Raj Mehan James Patrick Hackett - Chief Executive Officer, President, Director and Member of Executive Committee David C. Sylvester - Chief Financial Officer and Senior Vice President Terry Lenhardt

Budd Bugatch - Raymond James & Associates, Inc., Research Division Matthew Schon McCall - BB&T Capital Markets, Research Division David S. MacGregor - Longbow Research LLC Todd A. Schwartzman - Sidoti & Company, LLC

Good day, everyone, and welcome to Steelcase's Third Quarter Fiscal 2013 Conference Call. As a reminder, today's call is being recorded. For opening remarks and introductions, I'd like to turn the conference call over to Mr. Raj Mehan, Director of Investor Relations.

Thank you, Jonathan. Good morning, everyone. Thank you for joining us for the recap of our third quarter financial results. Here with me today are Jim Hackett, our President and Chief Executive Officer; Dave Sylvester, our Chief Financial Officer; Mark Mossing, Corporate Controller and Chief Accounting Officer; and Terry Lenhardt, Vice President Finance and for the Americas and EMEA segment. Our third quarter earnings release, which crossed the wires yesterday, is accessible on our website. This conference call is being webcast, and presentation slides that accompany this webcast are available on ir.steelcase.com and a replay of this call will also be posted to the site later today. In addition to our prepared remarks, we will respond to questions from investors and analysts. Our discussion today will include references to non-GAAP financial measures. These measures are presented because management uses this information to monitor and evaluate financial results and trends. Therefore, management believes this information is also useful for investors. Reconciliations to the most comparable GAAP measures are included in the earnings release and webcast slides. At this time, we are incorporating, by reference, into this conference call and subsequent transcript the text of our Safe Harbor Statement included in yesterday's release. Certain statements made within the release and during this conference call constitute forward-looking statements. There are risks associated with the use of this information for investment decision-making purposes. For more details on these risks, please refer to yesterday's release in Form 8-K, the company's 10-K for the year ended February 24, 2012, and our other filings with the Securities and Exchange Commission. This webcast is a copyrighted production of Steelcase Inc. And with those formalities out of the way, I'll turn the call to our President and CEO, Jim Hackett.

Thank you, Raj, and good morning. Happy Holidays to everyone. Steelcase is reporting a good quarter of growth and other notable improvements with this call today. And these results were in line with our expectations, and you'll recall that we projected our growth rate would slow down given a very strong third quarter last year. Now each of our business segments were profitable in the third quarter, with the most notable advancement in year-over-year operating margins, in the Americas. Europe continues to be below our target for consistent profitability despite the noted improvement in this third quarter news. Our management team has been studying the question of the fitness of our European business model. I believe the fiscal cliff debate in the U.S. has overshadowed the issues in the European sovereign debt struggle. The press was really kind of shifting its focus back here to the U.S And with news that the liquidity has improved in Europe, there's still a long-term pan-European governance and problem-solving questions that we believe will still get answered and we believe this is going to be an important market in what we call our far horizon. Dave Sylvester, our CFO, will discuss our quarterly results in more detail in a few moments, but first, happy for me to take a minute to discuss well-deserved recognition of Dave's initiative and leadership. And maybe you've come across the main feature article in the CFO, Chief Financial Officer Magazine, this month. Dave is featured as part of a report on how our finance team is demonstrating the applied workplace trends that we've been describing for several years to our customers. Dave's organization was the first inside the corporation to model these new concepts to more realizing the financial and motivational benefits that we target for our own customers. If I had to summarize the link the article in a sentence or two, it would be this: even the accountants and the tax experts and other number-crunching folks are working very hard and differently today. They can benefit from greater worker mobility and from access to more collaboration with embedded technology. Now these and other Steelcase messages are resonating with our customers and I should note they continue to visit us in -- pardon me, in record numbers. In addition to the area occupied by our finance team, we're developing additional spaces that support our broad understanding of the nature of work including what I have talked about in the past, how they fuse together global product development and design teams. I should also take a moment this morning to mention another member of my senior leadership team, since there's been some changes in his role since our last call. Jim Keane, whose job history here at Steelcase includes high performance stints as Head of Strategy, our R&D and our Chief Financial Officer and most recently, he led our sales and product development activity for the Steelcase brand in the Americas and Europe, has now been named the Chief Operating Officer for Steelcase Inc. The COO role gives Jim a broader assignment, both in geographic scope, because the Asian business is now reporting to him, as well in the business functions that are part of this organization. The role also involves moving our global manufacturing under his umbrella role. As you can see, it's a very important responsibility, and Jim has demonstrated the quality, intelligence and what I call the drive to compete that such an assignment requires. Now this allows me, as I start my 19th year as the company's CEO to spend more of my time on what I call the far horizon, working on the future direction of our business. And 2012 has been a great year to think about the future. As most of you are aware, this was our 100th anniversary year, and as our celebration now sunsets, the spirit of that anniversary lives on. There's an incredible new confidence among our employees and the soul of the place was released with the celebration and a new energy for executing our strategies. Now as I look what happens in the news these days, I think, there are those who trumpet resistance to the idea of change, kind of the fear of risk or the uncertainty of the future. But we at Steelcase, believe the best is yet to come. On that note, I'll take a moment to wish you and yours, a wonderful holiday season and look forward to talking with you next year in 2013. Of course, I'll be here for Q&A and I'll turn our session over now to Dave Sylvester, our Chief Financial Officer. David C. Sylvester: Thank you, Jim. I will start with a few high-level comments about the third quarter results and balance sheet, provide some additional color commentary around our order patterns and outlook for the fourth quarter of fiscal 2013 and then we'll move to your questions. As Jim mentioned, we were pleased with the results of the third quarter and we expect the year-over-year growth to continue in the fourth quarter which, if achieved, will mark the 12th consecutive quarter of organic revenue growth since the worst of the financial crisis. For the third quarter, we reported organic revenue growth of 1% and adjusted earnings excluding restructuring of $0.22 per share, both of which were consistent with company estimates. For the Americas, which now includes the domestic portion of PolyVision's Technology business, the operating performance was largely consistent with our expectations. The 9.4% adjusted operating margin represented a 110-basis-point improvement compared to the prior year and we believe that we are continuing to gain market share in the U.S. based on our analysis of data reported by BIFMA. As it relates to EMEA, which now includes the European portion of PolyVision's Technology business, we were relatively pleased with their results this quarter as the order patterns and adjusted operating income were better than expected. However, given the level of our year-to-date operating losses and broader economic uncertainty in Europe, we remain committed to improving our business model across the region. Within the Other category, which still includes the PolyVision's Surfaces business along with Asia Pacific and Designtex, all the businesses were profitable and our results, in total, were consistent with the second quarter and with our expectations. We did experience sequential improvement in adjusted operating results for Asia Pacific and Designtex, but a seasonal decline in the Surfaces business of PolyVision offset these gains. Adjusted operating income at the consolidated level of $44.4 million or 6.1% of sales, represented a year-over-year improvement of $2.4 million or 20 basis points, relative to sales. The improvement was driven largely by 2 factors: first, the modest organic revenue growth in the quarter included improved price yield compared to the prior year, while our global commodity costs reflected modest deflation; second, net savings related to our North America plant consolidations contributed approximately $3 million. They were also a couple of factors that muted these year-over-year benefits. First, we continue to experience a higher mix of large project business globally, which is being somewhat offset by a lower mix of federal government business in the U.S. Second, variable compensation included a year-to-date adjustment of approximately $3 million. On a sequential basis, third quarter adjusted operating income declined by $6.1 million compared to the second quarter, which reflected very strong seasonality due to large project activity. The sequential organic revenue decline of 4% was the biggest driver of the reduced profitability. Higher net savings related to our North America plant consolidations and incremental benefits associated with recent pricing actions were largely offset by the variable compensation adjustment, I just mentioned. Restructuring costs in the quarter were in line with our expectations as well. The North America plant consolidations are nearly completed and we expect to record approximately $2 million of remaining restructuring costs in the fourth quarter related to these actions. Those final costs bring the total restructuring charges related to these consolidation activities to $42 million, and we continue to estimate annualized savings of approximately $30 million to $35 million once these actions are completed and local supply chains have been established. During the third quarter, benefits realized of approximately $6 million were reduced by approximately $3 million of additional freight cost linked to legacy supply chains. We expect the benefits to improve and redundant costs to reduce, increasing the year-over-year net savings to approximately $6 million in the fourth quarter and improving from there into mid-fiscal 2014. Regarding our plan to integrate PolyVision's Global Technology business into the Steelcase Education Solutions group, we expect these actions to be substantially complete by the end of the first quarter of fiscal 2014 and, thereafter, generate the estimated annualized savings of approximately $7 million we communicated last quarter. We recorded approximately $2 million of restructuring charges related to these actions in the third quarter and expect to record the remaining $2 million of charges over the next 2 quarters. The results of the Steelcase Education Solutions Group are included within the Americas segment and beginning in the current quarter, the PolyVision Technology business, which is now branded Steelcase, is being reported in the Americas and EMEA segments. In connection with this move, we have reclassified our historical segment information and have provided supplemental historical information on our website. PolyVision's Surfaces business, which manufactures ceramic steel for whiteboards and other applications remains under the PolyVision brand name, continues to operate as a separate business unit and is reported in the Other category. One quick comment on income tax expense in the quarter, the 36.5% effective tax rate, included a few discrete items which totaled $500,000, causing the effective tax rate to be slightly higher than the estimate of 35% we communicated last quarter. Moving to the balance sheet and cash flow. We generated $100 million of cash from operations during the third quarter. A portion of this is due to a reduction in working capital commensurate with the sequential sales decline, which followed a seasonally strong second quarter and the portion is due to the cut off or timing of payment related to employee compensation accruals, which reduced the cash outflow during the quarter compared to the prior year. Capital expenditures totaled $24 million during the third quarter and we expect capital expenditures of between $25 million to $30 million in the fourth quarter. We returned approximately $12 million to shareholders in the third quarter, primarily through the payment of a cash dividend of $0.09 per share. Share repurchases during the quarter were not material. As it relates to order patterns, I will start with the Americas, where we experienced year-over-year order growth in the third quarter of approximately 7%. Order patterns in the quarter were strongest in September and October, reflecting double-digit growth rates, while order patterns in November were relatively flat, likely impacted somewhat by the negative effects of Hurricane Sandy. Also total order growth continued to be negatively impacted by declines within the U.S. Federal government vertical market. Customer order backlog for the Americas ended the quarter up approximately 9% compared to the prior year and continues to include a higher than normal mix of project business. We estimate that ending backlog was negatively impacted by $7 million to $8 million of order, which we believe were delayed due to the November hurricane. However, we also estimate that any orders which were delayed by customers in November have since been received. As a result, we do not believe that the storm and its effects have had a material impact on our results. Across quote types, orders for both project and continuing business grew at 8% compared to the prior year, while orders from our marketing programs grew closer to 4%. The third quarter was the first time in several quarters that continuing business grew at the same rate or better compared to project business. Vertical market order growth rates in the Americas were the strongest in the manufacturing, technical, professional, information technology and insurance services sectors. While energy, U.S. Federal government and Financial Services posted notable declines again this quarter. The decline in the energy sector was caused by a very strong prior-year comparison, which will continue for the next couple of quarters given 2 particularly large projects won last year. Elsewhere, education grew near the overall average and health care posted a small year-over-year decline. Within our product categories and brands, order growth rates in the Americas were fairly broad-based with notable strength in seeding technology and details. And across our geographic regions, third quarter order growth was fairly broad-based but was led by our Western and Midwest regions. Switching to EMEA, order patterns, in constant currency, remained mixed but grew by approximately 8% in total compared to the prior year. We experienced very strong order growth in Germany and the export markets of Eastern, Central and Southern parts of Europe, Middle East and Africa as a group. Orders in France and Iberia posted notable declines, while Northern Europe declined by a mid- single-digit percentage compared to the prior year. Customer order backlog for EMEA at the end of the quarter was approximately 12% higher compared to this prior year as orders during the third quarter included a relatively high level of project business which is expected to shift during the fourth quarter and early next fiscal year. Within the Other category, orders grew modestly on an organic basis compared to the prior year. Turning to the fourth quarter, we expect to report revenue between $695 million and $720 million, including approximately $4 million from recent dealer acquisitions. This compares to $690 million in the fourth quarter of fiscal 2012. Currency assumptions included in our revenue estimate represent small negative effects on the year-over-year and sequential quarter comparisons. After giving effect of these items, we estimate organic revenue growth in the fourth quarter will approximate 0% to 4% compared to the prior year. Sequentially, the fourth quarter revenue estimate represent's typical seasonality and translates to an organic decline of between 1% and 4%. We expect the mix of project business, in general, across the Americas, EMEA and Asia Pacific to remain relatively high and thus continue to negatively impact our gross margin and operating income in the fourth quarter. And we expect the costs associated with our product development efforts and other initiatives to increase our operating expenses somewhat compared to the third quarter. As it relates to our North America plant consolidation, we expect savings to improve and start up and other related costs to reduce compared to the third quarter. In addition, our fourth quarter earnings estimate anticipates year-over-year improvements in price yield associated with pricing action, taken in prior years, as well as additional yield from our recent price adjustment in April. With respect to commodity cost, our earnings estimate contemplates modest commodity cost deflation whether compared sequentially to the third quarter or versus the prior year. Finally, our fourth quarter earnings estimate contemplates an effective tax rate of approximately 35%. As a result of these factors, we expect to report fourth quarter earnings within a range of $0.14 to $0.18 per share including restructuring costs of approximately $0.02 per share associated with the manufacturing consolidations in North America and the restructuring PolyVision. This compares to $0.11 per share in the fourth quarter of the prior year, which included restructuring costs of approximately $0.03 per share. From there, we will turn it over for questions.

[Operator Instructions] Our first question comes from the line of Budd Bugatch from Raymond James. Budd Bugatch - Raymond James & Associates, Inc., Research Division: My question, I'd like to focus on EMEA noting that you had great performance, obviously, in the Americas and the contribution margin in EMEA this year really looks pretty strong, but what is the likely expectation for EMEA going forward? Where should the operating margin ultimately wind up? How quickly can we get there? I realize there have been some organizational changes so maybe if you can address and what the expectation is for the fourth quarter as well when you do that comment?

Well, you know we're in for a tough run in the European market right now. There's not any clear indicators that the broader economy is going to improve in the near-term and therefore -- and we know that they've got a lot of fiscal issues to deal with as well. So we're not planning on any kind of significant growth in the near-term outlook associated with the EMEA, but what we are trying to do is improve our operating results. I've talked about incremental improvements that we've been targeting in the last several calls across our organization which include, not only the front end of our business but the back end of our business as well, and we continue to push very hard on those. But I think it's going to be a few years before we see that business get to a higher level of operating income margin that I would expect in normal times, could be high single-digit. We're going to need some volume for that to occur and we're going to need some -- we going to need the organizational redesign to continue to occur.

Jim, I would just add that this is not a question of more persuasion to have -- give it attention. This is the kind of stuff we've actually learned how to manage and deal with and so it's about thinking through what we can do and there's a series of rules and regulations in that market that govern the way in which you can execute all the various things that you need to do to get the business model right. But the question of management's intent and capability to get that right is not, for me, an open question. David C. Sylvester: The last part of your question, Budd, was related to the fourth quarter. And I would just comment that in the fourth quarter, our current thinking is that they will be at a slight operating loss to break even. Budd Bugatch - Raymond James & Associates, Inc., Research Division: At a volume level, David, what do you think it will be? David C. Sylvester: Relatively flat with the third quarter. They always have had a very strong December and early January is not too bad for them as well. So from there, we typically see a seasonal falloff, but they got a very good backlog going into the quarter so we would expect the volume to be relatively flat with the third quarter.

Our next question comes from the line of Matt McCall from BB&T Capital. Matthew Schon McCall - BB&T Capital Markets, Research Division: So I heard a couple of new words, I don't know if I've heard before. You talked about marketing programs. I don't think I've heard -- heard you actually reference it that way, maybe my memory is failing me. And then -- so go through that comment, you talked about marketing programs, sounded like that, may have been synonymous with day-to-day and compared that to project and I think you said something, Dave, like the growth rates there were comparable, but yet you're still going to see elevated pressure from projects in the quarter. Just go through those comments again, make sure I understand them.

Sure. I said that orders in the Americas, for both project and continuing business, grew at 8% compared to the prior year, while orders from our marketing programs grew closer to 4%. So the marketing programs that I've mentioned on previous calls, those are targeted towards smaller customers and new business and it typically represents in the range of 20% of our business in the Americas and then you know historically, project and continuing is relatively balanced, kind of 40-40. So the split is 40-40-20. and that split, or that mix, has been altered significantly over the last several quarters. Matthew Schon McCall - BB&T Capital Markets, Research Division: Okay. David C. Sylvester: I think the year-over-year comparisons, starting next quarter, Matt, will be less of an issue for us because project activity really started to ramp up in the fourth quarter of last year as a percentage of total in the Americas, in particular. But it's still will be -- so the year-over-year consequences will not be as significant, but versus normal, it will still be high. Matthew Schon McCall - BB&T Capital Markets, Research Division: Okay. Another trend question and I enjoyed the article in the CFO Magazine and they gave plenty of examples. I'm curious about the percent of orders that you're actually seeing that are collaborative in nature versus what I would call I guess traditional products and maybe talk about the trends that you're seeing. How many customers are actually going that direction and how does that compare to a few years ago and how does that compare where you think it is going to be?

I think, Matt, that this is a tom-tom that we pounded on for a number of years, so just let me explain the movement and then I'll see what Dave can share with you, relative to the way that the market's segmenting. Part of what drives people to gather and meet is the nature of complex problem-solving. It's -- there's a lot written about the social power of teams working on problems. There's also a lot written how they can be distractions and people have a desire for, at times isolating themselves for focus but, at large, we were able to predict that this movement towards more team-based problem-solving corporations is going to a big deal. When you couple that with technology, you had like I would call a level 1 change, where the spaces that brand most buildings many of where you guys sit in Wall Street are out-of-date, with power and the right kind of furniture for this. The level 2 change happened as mobility started to also come into the office, and now, the nature of the kinds of devices that are brought into these meetings is outmoded -- outdated, I should say. The facilities in both the same ways the nature of the power support and the kind of furniture and configurations that would make it enable. So Steelcase, for example, invested a lot of money in the last downturn in a concept called media:scape. This continues to grow very well and helps you update some of those spaces. The kind of a gift that keeps on giving here is how this translated into other vertical markets like health care and learning, because the nature of meeting and gathering and group -- being groups, is not very different when you go into those vertical as it was in the office. So those segments have grown for us and become really important. I think, beyond that, it's been spread around the world and other markets can avoid the same kind of trend and so this might explain some of the share gains, as well as what I've been saying for a number of calls, is why the offices at large are so out of date. The last decade, many of them didn't get -- didn't address this, particularly in Western economies because they were investing in emerging markets. But, I don't know what else we share relative to the way the flows are coming in. I would say this, Matt, the core kind of cubicles are still the biggest part of our industry and so that is typical of long tailed kind of products and that these product exhibit the same thing. David C. Sylvester: Yes. I would just add, Matt, that a very high percentage of customers that we interact with when they come to Grand Rapids, and you know I don't see every one of them, but I do see a handful. I would say a very high percentage are dealing with compression. So they all are recognizing that they either have too many assigned workstations in private offices or that they're being underutilized and the flip side of the -- or the answer to that underutilization observation is that they're trying to collaborate more. So I think a large percentage are dealing with compression right now and a very large percentage as well are moving to a more to a collaborative environment. Meaning, as they compress individual workstations, they're adding more collaborative spaces. Now it's a question of degree because you have some clients that move a little bit from private office cubicle to more collaborative and then you have other clients that move all the way and they don't have a single assigned workstation in their entire office. Matthew Schon McCall - BB&T Capital Markets, Research Division: Okay. Let's see, one more. It wouldn't be an earnings call if I didn't mention the word, "bridge." So as you look at the next year understanding we don't know -- there's not really a lot even if what we say about the top line, if you want to offer, that's fine. But price cost, what was the benefit in the quarter? What's the opportunity to move up the next year? You mentioned the incremental benefit from restructuring may be quantified, the total benefit there, anything else we should keep in mind as we are trying to sort of -- trying to look out to FY '14? David C. Sylvester: Okay. So I'll start with the current quarter and what we also expect in the fourth quarter on price cost and the manufacturing consolidations. So price cost is a big deal for us. And for the -- that's code between Matt and I, it's for rest of the group that's just incremental pricing benefits year-over-year relative to what our commodity costs are doing. And you all know that, a few years ago, we had commodity cost inflation that was severe and outpaced our pricing actions. Well over the last few quarters, we've since caught up and then year-over-year inflation has flattened out. So we've had benefits of pricing without any kind of significant year-over-year inflation, but if you looked at it on a 2-year stacked basis, you'd say, okay, these guys are finally starting to offset that cumulative commodity cost and maybe even get a little margin on some of that incremental cost. So year-over-year benefit this quarter and next quarter is meaningful, we have estimates to that number, but I don't -- I'm not interested in sharing it because they frankly are pretty squishy estimates, but it's a relatively meaningful number. I would say, if nothing else, in the third quarter in the Americas, where we had 3% organic revenue growth, a big piece of that was pricing. On the modernization benefits, year-over-year, I mentioned that those were $3 million this quarter and that we expect them to be higher next quarter and I think we sized that at roughly $5 million or $6 million in the scripted remarks. For next year, we have, as you know, we've been targeting $30 million to $35 million of savings associated with the North America consolidations and we will not achieve that run rate by the end of this fiscal year. So by rough strokes of the pen, we would expect an incremental $15 million of benefit next year. Year-over-year, that will be less associated with incremental savings and more associated with the removing of the redundant costs and the -- putting in local supply chains versus legacy supply chains, and thereby, reducing freight. So that number could be in the neighborhood of $15 million, let's say plus or minus $2.5 million on either side. Price cost, next year, I don't see as a relatively big deal. I think on a cumulative basis, we've since caught up and I see pricing continuing to offset our inflation, but I don't see it being a big part of the bridge in the next several quarters. One other point is the PolyVision restructuring, which is targeted to save $7 million. We'll get a little bit of that in the fourth quarter, but the majority comes next year. So if you're a plus or minus 15 on the North America manufacturing consolidation next year, you can add another 7 to that, you'll be in the 20 to 25 range for year-over-year benefits of simply the restructuring our business. Thereafter, we're not in a position today to talk about the volume that we expect next year, but we do remain optimistic about growth in the industry next year and you all have seen all of the recent indicators that have come out, the ABI, some of the job growth has not been too bad and so we work in BIFMA data, I think, at 4% for next year or so we remain fairly optimistic about continued growth in industry. We continue to invest back in our business to sustain our momentum. So the remaining questions for next year, for you guys, to begin to try to model an outlook for us is, what's the top line going to do? What kind of normal contribution over margin, over fixed cost, can you expect? And then what kind of incremental investment might we layer in on top of that? I'm not ready to talk about the volume, I think that the contribution margin will continue to be at the 25% range, a little bit lower than our normal 30% because the weighting of project business continues to be higher. And as far as the incremental investments that we will layer in into our business, I'm not prepared today to size that, but we are going to continue to invest incrementally in the business.

Our next question comes from the line of David MacGregor from Longbow Research. David S. MacGregor - Longbow Research LLC: Can you just talk about where you're achieving market share goals within the various verticals? Where you're achieving your market share gains, I should say, excuse me, within the various verticals?

It's a tough question and I don't have a lot of the data in front of me. I would tell you that we didn't go into the year necessarily with targeted market share gain by vertical. What I've been commenting throughout the years, we've had very nice strength in the energy sector and some of the other verticals, manufacturing, IT and technical professionals have been referenced more often than not, has had a nice growth or leading our growth, but that's about all I can give you, David. David S. MacGregor - Longbow Research LLC: Okay. Can you talk about, from a product standpoint, which product lines led revenue growth in the quarter?

Well, the revenue growth was not that significant, right? it was only 3% organic, but what... David S. MacGregor - Longbow Research LLC: I'm assuming within the portfolio of products, there were numbers that were bigger and smaller than that.

Yes. So what I did comment on that had higher growth rates were seeding technology, which includes media:scape and Details, which is our work tools brand. Their growth rates were notably higher than the average. David S. MacGregor - Longbow Research LLC: I wonder if -- just with respect to Europe, I just want to try and better understand some of the moving parts over there, and I wonder if you could just remind us in the order by magnitude of the countries over there, where are you largest and maybe the top 2 or 3 countries in order of magnitude? David C. Sylvester: Germany and France, we've consistently said are the 2 largest and northern Europe and Iberia would follow them. David S. MacGregor - Longbow Research LLC: So northern Europe, like Scandinavia? David C. Sylvester: The U.K., Scandinavia, the Benelux region. David S. MacGregor - Longbow Research LLC: Okay. And then finally, just on the project business. There's been a large discussions there about the project business. If you look back kind of over the last 3 or 4 quarters versus where we are today, I'm just wondering if sort of the level of discounting around project business or just how aggressive people are pursuing that business? Is it increasing or decreasing or can you just give us some sense of how that is evolving?

This is Terry Lenhardt. The market remains competitive. Project business, obviously, discounted more than our -- continuing our day-to-day business but we're not seeing anything irrational. It's -- the competition is similar to -- and pricing to, I believe, what we've seen over the last few quarters.

[Operator Instructions] Our next question comes from the line of Todd Schwartzman with Sidoti & Company. Todd A. Schwartzman - Sidoti & Company, LLC: Just wanted to take time to talk about some of the recent product introductions of it, which there have been quite a few. Just kind of get a sense of whether they're meeting expectations, for example, Verb, I think was supposed to start to ship last month or this. Is that on track? How would the order entry been there?

Verb's just getting started, so it's too early to tell. We'd expect to ramp up as expected, but it's too early to tell. Todd A. Schwartzman - Sidoti & Company, LLC: Likewise for some the new products on the health care, such as Nurture?

Right. But if you were to look at the ones that have been out there long enough to see a track record like media:scape or c:scape, we're seeing nice growth. FrameOne, our benching solution, well ahead of expectations so we're getting a nice run on those products that have been out there long enough to see that growth, like the Node chair for education doing very well. Todd A. Schwartzman - Sidoti & Company, LLC: Okay. On the inventories, it looks like the sequential bump was about a little shy of 10% from Q2 to Q3. Just looking back at the model, it doesn't really seem to be any discernible pattern over the years. Now there may been some acquisitions in there, so it's not apples-to-apples, but can you just give a sense of what's happening there?

What it was, Todd, largely, is build ahead for December. We're jammed in December and so there were build ahead going on. And then we also have a little bit of an anomaly at the end of third quarter, almost every year because our quarter closes on a Friday, following Thanksgiving. And so what we end up doing is producing a product that will ship over the weekend but depending on when those trailers are hooked and hauled, determines when it shows up in revenue. So if they hook and haul on Saturday and Sunday, then it shows up in the next quarter's revenue; if they hook up on Friday or before and haul it out of there, then it's this quarter revenue. So we refer to that internally as our trailers in the yard number, and that was pretty high at the end of the third quarter. Todd A. Schwartzman - Sidoti & Company, LLC: Got it, thanks. Jim, last quarter, you seem to be on the verge of alluding to, in the not-too-distant future, some detailed plan to improve profitability in EMEA. And again, this quarter, just even in release last night and when you started to speak earlier, it looks like, okay, now, here it comes and then kind of maybe take a step back. When can we look to -- when can we expect to hear some specifics as far as newly announced actions on the International side?

Yes, that work is the kind of stuff that you have to sequence the news in ways that everybody hears the same thing, at the same time. And the best I can describe to you is that, if you think of the social structures in the countries, it has an equilibrium to it that we're discussing all events to everybody at the same time. Now that's not to suggest there's something about Monday or Tuesday or anything like that, it just means that we have to be really mindful of the way that we choreograph and coordinate that now. But I guess, the best I can try and assure the people on the phone today is that -- the 2 aspects, we have developed a deep competency in being able to fix business models that -- where there's a mix of industrial footprint questions, go to market issues, sales restructuring, things like that, and we have the skills in tying that to kind of the evolution of our industry and where we think the markets are going. Now Europe, the thing that I have been doing publicly is around the news, it's in the media where there, most recently, were some companies that were in consumer products who opted out of parts of the Southern Europe that painted a picture that they don't see, they're not very optimistic, I should say. What I've been saying, as I talk, is that this is the second largest GDP in the world and it has great hold in terms of its promise and it has a substantial commitment to white collar workers, the people that we serve and so all that bodes well for an industry like ours. It's just that it's got to work through this banking restructuring problem in the face of lots of different voices trying to coordinate that. Like you, I spend a lot of time watching the news broadcast, Charlie Rose and others, interview all the leaders in Europe and understand the progress that has been made, and there's been a lot of progress made just in the last 6 months in terms of the way they've built the liquidity. There's just this suite [ph] news that banking system has coordinated a more formal window or, the way that loans will be managed, none of this was in place a year ago when there was a lot of speculation. That over-arching kind of information, couples with our internal work and will yield a plan in the program. And so we're just -- we're just back to my original point working through the rules of how you have to choreograph and coordinate all the information. Todd A. Schwartzman - Sidoti & Company, LLC: I realize if there is potentially quite a few people affected, so I do certainly respect that.

Well, it's more than just the great conscience of that, it's -- there's actually rules and regulations in terms of how you deal with the various unions and social groups, I mean their social planned structures are so different than the way the U.S. is constructed and so when you're in the middle of making changes and discussing potential things, you have to do it with everybody. We kind of honor that culturally here in the U.S. in the way Steelcase runs its business. But there, its formal. And so we have the skills in doing it because that's how we treat our people. There you have to prove that you formally have talked through with everybody that is involved in your business, about what it needs to do to get more fit.

This does conclude the question-and-answer session of today's program. I'd like to turn the program back to Jim Hackett for closing remarks.

Well, they're simple and heartfelt. We had a horrific tragedy in our country and I just would remark, like any of you, our families, our people, our company, will do anything we could to restore comfort in the hearts of those people that suffered from that tragedy and to restore faith in humanity and the spirit of opportunity that we believe lies in the business world. And so we're kind of going in into 2013 with a great attitude and, as you can see, some momentum and a spirit of hard work and a reality that we can get better. So those -- you kind of got my insight on my New Year's resolutions and I hope that you all have them and I wish you the best for this holiday season. Thank you very much.

Thank you. Ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.