Newell Rubbermaid Inc (NYSE:NWL) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Core Sales Outlook
John Faucher – JPMorgan: Can you talk a little bit about the core sales outlook for next year in terms of – you talked a little bit about the cadence, can you break out the impact of the Decor business in terms of whether you think that’s going to be up year-over-year or is that going to be just less of a drag or do you think it can be additive to growth? Then I guess, as you move from the sort of structural investment on the SG&A side to the more marketing let’s say, how long do you think that pays off and what’s the run rate?
Michael B. Polk – President and CEO: John, I’ll take those questions. So, on Decor, it’s not likely to be a growth lever for us, although, the overall Home Solutions segment should deliver growth in 2013 despite having Decor as a drag. The thing to remember on the Decor business is the flow through the year. So, we’ll continue to have an issue in Q1 related to JCPenney not so much related to our operational challenges from the manufacturing consolidation that we did. That may get enhanced in the month of March. As they do the conversion work in store to their Home section reset in early April, so that’s something we have to watch. We actually don’t have as much clarity as you might think we would as to when exactly they’re going to make that move. So there’s some dynamic – we’re going to have to look at that dynamically through the first quarter. I would expect that, that reset doesn’t get traction until the second half of the year. So the first half continues to be a bit of a challenge on Decor, but as I said in the script, the other parts of that segment are really beginning to do reasonably well. We’ve really stepped up the merchandising support and frequency in segments of the Rubbermaid Consumer business and we’re seeing that respond. You could see that in our Home segment results in Q4. We’ve established – we actually have five drive periods set up, that the new CDO will be able to merchandise around in 2013, one, that’s being executed, right now around the Super Bowl with our Food and Beverage portion of the consumer portfolio, another that’ll happen in April connected to spring cleanup, one around the 4th of July, one around back to school, and then one around Black Friday. Four of those are new relative to prior year. So, we’re looking to play the other portions of the portfolio within Home Solutions to compensate for what will be another challenged year, albeit, the drive will not be as significant as it was in 2012. With respect to your question on the flow in of A&P support in other investments and capabilities, our flexibility to do that enhances, as we go through the year. We’ve got in the first half the final tranche of renewal one savings that flow to the P&L and we will manage that. It splits pretty evenly Q1, Q2 and then we see in Q2 the beginning of the more substantial flow in of renewal two savings. Cumulatively, as I said in the script, we’ve got $75 million to work with. I would expect that spending to start to step up in Q2, but the majority of it will be back half loaded and that’s why our core sales growth flows the way it does. We do have rollover programming that will need to support through the entire year connected to InkJoy year two, connected to Parker Ingenuity year two. We’ve launched in Q4 this terrific partnership with the bunch of different artists and music connected to Sharpie self-expression platform which kicked-off with the launch of One Direction’s tour in the U.S. and we’ve got Parker’s 125th anniversary that will won our market through the first half of the year. So, it is not as simple as I laid out in the script, but the step up will really happen in the back half of year with the rollover of 12 initiatives getting more continuity support through the first half.