Services portfolio... Nicholas T. Pinchuk: So let me clarify that for a minute, if I could. The one thing, the one clarification that as I said, I think, in the last point is that Europe Equipment business had in itself a noneconomic tougher comp because it has every other year's show cycles and so therefore, there's some of that flowing through this business. So all things being equal, we would have not expected as robust the fourth quarter out of RS&I because of this. Now I'm not saying that accounts for all of this, but that's a factor. Michael J. Wherley - Janney Montgomery Scott LLC, Research Division: Okay. The last question I had was on Financial Services and you talk about that portfolio being over $1 billion, a little bigger than you had thought before -- by the end of next year or -- and I'm just wondering is that more because the Tools Group is doing well or is it because of other credit offerings outside the Tools Group? Aldo J. Pagliari: Mike, this is Aldo. It really reflects a higher pace of growth in the Snap-on Tools Group. We do like to work closely with the Tools Group, it's one of the advantages of having a captive finance company. So the Snap-on Credit Corporation works intimately with them to design programs that encourage greater levels of participation. So what I think you see is that we've had a more rapid of ramp-up of originations in the Snap-on Credit Company, reflecting really increased financial health and commercial health of the franchisee network, and that spills over into their customer base. And I think that's why you see some increased performance in the Tools Group itself, and Snap-on Credit also participates in like fashion.

[Operator Instructions] We'll go next to Richard Hilgert with MorningStar. Richard J. Hilgert - Morningstar Inc., Research Division: On the RCI Slide -- I'm sorry the C&I Slide... Nicholas T. Pinchuk: Do you mean RS&I? Richard J. Hilgert - Morningstar Inc., Research Division: No, C&I. Nicholas T. Pinchuk: C&I, okay. Richard J. Hilgert - Morningstar Inc., Research Division: The gross profit line, if I add back the $2.9 million in restructuring costs, I'm still coming up with a 37% of sales gross profit margin. So that leaves us with 140 basis points decline in margin from year-over-year. So I'm wondering, you had mentioned the RCI going through Europe and you've got some restructuring that you're going to do because of it, and you're going to be able to do more with less over there. Does that get us the 140 basis points of margin that we used to have? Or is there pricing pressure over there too? Nicholas T. Pinchuk: Well, let me just speak to that a moment. First, I think it's just -- I think the most -- I guess, the most informative way to look at C&I is not necessarily gross margin, because what you have flowing through that is you have business mix, for example, as some of that. I'm not saying it's the whole effect but I'm saying some of it, it gets distorted by the fact that when Asia-Pacific grows, Asia-Pacific is, by definition, a low gross margin business and a low OE business, still as profitable from an OI business. So that tends to reek a little bit of distortion, Richard, on that gross margin line. So if you roll over to OI which is still down, 140 basis points or something and you say, "Okay, 90 basis points of that is restructuring," you're still down 50 basis points -- what's wrong, what's the problem. And the problem is Europe, you put your finger on it. And in Europe, there are 3 things going on. One is Southern Europe is down again and you may not have heard this, but I've said this on the calls before, for us, Southern Europe was our highest profitability and margin business. So there is a mix question as Southern Europe shrinks further for us on a year-over-year comparison basis. That creates some impact. Then there is the question of -- they have a cocktail of currencies, they source from a number different places on renminbi and the Argentine peso and a number of different places. And those things turn somewhat favorably, so that's some impact. And then, which I think is the more interesting view is, we have in Europe what we're calling a stimulus program where we focus on places where we think we could gain with customers by having programs that attached a little bit more effort, a little bit more support, a little bit more price support. And those kinds of things impact as well. It worked for us in the recession in the United States. We had a stimulus program that targeted places where we thought we could advance our position, and that's what we're playing out in Europe. So those are the 3 factors that have tended to pretty much move that OI margin down. Now are we going to get back? I think that's the intent over time, but I'm not saying that -- I don't think you can say, "Look, we made these restructuring actions in Europe, and that's going to fix the problem," because the problem in Southern Europe is frankly too deep to be fixed by RCI actions. Our whole structure in Europe is -- our whole view, approach to Europe is saying, "Look, we're watching our customers, we're watching our distribution, we're seeing our share and we believe this market's coming back. We think we'll be stronger than before and therefore, we're just preparing for that day because we think we can capitalize on that." Richard J. Hilgert - Morningstar Inc., Research Division: The car market over in Europe is quite a bit different. The repair business, the artisan keeping his tools to do his trade is the same. But over in Europe, you've got about 1/2 of the cars that belong to fleets. How does that dynamic factor in when we've got a slowing economic environment? I would think that these corporations would be holding onto these vehicles longer and trying to get more use out of them, therefore, there might be more repair opportunities. Is that how to look at it? Nicholas T. Pinchuk: Yes, I think that might be true. I think you'll be entitled to that assumption. It certainly happened in the United States as people -- as new car volumes go down. People hold on their cars longer and that drives more repair, so that would be one tailwind we would see. Now remember when we're talking about Europe, we're less auto-centric than we are in the United States, but that's what still give us a boost, because we have our automotive business in Europe. And the way we structured that wouldn't all come out of C&I. We've seen some of it in Tools, we've seen some of -- that phenomena you're talking about, we've seen some of it in Tools, we've seen some of it in RS&I and so on, but it would be a clear tailwind for us. Richard J. Hilgert - Morningstar Inc., Research Division: Okay, good. Last area I wanted to touch on was again this objective of achieving $1 billion plus on the balance sheet for Financial Services. As time goes by and we see economic improvement over here in the U.S. and new car sales start to improve, on the one hand, we might have a decline in the aftermarket in the sense that people aren't keeping the used car as much. They're getting more new. But on the other hand, as that economic conditions improve, there might be more creation of additional repair shops, which would need tooling to get up and running. Is that part of where the increase in the funding or the receivables comes from is an assumption that we'll see an increase in franchisees, and because there's an increase in the number of shops coming as the economy improves? Aldo J. Pagliari: Again, Richard, Aldo. I'll answer that as best I can. I think the growth in the portfolio, as envisioned, is mostly on the extended credit portfolio side, which is the bread and butter of what we do. It makes up 81% of what we do today. And I think the lion share of the growth beyond where we're at right now, the additional $125 million, I think we see on the slide that $95 million or so come -- or 77% of those, still come from extended credit. So again, that's catering to the mechanic as an end customer via the franchise network. What you hinted at, there will be some of it that's called -- what we call the leasing, when shop owners -- it's a small piece of what we do, it makes them about 4% to 5% of the Snap-on Credit portfolio today as leasing activity. When the shop owners sometimes needs financing, they will sometimes consider Snap-on credit as a source. But that's a little bit of a different credit profile, different bit of a mix and therefore, they have other alternatives available for them, they have -- can have local banks that might be available for them as a source of funds, as well as Snap-on Credit as well as other leasing companies. So to answer your question if shops expand, that does create an opportunity for Snap-on credit to grow, but the lion share of the growth that we're talking about is just the increased participation of our activity with mechanics as end customers. Nicholas T. Pinchuk: But I think you're -- I just want to add to that. I think you're right about an underlying sort of macro in there. And that generally, in markets we have seen, one of the great things about being in critical industries in automotive repair is critical tasks. And automotive repair is one of those, is they tend to move upwards as the world facilitized. For example, you mentioned new cars and so on, but new cars, the new car market in the United States, has been up or down. It's $9 million, $10 million, I think $17 million. And despite that, cars have gotten older every year since 1980. So the idea of the repair and demand keeps going upward, and I think that is just an underlying trend that says, "Okay, there are going to be more shops." There's going to be more demand for repair, and in fact, when you look at the statistics about the average household spend on automotive repair, it's going up. It went up again last quarter and it's been going up pretty much regularly every quarter for a long time. So you're correct at putting your finger on one of the great driving points behind these macro driving points behind this businesses. Richard J. Hilgert - Morningstar Inc., Research Division: Okay. Just as a follow-on to that, what's the anticipated growth rate in the number of franchisees for the coming couple of years? Nicholas T. Pinchuk: I think -- I don't think we're going to see it move up that much. We have 3,400 -- depends on the geography in the United States, we have 3,467 now that moved a couple in the past few years. You might see some increase, but our play -- I think the play about numbers of franchisees is not there. What will happen, we believe, is efficiency. One, franchisees, the individuals will reach more customers, they call on 800,000 now, there are 1.3 million in the United States. They can call on more. It's a productivity issue. It's what I said before. Two, we have turnover, and it's an all-time low, but it's still about 8% a year. So you do the math and you figure out how many turnover, a couple -- 300 a year. And our ability to fill them quickly has to do with our ability to serve the market. So we get better every quarter at filling those things, and that adds capacity, even within the same number of shares. So the effect for the Tools Group is more around productivity for the vans themselves, that's the growth place. And our productivity internally, where we could be more efficient and popping somebody in when they're ready to retire.

[Operator Instructions] We'll take our next question from Gary Prestopino with Barrington Research. Gary F. Prestopino - Barrington Research Associates, Inc., Research Division: A couple of questions here. Hey Aldo, in terms of the overhead expenses related to Snap-on Credit, is that still running at about $25 million to $30 million? Aldo J. Pagliari: I think as a ratio, Gary, the best I can determine, let's say you're in the 6% range, if you look at what percent of revenues that they tend to generate, you'll see good drop through. The biggest expense that flexes as you grow the portfolio is really the provision for bad debt. As you grow the portfolio, you have to have -- anticipate bad debt expense that goes along with that. To me that's the biggest variable expense. Of course, there's underlying structural additions you look at. And we always look ahead to will it be increased costs of compliance. So there's some variables out there on the horizon, and we don't really give guidance around it. But it's a pretty scalable organization, but you don't have to have lots of incremental [ph] costs to grow. Gary F. Prestopino - Barrington Research Associates, Inc., Research Division: Is that 6% of Financial Services revenue, 6% of the total loans out there? Aldo J. Pagliari: I'm looking at 6%, if you look at the top line more or less, if you look at where you're at. The financial expenses run in the order of about $50 million, $51 million, I believe, they were on a full year basis this year. So that's about -- that'll grow a little bit going forward. The biggest variable expense is really a provision for bad debt expense. Gary F. Prestopino - Barrington Research Associates, Inc., Research Division: Okay, that's fine. And then, Nick, you kind of mentioned in your talk that throughout the quarter you started Q4, obviously, Europe continues to weaken and we know the problems in the South and -- but can you maybe comment on what you're seeing so far in the quarter? Is there any changes there? I mean has it gotten worse in terms of both the North and South? Nicholas T. Pinchuk: I hate to comment on the South of Europe because I seem to be -- I remember I was on one of these calls one time and I think I said I thought it bottomed out, and that turned out to be misinformed. So that was a long time ago. But we're not -- we don't give guidance, but I can say I don't think we're seeing any sea change, what -- we're seeing kind of the same stuff that we saw. And the interesting thing about Europe is if you look at it, it's kind of the same characteristics that we saw before, it's just that it generally weakened. The South is worse and then for us, the North was better and the Middle was kind of middling and that kind of thing, but we're not seeing any, I would say, any implosion or something like that. Gary F. Prestopino - Barrington Research Associates, Inc., Research Division: Okay. It's just I asked those questions because it's in the headlines constantly, and you'd think it's falling off a cliff. Okay. And then one thing you did mention in terms of especially in the RS&I, or Repair and Infosystems, you talked about the products you sell generally offer productivity improvements. Have you ever mentioned like what kind of return, what productivity return a shop gets from some of these products that you're putting through there? Nicholas T. Pinchuk: We haven't mentioned it. We haven't mentioned it. It becomes so specific as, I think, being difficult. You kind of have to look at a particular shop and a particular product. I mean, some of them are things like let's take in an aligner, for example. It's hard to measure the idea that -- what the productivity return will be if I can have the aligner run by anybody in the shop as opposed to a specific aligner tech. And that's the kind of thing that happens. And also though, it happens faster and so on. So we have a number of those things, but they're very specific to the shop condition because as an example I just pointed out, if you have an aligner tech, a specific aligner tech and some shop have had them and you bring in the aligner, was one of our new aligners and anybody can do it while you can in fact, redeploy that aligner tech and you get great productivity. But if you're a shop that didn't use aligner techs and kind of muddle along without them, then it isn't quite as much a productivity improvement or as dramatic a productivity improvement. So it really depends on the particular situation. Now if you wanted to go to a garage and look at them, we could probably take you through the elements of that in the specific situation. I think that would be more effective.

We'll take a follow-up question from David Leiker's line. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: All my questions have been answered.

And seeing no further question in our queue at this time, I'll turn the conference back over to Leslie Kratcoski for any additional or closing remarks. Leslie H. Kratcoski: Great. Thanks, Yolanda, and thanks, everyone, for joining us today. As always, a replay of the call will be available on snapon.com later today. We appreciate your participation this morning, and your interest in Snap-on. Good day.

That does conclude today's conference. Thank you, all, once again, for your participation.