Emanuel Chirico - Chairman and Chief Executive Officer Michael A. Shaffer - Chief Operating & Financial Officer and Executive Vice President

Robert S. Drbul - Barclays Capital, Research Division David J. Glick - The Buckingham Research Group Incorporated Bilun Boyner Kate McShane - Citigroup Inc, Research Division Omar Saad - ISI Group Inc., Research Division Eric M. Beder - Brean Capital LLC, Research Division Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division John D. Kernan - Cowen and Company, LLC, Research Division Erinn E. Murphy - Piper Jaffray Companies, Research Division Howard Tubin - RBC Capital Markets, LLC, Research Division Steven Louis Marotta - CL King & Associates, Inc., Research Division Dana Lauren Telsey - Telsey Advisory Group LLC

Good morning, everyone, and welcome to the PVH Corp.'s Full Year and Fourth Quarter 2012 Earnings Conference Call. This webcast and conference call is being recorded on behalf of PVH Corp. and consists of copyrighted materials. It may not be recorded, rebroadcast or otherwise used with PVH's expressed written permission. Your participation in the question-and-answer session constitutes your consent to having any comments or statements you make appear on any transcript or broadcast of this call. The information made available on this webcast and conference call contains forward-looking statements that reflect PVH's view as of March 27, 2013, of future events and financial performance. These statements are subject to risks and uncertainties indicated in the company's SEC filings and the Safe Harbor statement included in the press release that is the subject of this webcast and call. These risks and uncertainties include the company's right to change its strategies, objectives, expectations and intentions and its need to use significant cash flow to service its debt obligations. Therefore, the company's future results of operations could differ materially from historical results or current expectations. The company does not undertake any obligation to update publicly any forward-looking statement, including, without limitation, any estimate regarding revenue or earnings. The information made available also includes certain non-GAAP financial measures as defined under SEC rules. Reconciliations of these measures are included in the full year and fourth quarter earnings release, which can be found on www.pvh.com and the company's current report on Form 8-K furnished to the SEC in connection with that release. At this time, I'm pleased to turn the conference over to Mr. Manny Chirico, Chairman and CEO. Please go ahead, sir.

Thank you, Kayla. Good morning, everyone. Joining me on the call is Mike Shaffer, our Chief Financial Officer; and Dana Perlman, our Treasurer and Head of Investor Relations. We're going to break the call down into 2 parts. Mike and I will take you through 2012 first. Then we'll do an overview of the business, and Mike will take you through the financial results. And then we'll go through a discussion of 2013, some of the early trends that we see in the PVH business, as well as talking about some of the trends that we see in the Warnaco businesses and our perspective on how the integration and acquisition will be moving forward throughout the year. And then we'll open up the call for questions. Let me start by saying, given our fourth quarter results, we're very pleased. We beat the top end of our fourth quarter earnings guidance by $0.05 a share and came out of the year very clean from an inventory and receivable point of view, which we think positions us very well for the first half of the year. Let me start by talking about the Tommy Hilfiger business, which has been our stellar performer for 2012. In the fourth quarter, the Tommy business continued its strong performance, posting a 9% revenue increase. Excluding the extra 53rd week, revenues increased 6%. In the fourth quarter, operating income increased 45% over the prior year. Focusing on the international business. Internationally, revenues, excluding the 53rd week's revenue, increased 5%. Our retail comps in Europe posted a 9% increase, while European wholesale sales were up 3% for the quarter. Geographically, we continued to see strong growth in Central and Northern Europe, with particular strength in France, Germany and Turkey, partially offset by the continued weakness in Southern Europe, particularly Spain and Italy. Moving to North America, excluding sales for the 53rd week, revenues were up 7% in North America, driven by a 5% comp store sales increase in our retail business, square footage growth at both wholesale and retail and mid-single-digit growth in our wholesale business for the quarter. We continue to see momentum in the North American business and strongly believe that the significant investments we are making in product, in our stores, in the shop presentation and our marketing programs are paying dividends for us. Just to give the full-year perspective on Tommy, our Tommy Hilfiger segment consolidated posted a 5% revenue increase, with operating income growing 24%, to $437 million. Operating margins in the Tommy business consolidated increased 200 basis points, to 13.6%. Moving to our Calvin Klein business. Our Calvin business continued to exceed our financial guidance and post strong results. Total revenues in the fourth quarter for our combined Calvin Klein businesses were up 14% despite overall softness in the global jeans and women's underwear businesses. These increases were driven by our Calvin Klein North American Retail and Wholesale businesses, which posted revenue increases of over 20%, driven by square footage growth at both wholesale and retail. Operating income increased 5% in the fourth quarter despite a $6.5 million advertising expense increase relating to our Calvin Klein underwear campaign, which centered around our Super Bowl commercial. Absent this brand marketing investment, operating income would have been up 15% for the quarter. The Calvin Klein brand posted revenue increases across all geographic regions, with the exception of Europe. Specifically by region, North America sales were up 4%, with all product categories posting strong results, with the exception of jeans and women's underwear, which were down double digits. In Asia, sales were up 3%, driven by mid-single-digit growth in China, Hong Kong and Southeast Asia, partially offset by continued weak sales in Korea, where business was down double digits. Latin America and South America continued their strong performance, posting a 12% sales increase, driven by Brazil and Mexico. In Europe, sales were down about 13%, principally related to the poor performance in the Warnaco apparel and underwear businesses. In our Licensing segment, overall royalty revenues were up 4% on a constant-currency basis. The increase was driven by strong performance globally in women's sportswear, dresses, footwear and handbags, all of which posted double-digit increases. This positive performance was negatively impacted by a 9% decline in Warnaco's global sales of jeans and underwear. Moving to our Heritage businesses. Excluding the impact of the exited business, ongoing revenues excluding the 53rd week for the Heritage business increased 3%. Comp sales in the Heritage retail businesses were relatively flat, while our ongoing wholesale businesses posted a 4% sales increase, due principally to strong growth at Izod and Van Heusen sportswear businesses. Operating earnings in the quarter more than doubled to approximately $27 million, driven by the strong performance in our wholesale dress and sportswear businesses. Partially offsetting this strong performance was a continued weakness in our retail business, particularly Bass. With that, I'd like to turn the business -- the comments over to Mike to quantify some of the fourth quarter results. Michael A. Shaffer: Thanks, Manny. The comments I'll make are based on non-GAAP results and they're reconciled on our press release. Our earnings per share for the quarter was $1.60. Included in our fourth quarter earnings is a $0.06 benefit for change in accounting for our pension expense, which I'll talk about in a moment. The fourth quarter EPS of $1.60 represents a 34% increase over the prior year amount, which is also adjusted for pension expense. Excluding the change in pension accounting, our earnings per share were $1.54, a $0.05 beat to the top end of our guidance. Driving the earnings improvement over last year was revenue growth of approximately 7% and a significant increase in operating margin. Revenue growth was driven by strong performance in Tommy Hilfiger and Calvin Klein. Operating margins increased 250 basis points over the prior year due to a 320 basis point gross margin increase. The gross margin increase was due to decreased product costs coupled with higher average-unit selling prices, as well as faster growth in the higher-margin Calvin Klein and Tommy Hilfiger businesses. In the fourth quarter, we made a change to the accounting for our pension and postretirement benefit plans. Our new accounting method aligns with fair value concepts and is the preferred method of accounting. In addition, this change aligns our accounting method with the method utilized by Warnaco. The new method recognizes actuarial gains and losses in operating results in the fourth quarter of each year in which they occur versus our old method, which smooths such gains and losses out over many years. The change in accounting method created a $0.15 benefit for the full year 2012 and a $0.06 benefit in 2011. Additional details on the change, including the impact on our quarters and segments, are presented in our press release. I'll now turn it back to Manny, and we'll talk about 2013.

Okay, thanks, Mike. I'm going to focus on some of the 2013 trends that we see in the business today and also on our guidance. I'll also talk about the PVH standalone business, as well as the Warnaco acquisition and those businesses as well. Let me start with Tommy Hilfiger internationally. In Europe, our retail comps continued to run ahead of plan, with comp sales up about 5% to 6% on a shifted calendar basis against the low-single-digit comp store plan. From a wholesale perspective, we're running right on plan. Our spring and summer sales are planned up about 4% to 5%, and we continue to see good sell-throughs with our key customer accounts. As we look to the fall holiday season, we have seen an acceleration in our European business, with our fall and holiday order book up over 10%. Again, against the 5-year plan, sales increased for the back half of the year. We are seeing double-digit growth in fall sales in Germany, France, Scandinavia, Russia and Turkey, offset by softness in Italy and Spain. Moving to North America. In North America, our retail business is being impacted by this unseasonably colder spring weather, particularly in the Northeast and Midwest, where 65% of our stores are located. For our North America retail businesses, I'm going to talk about our comps on a calendar shifted basis to make it sure it's apples to apples. Calvin Klein is running on plan at about 1% to 2% positive comps, with very strong margins. The Tommy Hilfiger business is running ahead of sales plan, posting a 4% comp store increase, along with also very strong margins. Our Heritage retail business is the one that we're seeing considerable pressure in. Comps in our Heritage retail business are down 9%. We're fortunate that we've come out of the year so clean on inventories, though we haven't seen significant margin pressure to date. We believe this is a weather-related issue and that this business will start to show positive signs as we move into more seasonable weather in the coming months. Our Heritage wholesale business, which represents over 60% of the Heritage segment, has seen a major turnaround in financial results and continues to perform. We feel we are very well positioned in the Heritage wholesale business. Our spring orders are on plan; inventories are in line with retail sales plan; and our in-store presentations are significantly enhanced and we've expanded our in-store shops with key customers. The Izod JCPenney shops are performing at plan levels and are one of the best-performing brands on their selling floor. All of this gives us a high degree of confidence that we'll continue to see a wholesale business improvement in 2013. In North America, our wholesale businesses at Tommy and Calvin continued to perform and to record strong sales gains, particularly with Macy's, where both brands are performing very well in the spring season. Moving to the Calvin Klein Licensing business. In 2013, we continue to see strong growth in all license categories now that Warnaco jeans and underwear businesses have been taken in-house. However, we are contending with a $20 million reduction in revenues in 2013, which is a direct result of the expiration of some long-term contractual agreements that guaranteed minimum revenues related to the European bridge business, the North American women's wholesale business and the Calvin Klein collection business. Let me move to Warnaco. We've owned the business about 45 days, and we continue to be excited about the long-term opportunities that the acquisition presents. We continue to see significant growth for the Calvin Klein brand, both through geographic growth and product category expansion. However, in order to capture these significant global growth opportunities, we need to invest in Warnaco's infrastructure, logistics, supply-chain, product design team and systems in order to create a stable global growth business. Let me give you an overview of how we are viewing each of Warnaco's business units. I'm going to start with Calvin Klein Asia. This is about a $530 million business that has grown at a double-digit rate over the last 5 years. This business has aggressively grown by significant square footage growth through a combination of new store openings and franchise distributor acquisitions. Over the last 3 years, there's been a lack of investment in the infrastructure of this business. We will need to invest in the operating infrastructure and fully integrate this business into our systems and supply chain over the next 24 months so that we can efficiently capture the growth in the market. The Calvin Klein brand is very strong throughout Asia, and we are planning the business to grow about 5% in 2013. We are currently seeing comp store sales growth in China and all of Southeast Asia of about 5%. The only difficult Asian market for Calvin Klein is Korea, where comp sales are down double digits in the context of a difficult consumer environment and a difficult denim landscape. Moving to Europe. Europe is about a $500 million jeans and underwear business. For the period 2007 to 2010, this business operated at a 10% to 12% operating margin. However, business has been quite difficult over the last 2 years, and operating margins in 2012 were below 4%. Our plan is to fully integrate this business onto our Tommy Hilfiger European operating platform over the next 12 months. We will also move the European headquarters of Calvin Klein from London to Amsterdam, where it will be under the direct management of our PVH European senior management team led by Fred Gehring and Daniel Grieder. The Calvin Klein European business in 2013 is planned to be down low to mid-single digits as we are planning to shut down about 15 to 20 unprofitable stores, as well as reduce our sales to the off-price channel and unproductive small specialty accounts. We believe that by initially shrinking the business in Europe that we will improve the overall profitability of the business and better position the business for sustainable long-term growth. Moving to North America. The Calvin Klein North American business for jeans and underwear is about a little bit over $500 million, with 10% operating margin. The business is comprised of a very profitable underwear business and an underperforming jeans business. The jeans business has been overly dependent upon the off-price and club channel, and as such, Calvin Klein has lost its leadership position in jeans with all of its major department store customers. We are highly confident that over the next 2 years, we can turn the Calvin Klein Jeans department store business around. What makes us confident is, first and foremost, the strength of the Calvin Klein brand; second, as a management team, we have significant credibility with our retail partners and they have significant confidence in us that we will deliver for them. We can leverage off of the tremendous success that we've experienced in our Calvin Klein men's and women's apparel business and accessory businesses across North America. We are committed to invest in shops and fixtures, as well as point-of-sale marketing and in-store merchandising coordinators to enhance the in-store presentation and experience for our customers. We are investing in product design talent and product quality to upgrade our jeans product presentations to our consumers. All of this gives us the confidence that we can turn this jeans business around, rebalance our distribution in North America to a more regular-price business and take the business forward in a positive growth mode into the future, 2014 and beyond. Moving to Latin America and Mexico, the Calvin Klein business in Mexico and Latin America is a little bit over $200 million. It's principally a wholesale business with strong double-digit operating margins. The brand is very strong throughout South America, and it enjoys a premium positioning throughout Latin America. We see this business continuing to grow at about 10% in 2013 and beyond. We have a very strong local management team based in Brazil and Mexico, and this business does not require significant additional investments in the future. Finally, the Warnaco Heritage business of Speedo and Core Intimates are very similar to PVH's wholesale Heritage businesses. They have strong management teams in place that deliver solid operating results. These businesses recorded sales of a little over $400 million in 2012, and we are planning these businesses to grow 2% to 4% in 2012. Finally, let me close my comments by saying having now owned the Warnaco business for 45 days, we are disappointed that we've had to come back to you with revised downward 2013 earnings guidance for the acquisition. However, the additional investments we are making today are necessary to build a sustainable growth business in Calvin Klein. We feel much more comfortable today that the long-term opportunities both for Calvin Klein and PVH are significant. We believe that the required near-term additional investments in infrastructure will accelerate the future growth of our business. We believe that will translate into earnings-per-share growth in excess of 15% in 2014 and beyond. With that, I'd like to open up the -- let me turn it back to Mike, I'm sorry, I almost forgot my main man. Let me turn it back to Mike to just quantify some additional items about 2013. Michael A. Shaffer: Thanks, Manny. I wanted to put some color to 2013 revenues and operating margins. Our revenues for 2013 are projected at $8.2 billion. The standalone PVH company revenues are slightly over $6 billion, with standalone Warnaco revenues comprising about $2.15 billion. Year-over-year comparisons on revenue are impacted by the elimination of about $200 million of intercompany sales in 2013. In addition, standalone PVH Corp. benefited by a 53rd week in 2012, which is worth about $40 million, and the impact of not owning Warnaco for the first 10 days of our fiscal year, which is worth about $60 million. Our plans reflect standalone PVH revenues growing about 3%, excluding intercompany elimination and Warnaco sales, are basically flat to the prior year. As a reminder, the Chaps business has been excluded from our go-forward guidance and the prior year comparison, as PVH has not kept the license. Sales for Chaps were approximately $230 million. Manny covered current trends and projections, so I thought I would cover the impact on operating margins. Our operating margins for 2013 are planned at about 12%. This reflects a 40 basis point reduction to 2012. The Warnaco businesses for 2013 are planned to operate at about 8.5% to 9% operating margins, which is bringing down the overall PVH operating margin to 12%. Lastly, I just wanted to spend a minute on the dilution associated with the transaction. Our original guidance was that this transaction would result in about $0.35 of accretion. Our new guidance is $0.25 of dilution, a $0.60 decrease. The cause of the decreases are a $45 million, or 20%, shortfall in earnings and $25 million of reduced synergies for year 1. The biggest change related to synergies is higher-than-estimated amortization of noncash intangible asset expense of about $10 million. In addition, we lost $5 million of earnings due to the closing of the transaction 10 days into the start of our fiscal year. We continue to think the transaction will generate $100 million in annual synergies. However, we now estimate that we will need 4 years to attain these savings rather than our initial 3-year timeframe. As a reminder, total debt is now approximately $4.5 billion, and we expect interest expense of about $200 million in 2013. And with that, operator, we'll open up for questions.

[Operator Instructions] And we'll take our first question from Bob Drbul with Barclays. Robert S. Drbul - Barclays Capital, Research Division: I guess, if we could just focus a little bit more on the Warnaco piece of it, Manny. When you guys look at the last 45 days, can you just talk a little bit more sort of about the biggest surprises that you have found and sort of -- on the $100 million, Mike, the trajectory of the accretion as we go forward from the dilution this year and as you look over the next several years, like, how should we think about it from like a ramping perspective?

Okay, Bobby, I guess, look, it's really -- the surprise has been in the lack of investments that were made in the basic operating platforms at Warnaco. Really some significant growth has gone on there with their business, a good portion of that growth driven by either new stores or acquisitions of franchisees and licensees. A lot of those acquisitions weren't fully integrated into the Warnaco business, so as we got visibility into their systems and a better understanding of how they were structured and maintained from an operating platform point of view, we really started to learn that there was multiple systems being run as opposed to regional systems being run. So the integration for us really is now required to be focused on a country-by-country basis as opposed to what we would have anticipated with more a regional integration, Europe, Asia, North America. We really have to now really focus, particularly in Asia, to go China, Korea, South -- the balance of Southeast Asia, then move to Europe. So it's really slowed down the pace of integration from what we would have thought would have been 15 to 18 months to more like -- today we're thinking that's more like 24 to 30 months as we go forward. So that has had a significant impact in that we haven't been really able to achieve the synergies and the cost savings, expense savings that we anticipated as quickly as we thought. So that has put pretty significant pressure on the accretion and dilution. In addition, the other challenge that we found, particularly in Asia but also in North America, is a level of inventory that really needs to be disposed of. And although some of that could be just naturally dealt with, with the acquisition accounting, it is going to put some pressure on normal operating margins as we're going to need to liquidate a higher level of inventory, particularly in the first 9 months of the year. And that's going to put pressure on the overall Calvin Klein margins. We think it's critical to move quickly on that, turn that inventory into cash and at the same time, clean the pipeline up as quickly as possible as we go forward. So those were the 2 biggest surprises we saw and really required us to get in and have hands on into the business as opposed to being able to view it public company to public company. Michael A. Shaffer: And, Bobby, in terms of the $100 million in modeling, we were thinking about the synergies right now as $25 million this year and then building $25 million per year to get to the $100 million. Robert S. Drbul - Barclays Capital, Research Division: Great. And, Manny, if I could just jump in with one more question is, can you elaborate a little bit more on the European business? The acceleration in the order book, what really is driving that in terms of the business, and what do you think about it from like the macro perspective as well?

Sure. I think there's 2 -- when you think about the business, if you look at the fall 2012 sales at wholesale level and our spring 2013 -- spring-summer 2013 sales, both were up about 4% overall when you look at those 2 seasons combined, that 12-month period. And if you think about that, those were the 2 seasons that needed to be rationalized by the retailers, where they started to see a softness in their business beginning in fall holiday 2011. So what tends to happen in a wholesale model is not -- you deal with the fact that open-to-buy dollars are being shrunk, but also, at the same time, the need to bring inventory levels down to the new reality of what was being faced in Europe. As we got to the second half of this year, we started to anniversary that phenomenon. So that part of the takedown is behind us, so I think that's healthy for the business, and the business is now growing with retail sales in our wholesale account. In addition, there's no getting around it, we are gaining market share significantly throughout Europe, just based on the strength of the brand there, the quality of the product and design that's gone into the product and the outstanding performance by our management team that continue to position us throughout Europe. So in a, what I think everyone is talking about, a very challenged market, we've been able over the last 2 years, '12 and really projecting into '13, being able to continue to grow that European business at a mid-single-digit rate when the consumer overall is being challenged. I think -- finally, I think we do benefit from the fact that 75% of our business is in Northern and Central Europe, where the consumer is stronger, where we do have a very strong base there. And we have a growing business -- we had a growing business in Southern Europe; that's clearly slowed. But being such a small portion of our business, it hasn't impacted us as much as some other brands.

And we'll take our next question from David Glick with Buckingham Research. David J. Glick - The Buckingham Research Group Incorporated: Manny, your senior management team has gained a lot of credibility and well earned over the last several years in terms of how you've executed, and I think that's why people are a bit surprised with the change in the Warnaco outlook. And how do you get us comfortable with your view that you think you've kind of reset the bar, that you factored in, I think hopefully conservatively, how the Warnaco business is going to unfold this year? And then within those additional investments, how do we think about what's onetime and what is ongoing?

Okay. Let me take it. I guess, I'll start by saying, look, there's no guarantees in life, so I can't give you guarantees. I think we clearly are disappointed about that we've had to move the numbers. We've tried to be as transparent as possible to really lay it out in excruciating detail so you can understand what we're doing. I have no doubt that what we're doing is right, is correct, appropriate, and it will pay dividends into the future as we set -- reset the bar and reset the growth target for Calvin as we look to 2014 and beyond. This is a major complicated acquisition. It's over $2 billion in sales in 4 geographic regions. It's more -- I'm not going to be Pollyanna about this. This is more complicated than other acquisitions we've done, and it's required us to really dig in. We believe we understand the expense structure now. And we believe we understand the investments we're making. Always have to be concerned about the macro environment, and if that were to change, what that might not only do to the Warnaco business but also our PVH business. Putting that aside, we think we've gotten all of the news out about our infrastructure, the investments that need to be made, the time frame that it's going to take to do this integration. And we think we have a very disciplined approach to the integration to take it forward. Not only it gets -- it moves the business forward, but also protects the base business as we go forward not to put things at risk. So with that framework, I feel that, that presents -- puts us in a positive position as we go forward and that we've tried to be as transparent to lay all of this out. Finally, I'll just say, it's repetitive, but some of these problems that we are facing in the short term create more long-term opportunity. We were surprised on the logistics side, on the infrastructure side, on the supply chain side. But by the same token, as we fixed those things, without a doubt, those weaknesses today create more long-term opportunity for us as we go forward, as we hopefully improve that infrastructure and supply chain as we go forward. So on that level, try and look at the glass half full, I think it gives us greater confidence that we really -- that our long-term strategic rationale for this transaction is even more solidified as we go forward. David J. Glick - The Buckingham Research Group Incorporated: All right. And just one quick follow-up. So basically you have a business, call it $2.2 billion at 8.5% operating margin. Your business, the core PVH business had a 13% operating margin. Clearly, a major gap, with an opportunity to close it. How do we think about the opportunity to move the top line in the Warnaco business versus the operating margin, and which do you see improving more quickly and what kind of pace?

Okay, Dave... David J. Glick - The Buckingham Research Group Incorporated: Over time.

I understand. I think the way -- look, we believe that there is significant long-term top line opportunity for Calvin given the -- if nothing else, the geographic growth that we see with the business and the product category introductions that we can have that we haven't allowed Warnaco, as our major distributor in Europe, Asia and Latin America, to really have access to. So men's and women's sportswear and accessories clearly are a tremendous growth vehicle for us outside of North America. They are significantly underdeveloped compared to all of our -- compared to the Tommy Hilfiger businesses in those regions. So there's tremendous top line growth. How that plays out over the next 3 years, I have to be directly honest with you, that's what's in process now, is the strategic overview. What I do have strong confidence -- and I think it will be there, I'm just not ready to quantify it by year and really lay it out in great detail at this point. Perhaps 6 months from now, we'll have an Analyst Day and we'll go through it and we'll be able to put more color on that as we have our arms around the acquisition. As we look at the -- but as we look at the operating margins, to your point, if you think about let's take the $1.8 billion of Calvin Klein business that exists at Warnaco, that business is operating at an 8% operating margin. That business has a clear opportunity to move towards our consolidated PVH operating margins over the next 3 to 4 years. And I think it will be a cadence over that 3- to 4-year period that we move from 8.5% to something approaching, let's use 12% as a reference point at this point now. So I think you could anticipate operating margin expansion during that period of time as we go forward.

And we'll take our next question from Christian Buss with Credit Suisse.

This is Bilun Boyner for Christian Buss. I was wondering if you put together any thoughts around how you will improve the acquired retail store portfolio. I know you mentioned some store closures, but other than that, are there any other early initiatives specifically for the retail network?

Yes. I think when we look at the business, particularly in Europe, there was a series of stores that were opened for revenue growth that appear to us to just be unproductive. So I'm think in first pass, very simplistically, I think there is a number of stores in Asia and in Europe that by closing will make ourselves more profitable and more productive, and we are aggressively moving in those 2 areas as we go forward. Secondly is Warnaco's strength, I believe, as a company has been on the wholesale side of the business. That's where their expertise have been, particularly in Asia. When you think about the Asian business, they've done a tremendous job of growing that business, but if you go through and look at the retail expertise that are in the business, it's not as deep. We clearly are a business that when you look at our business, we are -- just under 50% of our business is being done in retail, and we believe we bring a level of expertise that can help that business, particularly on the planning and in-store merchandise and presentation side of the business. And we're excited about that and we think you should really start to see those benefits really in 2014 as we're able to reposition the product, we're able to reposition some of the stores. That will come through. So the investments we're talking about making, planning systems, in-store merchandising, really try to enhance the customers' experience at point of sale, those things are all the investments and those things are really retail related, whether it's that we're directly operating the retail store ourselves or in Asia, where we have a significant network of franchise partners and we are -- we believe we can help them run better retail businesses although we are selling into them wholesale.

Okay, that's very helpful. And then can you provide some more color on how Warnaco's new design team is progressing? I guess it was largely put in place earlier last year.

Yes, I think we are very satisfied. Karyn Hillman, who's joined us as our Chief Merchandising Officer over jeans and jeans accessories, we couldn't be more thrilled that she is there. The spring '14 product, and even to a degree, holiday '13 where they've had minimal influence, maybe more in North America than anywhere else, we really see the dramatic improvement in product. We've seen a significant improvement in quality. And she's brought a level of expertise with the team that she's brought in to focus on jeans that we think will pay dividends, and we're very happy that, that was an initiative that was put in place by Warnaco early on in the process, which we believe we can help that process, particularly on the supply side of the equation, really on the sourcing side, given our network and our capabilities that exist in Europe to source for the European denims business and in North America, given the large sourcing base that we have here. So we continue to believe we can improve the flow of goods systemically and getting them through our distribution network to help the product sell better on the floor and to get to the floor in a more appropriate basis.

And we'll take our next question from Kate McShane with Citi. Kate McShane - Citigroup Inc, Research Division: Manny, based on your comments, it sounds like the Latin America business of Warnaco is in much better shape. And you said you're not requiring any additional investments there. So will we start to see you growing the Tommy Hilfiger brand through their distribution system there this year or are you can wait for the entire platform to be revamped?

No, I think it's -- look, over time, both Latin America, Asia, I believe there's opportunities to appropriately bring businesses in-house. And in some cases, when we look at some geographic areas, it might not make sense to directly operate some of these businesses and will be more efficient to kind of have a licensing relationship or licensing/joint venture relationships, and we're looking at each of those geographies as we go forward. But in the short term, I don't think in the next 24 months you'll see a dramatic change in any of those businesses. We have a great partner in Tommy in Brazil. We believe we have tremendous growth opportunity with our Brazilian business in Calvin. We believe the real opportunity for Calvin, when you think about the Latin America business of Calvin, it is principally a Jeans business. There is huge opportunity to grow the Sportswear and Accessory component of that business, men's and women's, and I think that's where we really should focus on, is taking the strength that we have in Calvin and growing the Calvin business and allowing our partner to grow the Tommy business. And then 3 years or so from now, look at both of those businesses and decide should we be thinking about bringing businesses in-house. Clearly, the deals we've struck have given us that flexibility. It's also done the same thing in Asia for us to give us the flexibility there. And I think as we look at our long-term growth, that's clearly part of our strategy. But the first priority is to get the operating platforms and infrastructures set up and then grow the existing Calvin business and then think about consolidating. Kate McShane - Citigroup Inc, Research Division: Okay, great. And then my second question is on cleaning up some of the inventory. How exactly are you going about it? Are you pushing through some of the underwear and jean inventory through your outlets? Or with regards to markdowns, how aggressive do you need to be to clear that inventory?

Okay. To be clear is whatever inventory -- the inventory issues that we're dealing with are in jeans. We don't have any significant inventory issues on the underwear side of the business. So this is really a jeans, denim issue, and it will require liquidation. We will use our stores as appropriate, and we'll also use the off-price channel. Our goal is speed. We want to be able to make the goods hit and disappear as quickly as possible. We don't want the goods to linger. It's not good for the brand, and it's not good for our cash flow and cleaning up the pipeline on product. I also think, secondarily, is we want to be in as clean a position when we -- not only in our channel, but with our customer's channel when we turn to spring 2014. So it's critical for us to really move quickly to clean this up. It will require some significant markdowns, some of which will be provided for the extraordinary nature of the markdowns, but all but some are a couple hundred basis points that is affecting the existing businesses as well because as you mark down certain level of goods, it puts pressure on your current goods as well. So we're contemplating all of that, trying to make it flow through, but that's the nature of how we're looking at it.

And we'll take our next question from Omar Saad with ISI Group. Omar Saad - ISI Group Inc., Research Division: Manny, can you talk a little bit about how the Europe team, the Tommy Hilfiger team, the talent you have over there, the infrastructure you have over there, how you're going to be able to leverage that with the Calvin Klein Warnaco piece in Europe that you brought in-house now? What are some of the key opportunities, and how will that progress over time? Is it a 2-year story? And is it revenue and margin category expansion, geographic expansion, or do you really need to shrink that business before you can start to grow it again?

I think as -- Omar, I think I said in my opening comments, I think it will be shrink the business initially, meaning 2013. And I think actually by shrinking the business, we'll actually improve the profitability of the business. We are really lopping off unproductive wholesale accounts and we're lopping -- we're taking out unproductive retail stores. That's our goal. We have a -- similar to North America, we have a profitable underwear business that we believe, with better inventory flow, we can make more profitable. And we have a disappointing apparel business, be it bridge and jeans combined, that has really been a money loser for us. That's the business where I think our Tommy team can very quickly -- quickly meaning spring 2014, very quickly bring improvements to. The supply chain in particular, Warnaco tended to source all of the European product out of Asia. A majority of our product comes out of the Mideast basin, much more quick response, react to the business, we have a proven supply, a quality supply base that has grown the Tommy Hilfiger denim business to a very profitable EUR 300 million business. So we believe we have the tools in place to really enhance that business. We think we are uniquely positioned, given the strength of the management team, given the product categories that we're really focused on to bring -- to see improvement in that business much quicker than Warnaco would have been able to deliver on a standalone basis, just given the quality and expertise of our management team and the credibility that the management team has with the key wholesale accounts throughout Europe. Country by country, having that sales network established, already having in the process of consolidating showrooms and sales offices in each major market, I think will really position us well as we go forward and should really start to pay dividends for us as we go forward. And the last thing I'd say is, consistently across the board, the Calvin Klein brand, all the research that we've done geographically, Europe, Asia, Latin America and North America, continues to support how strong the brand is. And even independent third-party research that you see in Women's Wear Daily or in some of the luxury magazines that do their own, the Calvin Klein brand is always -- is not the top brand, one of the top 2 designer brands in the world. This is infrastructure turnaround of a business. This is not a problem brand by any means. This is a brand that's got great opportunity for growth that we're just not taking advantage of, particularly in Europe, where the brand on a relative basis is so small compared to what the opportunity against the market is. Omar Saad - ISI Group Inc., Research Division: That's really helpful, Manny. And then still on the Europe, if you think about the success that Tommy has had with those guys and they've have done an amazing job, the wholesale and the retail business in this kind of lifestyle presentation a lot of times have been flagships for Tommy Hilfiger and that's kind of replicated in the smaller scale and a lot of the wholesale channels, is there -- does the Tommy team who's going to help with the Calvin transition in Europe, do they see that opportunity to kind of transition how the consumer interfaces with the brand over there? Is there a flagship opportunity in kind of connecting the denim and the underwear and the sportswear and the accessories all kind of under one consumer-facing retail format?

Definitely. Retail will be a significant portion of the growth. It's been with Tommy. Again, balanced retail, balanced flagships, balanced outlet store business, very profitable. And even our regular priced -- our regular specialty stores with Tommy are very profitable. We have 30 flagship stores throughout Europe as well. We think that there is a need for more retail presence -- more regular priced retail presence in major cities. And I think over the next 3 years, you'll start to see -- there's already a store in London, you'll see more presence in the U.K. You'll see more presence in France. And you'll see more presence, obviously, in Italy and Germany as we go forward. So there's clearly the need to also build retail up. One of the benefits we have is we have this tremendous underwear business that if managed inventory correctly and managed the flow, very profitable. And we have this jeans business that we think if we get right, we start off, we believe, with the business that's very profitable. So we don't have to build a brand in Europe the way the Tommy team over a 10-year period had to build the knowledge of what Tommy Hilfiger is with the European consumer. Europeans seem to have a very high opinion of what the Calvin Klein brand is, has a very high perception of that, so although we'll have retail stores and we will make investments, we are starting from a much stronger brand position than the Tommy management team had to start with in Europe. So we can use that I think to our advantage to move more quickly over the next 3 to 4 years.

And we'll take our next question from Eric Beder with Brean Capital. Eric M. Beder - Brean Capital LLC, Research Division: Could you talk a little bit about some of the other licensees for Calvin Klein now in perfume and, I guess, in the outerwear? How are -- how did those do, and what are you expecting those guys to do in 2013?

Sure. The Calvin -- let me start on the women's side of the business, North America, our key strategic partner there, G-III, that business grew double digits last year, driven by women's sportswear, dresses, suits and outerwear. The handbag business also had tremendous growth. We are planning that business right now at mid-single-digit growth. As usual, our partner G-III tends to be -- has consistently tended to be conservative in their estimates and have overachieved. We would hope that's the case this year. There seems to be more demand. And based on the performance of those categories right now, that would seem to be a conservative number. But that's the way the business is being planned, up 5% to 6% for 2013. The fragrance business, which is very large and very aspirational for the brand, we are planning very modest growth in that business, 1% to 2%. It's a big business. We have a big share of market there. Offsetting that is we have a number of new launches and particularly a big launch in fall that's going to have a significant marketing investment behind it. So we'll see how that will play out. So we think we are being reasonably conservative about the projections in the fragrance business as we go forward. Footwear has been an area that, and particularly on the men's side, has seen substantial growth. We're planning that business to grow mid-single digits, where this year it grew at a double-digit rate. So I guess I would characterize that we think we've taken a prudent approach with the licensing revenues. We think the categories that will continue to be strong for us have been strong for us, and we think if trends continue, there's an opportunity to outperform our estimates on the Calvin Klein Licensing side. So we'll see how that will progress. I hope that was helpful. Eric M. Beder - Brean Capital LLC, Research Division: In terms of the marketing spend, you talked about the Super Bowl ad. How should we think about the marketing spend going forward now that you've integrated Warnaco into the mix. And I guess it's kind of a more unified -- it was always pretty unified but even more unified marketing spend. How should we think about that going forward?

I think the marketing message will be more unified. I think principally be -- I guess the biggest differences we see going forward and it will -- 2013 will be an evolutionary year as we pull it in, but if you think about it is, by license agreement, as you would expect, the significant amount, the very large jeans business require that all of that advertising go directly to its jeans advertising. And I think that was out of balance for the brand. We think we'd like to spend that same amount of dollars and spend it on the Calvin Klein brand, similar to more with what we do on the Tommy side of the business, where we have denim and jeans ads, but we do it in a much more connected lifestyle brand focus. So that will be a bit of a change. From a spend point of view, I think you'll see a couple of things. I think the spend on balance will be about the same. I think what you'll see is clearly spending more digitally as we go forward, less in print, probably a little bit more outdoor than we've been to really complement the digital advertising. And I think as we go forward, more in-store marketing investments in fixtures, investments at point-of-sale marketing, investment in our own stores and our customer stores, taking some of the ad dollars and really putting in the hot zone and to drive business directly when the consumer is in there and acting on it. So as a licensor, we needed to -- the approach was all about brand enhancement and brand image-building, and I think the Calvin group does a great job of that. As we now are becoming much more brand operators and controlling over 50% of the brand directly, I think you'll see more of the brand spend at point-of-sale and really trying to deliver against a return more directly against sales as opposed to just image-building.

And we'll take our next question from Evren Kopelman with Wells Fargo. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: I wanted to ask about the Warnaco North America Calvin business, the one you said $500 million. So first, what do you expect for 2013 growth? I don't know if I heard that. And then secondly, you said it's pretty off-price club dependent. Like, if you -- can you give us a little bit more sense of the size of that? And going forward, should we expect maybe another year of reduction in 2014 before that starts to grow? And also, is the profitability of that off-price club higher than maybe the rest of the kind of department store business, and again we should we expect first a reduction in profitability as you balance that out?

Okay. I guess, the $500 million -- I'm not going to -- to make it really clear, I'm not breaking out distribution by channel. But what I would say is it's out of balance. What we'd like to see is more healthy balance as we go forward over a 24-month period. We are planning -- we are looking at the jeans business and planning it relatively flat to down low single digits in 2013 as we do some of that rebalancing. We really see a significant opportunity on the jeans side to grow the regular-price business. And that's a business that we really think will enhance the overall jeans presentation throughout North America, which we think is very important. So the short answer is, I think you'll see this business relatively flat over a 2-year period, but the plan is to really have more sales going through the regular-price distribution and slightly less sales going through the off-price. And again, that's really on the jeans side of the business. The jeans side of the business overall has been a much lower operating margin business. The club business, obviously, is a profitable business, but sometimes selling it to the off-price business is not so profitable. We really need to bring balance to that, and I think overall, we believe we can enhance the profitability of the U.S. business by just changing the mix of business, bringing some of our expertise to manage the businesses and flowing inventory better and potentially improving the product, which we think will have the real benefit of improving the sell-throughs of the gross margins as we go forward. Not necessarily looking at initial gross margins, but looking at maintained gross margins after sell-through, after markdowns and selling at higher price points. Better product will do that and it's easy to say and sometimes hard to execute, but we really think we see a clear lane to deliver against that. So I think relatively speaking, you'll see $40 million to $50 million moving out of the off-price channel -- club channel, moving to the regular-price channel over a 2-year period. So I don't want to overstate that as well, but it's important to get that. What's even more important, it's less about the club business. It's more about having jeans presented appropriately, consistently with everything else we do in the department store business, be it underwear, be it men's sportswear, be it women's sportswear, our accessory business. I don't think anybody presents product and presents their brand in a better way at the department store level than Calvin Klein, with the exception of the jeans business. And I think the jeans business, there's been a lack of shop investment, lack of point-of-sale investment. We clearly will change that. I know that will enhance the business, the presentation, put it front-and-center with the consumer. When we get the product right and the presentation right, the Calvin Klein brand consistently performs and shines. So we have little doubt that, that will be the case here. Evren Dogan Kopelman - Wells Fargo Securities, LLC, Research Division: Great. The other question is on the Heritage side, wholesale. I think you said a major turnaround. That's interesting to hear because of all the challenges in the mid-tier channel, but maybe give us a little bit more color on that kind of what's driving that. I think Van Heusen sportswear is new, I haven't heard about that as much, the strength there. And the other one is I think we're expecting an operating margin improvement in 2013 in Heritage, and if can you spell that out a little bit as well, is there still lower product cost benefit in -- early in the year? Maybe, what's the markdown opportunity?

Sure. Look, I think to put it simply, our Heritage businesses historically have operated on a 10% operating margin basis. We got -- we were -- we underperformed in the second half of 2011, and we underperformed in the first half of 2012. Operating margins this year are relatively flat with last year, at around 7%. So there's clearly a 200 to 300 basis point improvement that we think we'll deliver over the next 2 years. The part of the business that clearly is performing for us is our wholesale business, both dress furnishings and our sportswear businesses despite the weakness in the mid-tier channel. Our businesses there are healthy, performing. We've suffered with the contraction that's happened at Penney's on the dress shirt/neckwear side of the business from 2011, it's probably cost us $40 million in sales on the dress furnishings side, but by the same token, with the investments that we've made along with JCPenney on the sportswear side with Van Heusen and Izod, we've made up that $40 million difference between -- in the mid-tier channel to really position ourselves to be relatively flat overall, with the dress shirt business being weak, but margins, because it's a replenishment business, under control and not really being able -- taking a big hit there. We think we're well positioned as we go into '13 to continue the momentum we saw in the second half of the year on the wholesale side of the business. So we -- I would anticipate operating margins at least 100% higher for the year in 2013. The challenge for us continues to be our retail businesses, which are -- Heritage, which are underperforming and we need to get those back in line, and we're working very hard on that. But clearly, we're seeing significant wholesale margin expansion.

And we'll take our next question from John Kernan with Cowen. John D. Kernan - Cowen and Company, LLC, Research Division: I wanted to shift gears a little bit to Tommy Hilfiger, which obviously continues to be on fire both in North America and international. If we look at some of the operating margin expansion there, particularly in North America in 2012 and in international as well even in the face of pretty difficult currency comparisons, how...

John, I'm sorry for whatever happened. You broke up on my end. I apologize. Could you just repeat the question? John D. Kernan - Cowen and Company, LLC, Research Division: Yes, sorry. On Tommy Hilfiger, obviously been a great -- the momentum there continues. North America operating margin, up another 400 basis points this year. International side of the business, the operating margin increased in the face of difficult currency comparisons. How should we think to model the Tommy Hilfiger profitability going forward?

I think we would continue to look for 20 to 40 basis points improvement in overall Tommy Hilfiger margins. The inter -- mix may play more positively to that as we go forward. But given where we are performing now at these levels, I think that's a reasonable place for us to be. I think that there's opportunity, but clearly we've captured tremendous opportunity in 2011 and '12. So I think you have to think about it more in those terms. John D. Kernan - Cowen and Company, LLC, Research Division: Okay, great. And then just shifting back to the Warnaco portfolio with EBIT guided down about 20% and revenues flat. What's the magnitude and when do you think the top line growth in that Warnaco portfolio can start to begin again?

Well, I think really it's a 2014 story and beyond. I think it's -- and I've got to be honest, we may be even shrinking the first half of 2014, but again, it will be -- what we will be shrinking is unproductive, unprofitable sales, not necessarily productive sales. And what you have to think about also is, there was a pressure on Warnaco, given the licensing agreements in place, that certain sales threshold needed to be maintained and grown in order to maintain the business. So there was an appetite on that side to grow the top line in order to maintain the license and some of that growth was cannibalizing other businesses or just not very efficient growth overall. As the operator of the brand, obviously, we want to clean that up and really bring it to a much more productive base. So I don't think you should be viewing this contraction in the business that we're going to have to go through for the next 18 months as a negative. And we will try to be clear that -- what channels or what's causing some of the decline and try to give you a clear picture into how we're seeing the growth in the regular-price department store business, with some of our wholesale key accounts around there and with the ongoing comp retail businesses as we see it and pulling out -- we will pull out the businesses in the stores that we're identifying to be closed out of the comp numbers so we can really try to isolate that for the investor base as we go forward. So I guess I would just say is, don't view some of that contraction as a negative. There is growth as we go forward. We see it in Asia and Latin America in particular. And the growth in North America, although it may be net-net getting rid of some bad distribution for some good distribution, I think you'll see the operating margins improve there as we go forward, and a very similar story in Europe as well. Shrinking to more profitability, I think, in the next 18 months in Europe and North America is the critical focus. John D. Kernan - Cowen and Company, LLC, Research Division: Okay. And then one final question for Mike. In terms of CapEx for this year and next, where do you see the CapEx needs of the business? And then, how should we model debt paydown on an annual basis? Michael A. Shaffer: Okay, what we're talking about for CapEx for this year is about $300 million. I think as you look to next year, that number will probably be similar to this year, at about $300 million. In terms of -- just a heads-up, that doesn't include the onetime cost which we're talking about and captured separately. So true CapEx for the ongoing business is about $300 million. And debt paydown, we're looking at about $400 million for this year.

And we'll take our next question from Erinn Murphy with Piper Jaffray. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Manny, I wanted to circle back with some other comments you made earlier on -- just on the sourcing and supply chain opportunity for Calvin Klein Jeans. I mean, as you've dug in there a little bit deeper over the last 45 days in related to this opportunity, can you just share a little bit more detail around your learnings of what has maybe surprises you there most, and maybe compare how you're viewing the Calvin Klein Jeans opportunity for improvement relative to what's happening at the Calvin Klein underwear business from just a sourcing and supply chain perspective?

Okay, I guess the biggest surprise and the biggest opportunity as we go forward is a significant lack of inventory planning systems. And the lead times required in the Calvin Klein Jeans and underwear business are 4 to 6 months longer than what we are used to operating at. So the management team has been forced to have to make decisions 12 months out on inventory purchases and commitments with their factory base, where we tend to make commitments out 6 months usually and sometimes 8 on some categories. We're making commitments, but not committing exactly to what's being made. So there was really an over -- a very long lead time that I think really when business gets a little bit tighter is where you really see that coming back to hurt you in the business. When you're in a growth mode and growing square footage and committing to inventory in some respect, in that process, there's inventory -- there's never enough inventory because you're growing so fast and you're adding square footage above your plans, but in the case where you start to see some contraction in the business, where you start to see some softness, as what's happened the last 18 months, that's how inventory builds and you can't react to it as quickly. So that was the biggest surprise and opportunity that we see to get out to really bring some of the planning systems and disciplines that we have here that I think will help more efficiently run the business and potentially allow for more margin -- gross margin opportunity as we go forward, not from lower cost, but from a better flow of inventory. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Okay, that's helpful. And I guess from a sourcing perspective, are you going to be changing some of the sourcing infrastructure from a factory perspective? Will you be moving over some of the former Calvin Klein businesses to any of your Tommy Hilfiger factories? Or how will you be thinking about the refinement there?

I think you'll see refinement on both sides. It was a -- the sourcing team at Warnaco in the Far East was very strong. It's got a long experience. There is some real -- there's some positive things there that we can take advantage of. And on the flip side, there's some real opportunities to -- again, I just want to be clear, it's not necessarily about lower cost. It's about quicker response times, shorter lead times that we think will really improve the efficiency of the business. So this is not about taking our woven shirts and their woven shirts and squeezing another $0.25 out of that. I think Warnaco did a strong job of negotiating low cost, but I think the miss is, I think there's more opportunity sometimes to pay a little bit more for goods with a better factory, better sourcing base that delivers you more flexibility and ability to react the business, both from a fashion point of view and from a flow point of view to get your markdowns under better control. And I think that's what we really see as the big opportunity. Erinn E. Murphy - Piper Jaffray Companies, Research Division: That's helpful. And then just one last question. As you think about kind of investing a little bit more this year from a talent perspective, are there any kind of key adds you're still -- or holes in the business that you're still waiting to hire into, or where should we be thinking about some of the pockets of opportunity in developing or hiring in some new talent?

Yes, look, the 2 biggest holes in the business, and they've been there now I guess 9 to 15 months, is the regional president/managing director in Europe for Calvin Klein. That position has been opened. That's a key position, and I don't know how you have a turnaround without strong leadership there to really run it. And in a similar way, in Asia, the regional president/managing director position has been opened for 9 to 12 months. And we are aggressively out performing a search to try and bring in very strong talent there, looking for, particularly in Asia, retail expertise, as well as brand expertise to bring in to that part of the world. We've got a very high-quality management team in Asia, country by country, China, Korea and Southeast Asia, as well as a strong group function, but we really need the leadership on the ground to really bring that all together that could really help each of the country managers more efficiently operate their business. Those are the 2 key hires that are missing and have been open and I think have caused some of the issues that the brand is dealing with.

And we'll take our next question from Howard Tubin with RBC Capital Markets. Howard Tubin - RBC Capital Markets, LLC, Research Division: Maybe just one final question on Tommy Hilfiger in North America. It seems like you've done a great job elevating the brand here through your catalogs and your fashion and the advertising you've done. How do you leverage that? Is there a price point opportunity in Macy's or an opportunity to open more standalone kind of flagship stores in North America?

Well, I think the way we have leveraged that is, our average unit retails over the last 3 years have moved from below $30 to close to $35 in sportswear. That's a 20% increase over a relatively short period of time. That's been key. I think clearly, the demand that's being created, the kind of comp store growth that we've seen of double-digit growth since the acquisition in North America clearly is a big piece of that. So -- and the kind of margins today that we're reporting in North America that are 14% operating margins in North America, I think that is, to me, the best evidence that these marketing investments have paid huge dividends. I think the key -- what's terrific about that is the 14% operating margins or the almost 14% overall Tommy Hilfiger operating margin of about 13.6% overall, those operating margins include the significant investment in advertising that we've made, so the thing that we've been able to do is grow the business, expand the profitability and invest and grow the advertising and marketing commitment for the brand. I think being able to accomplish those 3 things has been key and allow us to continue to grow the business at both wholesale and retail in North America.

And we'll take our next question from Steve Marotta with CL King & Associates. Steven Louis Marotta - CL King & Associates, Inc., Research Division: Very quickly, most of my questions have been asked and answered. Of the $0.40 delta in EPS from the Warnaco acquisition, specifically cited those 6 investment areas, can you talk about, is any one disproportionate with the other?

I think... Steven Louis Marotta - CL King & Associates, Inc., Research Division: In other words, is eliminating surplus inventory a bigger drag than any of the others?

I think the -- well, I guess I would say is the amount -- the biggest surprise was the amount of open positions in the business. The hiring freezes that were put in place over the last 12 months that we lifted immediately really put pressure on the business. And that was a big surprise to us, seeing as many open positions in Asia, Europe and North America as we did. That was the biggest surprise and having to deal with the fact that year-over-year, having to put those bodies, those positions back into the cost structure and the pressure that puts initially on the business, it's just the right thing to do, but having those open for so long a period of time has really put pressure on the business.

And we'll take our next question from Dana Telsey with Telsey Advisory Group. Dana Lauren Telsey - Telsey Advisory Group LLC: Can you talk little bit about the stepping stones that we should be watching over the next few quarters as you make your way through the balance of the year? And then, Manny, as you think about 2014 and beyond, the 15%-plus earnings growth that could be achieved, how do you think about the base business versus Warnaco? Where do we see it?

Dana, I think -- let me take the last part first. I think it's going to become more and more difficult if we do our job right to really tell the difference between the base business and the Warnaco business. If we integrate this the way it's supposed to happen, the 2 businesses are going to come together, and you should be able to really view what I would say the Calvin business through the lens much more clearly going forward to really look at a business that has been a licensed business, which comes with it significantly lower revenues but outsize the operating margins, and it's not comparative to any other brand in the industry because of that fundamental model. By changing here, I think not only can you compare it to the Tommy Hilfiger business and how it performs, but you could also really compare it to other brands as you all seem fit. It will be a much clearer picture to look at the operating margins and have licensing as a key component, but not the sole driver of the business. I think what you're going to see as you go forward, you're going to see us consistently growing our top line as we take businesses -- as we take these businesses in and our operating margins really moving more towards the Tommy operating margins over a period of time. And that will be key to watch as we go forward with that, with the nuances between the 2 brands geographically. I think the key issues for me, I think you'll hear us talk about it and we will be clear to talk about it is, where the profit drivers in this acquisition will really come out of Europe and Asia principally, we have very solid businesses and we don't see anything changing in Latin America. The North America business, I think, will get enhanced, but it's already a big business and profitable. The underperformance in Europe, clearly starting to see that business start to turn around, will be an indicator of how this whole process is moving. And Asia, maintaining its operating profitability while at the same time initially slowing the growth a little bit, but then really kicking in the growth as we go forward. I think those will be the key drivers for the business. The base business, I think, I don't see any reason the next -- look, 3 -- 36 months, we continue to see the Tommy Hilfiger growing top line mid- to high single digits. If we grow the business mid- to high single digits, we can grow the earnings 15% to 20% there. That's a healthy business. We think the European business continues to have opportunity to grow its operating margin expansion as we've layered on some of these new businesses, tailored and some of the others and some of the startup costs get behind us as we go forward. Those businesses will kick in more efficiently, so I think the Tommy business is very healthy. And I think we need to watch the Heritage businesses. We're going to look at that whole portfolio. It's going to represent 25% of our sales and 15% of our profits. So it's a small component, but we will continue to look at that business and make decisions about running that business from a cash flow operating point of view and look for opportunities to enhance that overall model.

It appears there are no more questions at this time.

Okay. Perfect timing. Thank you very much. We appreciate everybody's time for the call today, and we look forward to speaking to you in late May or early June with the first quarter press release. Have a very good day and a happy holiday.

And this concludes today's conference. Thank you for your participation.