Steven Austenfeld - Vice President-Investor Relations Stephen M. Robb - Chief Financial Officer & Executive Vice President Benno O. Dorer - Chief Executive Officer

Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker) Stephen R. Powers - UBS Securities LLC Jason M. English - Goldman Sachs & Co. Ali Dibadj - Sanford C. Bernstein & Co. LLC Olivia Tong - Bank of America Merrill Lynch William G. Schmitz - Deutsche Bank Securities, Inc. Christopher Ferrara - Wells Fargo Securities LLC Lauren Rae Lieberman - Barclays Capital, Inc.

Please stand by. Good day, ladies and gentlemen and welcome to The Clorox Company First Quarter Fiscal Year 2016 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. At the conclusion of our prepared remarks, we will conduct a question-and-answer session. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference call, Mr. Steve Austenfeld, Vice President of Investor Relations for The Clorox Company. Mr. Austenfeld, you may begin your conference. Steven Austenfeld - Vice President-Investor Relations: Great, thank you. Welcome everyone and thank you for joining Clorox's first quarter conference call. On the call with me today are Benno Dorer, Clorox's CEO and Steve Robb, our Chief Financial Officer. We're broadcasting this call over the Internet and a replay of the call will be available for seven days at our website TheCloroxCompany.com. Let me remind you that on today's call, we will refer to certain non-GAAP financial measures, including but not limited to, free cash flow, EBIT margin, debt-to-EBITDA and economic profit. Management believes that providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. Reconciliation with the most directly comparable financial measures, determined in accordance with GAAP can be found in today's press release, this webcast's prepared remarks or supplemental information available in the Financial Results area of our website, as well as in our filings with the SEC. In particular, it may be helpful to refer to tables located at the end of today's earnings release. Please recognize that today's discussion contains forward-looking statements. Actual results or outcomes could differ materially from management's expectations. Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management's expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. Turning to our prepared remarks, I'll cover highlights of our first quarter business performance by segment. Steve Robb will then address our financial results and our outlook for fiscal year 2016. And finally, Benno will close with his perspective and open up the call for Q&A. So turning to our top line results; as this quarter's performance highlights, the investments we're making behind innovation and strong marketing communications to drive profitable and consistent growth are working. On the top line in Q1, volume and sales were each up 3%. Despite about three percentage points of unfavorable foreign currency impact and slightly higher trade spending and supportive in-store merchandising, sales grew solidly, reflecting the benefit of about two points of pricing and slightly favorable mix. On a currency-neutral basis, sales grew 6%. All of our U.S. businesses grew sales in the quarter, as did our International business on a currency-neutral basis. In the U.S., 13-week market shares increased a half point versus the year-ago quarter to 23.8%. This is the highest quarterly gain, as well as the highest absolute market share since the conversion three years ago to the broader [MULA] reporting format. It's rewarding to see our investments in higher margin, faster growing opportunities paying off in stronger market share. More specifically, six of our eight U.S. retail business units increased market share, with particularly strong gains in Home Care and Charcoal. In addition to market share improvement, driving improved category trends remains a top priority for us. And during the quarter, our categories were up 1.8 points, slightly lower than recent quarters but still very healthy. With that, I'll review our first quarter results by segment. In our Cleaning segment, Q1 volume increased 5% and sales grew 6%, largely due to higher shipments of Home Care products. In Home Care, which is our largest U.S. business unit, sales increased strongly. The gain was driven by growth in all segments of our Home Care business, with Clorox-branded products performing well and particular strength in Clorox disinfecting wipes, during the back-to-school season as well as behind our new wipe products, which have been supported by advertising and strong retail merchandising execution. As noted a moment ago, Home Care was a key contributor to our strong market share growth, and has now achieved more than five quarters of market share gains. Heading into our second quarter, we are closely watching this fall's cold and flu trends, which have been relatively muted so far and recognize we'll also be lapping strong growth in the year-ago quarter in our Professional Products healthcare business, due to Ebola and Enterovirus concerns last year. That said, our Q1 results demonstrate that our Home Care business is on solid ground. Laundry business sales also increased in the quarter, driven impart by the benefit of an earlier Clorox bleach price increase. From a market share standpoint, our overall bleach share dipped slightly in the quarter after six consecutive quarters of share growth. At the same time, we were very pleased to see strong share growth on our Splash-Less Bleach products, which are a trade up from our regular product. Splash-Less Bleach is performing very well with a market share in its segment that is higher than our share in the regular bleach segment. In addition, Splash-Less Bleach is adding household penetration at the expense of private label, as we drive growth with new sizes and dedicated advertising. Consistent with our strategy, this is a great example of leaning-in on a margin-accretive product to drive profitable growth. In our Household segment, we delivered 1% volume growth and 5% sales growth. The segment's top-line results were driven by strong performance in our Bags and Wraps and our Charcoal business. In Bags and Wraps, sales were up mid-single-digits behind innovation in premium trash bags, as well as a price increase taken in late calendar year 2014. Similar to my comments on the bleach business, where we're benefiting from growth on higher-margin Splash-Less Bleach, the Glad business is driving category trade-up from our base trash bags to our higher-margin premium trash bag business, represented by our Force Flex and OdorShield offerings. Following a number of new scent offerings, new Glad OdorShield trash bags with the scent of Gain have been particularly successful, supported by advertising and strong digital marketing. Further, we look forward to sharing with you additional innovation in Glad's premium trash bag segment as part of our next quarter's discussion. In the Charcoal business, sales also grew strongly, and frankly, much stronger than anticipated, due to promotions, consumption, and outstanding retail execution behind the U.S. Labor Day holiday. In the quarter, we were lapping double-digit growth a year ago, so we were very pleased to deliver strong results on top of that. There is some risk, especially given the wet El Nino weather pattern being forecast, that consumption will slow, particularly following last year's mid-single-digit growth. But while whether may temper near-term results, our Charcoal business is clearly performing very well. Turning to Cat Litter, while our volume declined in this competitive category, Q1 sales increased behind the performance of our lightweight products. While competition in this category will remain intense over the next several quarters, we're looking forward to the launch of new Fresh Step with Febreze in calendar year 2016, which will make us stronger competitively. In our Lifestyle segment, volume increased 8% and sales grew 7%, with volume and sales improving in all three business units; Food, Burt's Bees and Brita. Our Food business performed strongly behind our Ranch with bottled salad dressings, such as Ranch with sweet chili and ranch with roasted garlic, as well as our dry Hidden Valley dressing and dip mixes such as Greek yogurt. On our Burt's Bees business, volume and sales grew double-digits, largely due to innovation in face care products, as well as the earlier timing of holiday shipments. Facial towelettes also continue to perform very strongly. Burt's Bees now holds the number four market share position in the lip crayon category, an impressive position recognizing the crayon category includes both conventional and natural offerings such as Burt's Bees. Turning to our Brita water filtration business, our strategy to drive trial of pour-through systems showed encouraging results in Q1, delivering mid-single-digit volume and sales growth behind strong execution during the back-to-school period and incremental distribution gains in ecommerce. Turning to International, volume for the quarter was flat, whereas sales declined 8%, reflecting unfavorable foreign currency exchange rates, essentially across all markets. On a currency-neutral basis, sales for International grew a solid 5%. Steve will discuss our financial results momentarily, but we're pleased that our Go Lean strategy in International is working, as we focus on pricing maximization, cost savings, rightsizing our infrastructure and optimizing demand creation. Strong execution of our go lean strategy in International is particularly important as we look ahead to the balance of the fiscal year, recognizing the possibility that foreign currency headwinds may worsen, which would put additional pressure on profitability in our International business. So to wrap up, although just 90 days into the fiscal year, we're pleased with our top-line performance. As we look to the balance of the fiscal year 2016, we remain committed to growing profitably through strong brand investment and clearly demonstrating through our 3D brand-building approach, the value that our products provide consumers regardless of price point. Factoring in our strong Q1 sales performance, as well as our outlook for unfavorable foreign exchange rates, as well as stepped-up competitive pressure in the second half of the year, we continue to anticipate sales to be about flat to up 1% or 3% to 4% on a currency-neutral basis. Now I'll turn it over to Steve Robb to provide more detail on our Q1 performance and our outlook for fiscal year 2016. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Thanks, Steve and welcome, everyone. Well, we're very pleased with the company's strong performance in the first quarter. We grew sales across all our U.S. businesses and in International on a currency-neutral basis. Importantly, we expanded our margins by driving productivity and cost savings programs across all our U.S. business segments. Now I'll turn to our financial results for the quarter. In our first quarter, sales grew 3%, with volume and pricing contributing a combined impact of nearly six points. Sales results also reflected nearly three points of unfavorable foreign exchange rates and higher trade promotion spending. Gross margin for the quarter increased 220 basis points to 45%, reflecting 140 basis points of cost savings, 110 basis points of pricing benefit and 100 basis points from favorable commodity costs. These factors were partially offset by 120 basis points of higher manufacturing and logistics costs. Selling and administrative expenses as a percentage of sales was essentially flat versus year ago, at 13.4% of sales. Advertising and sales promotion investment for the quarter was closed to 9% of sales, essentially flat compared to the year-ago period. In total, demand-building investments including trade promotion spending increased $13 million, reflecting support behind product innovation, which contributed to category growth and market share gains in the quarter. Net of all of these factors, we delivered diluted earnings per share from continuing operations of a $1.32, a 20% increase versus a year ago quarter, driven largely by strong sales growth and margin expansion. Free cash flow for the quarter was $107 million, or about 8% of sales compared with $205 million in the year-ago quarter or about 15% of sales. Free cash flow in the first quarter was lower, largely due to higher performance-based employee incentive compensation payments related to our strong fiscal-year 2015 results. Looking forward, we anticipate free cash flow for the fiscal year to be about 10% of the sales. In the first quarter, we repurchased about 1 million shares of our common stock at a cost of about $112 million to offset stock-option dilution. Our debt-to-EBITDA ratio was 1.8 times, below our target range of 2 times to 2.5 times. Now we'll turn to our fiscal year 2016 outlook. We continue to anticipate sales growth of flat to up 1% or 3% to 4% on a currency-neutral basis, reflecting strong first quarter sales growth and slower growth rates in subsequent quarters. Our sales outlook also takes into account the following factors; ongoing investment behind our innovation program, which we continue to anticipate delivering about 3 points of incremental sales growth for the full year. Continued slowing International economies with about 3 points of impact from foreign currency declines. With the ongoing strengthening of the U.S. dollar, we're closely monitoring the possibility of worsening exchange rates in the balance of the fiscal year. And finally, in light of the positive momentum in our market shares, we're preparing to address potential heightened competitive activity in the second half of the fiscal year, particularly in key categories, including Bags and Wraps, Litter and Home Care. Turning to margin, previously we had assumed gross margin will be flat for the full fiscal year. However, based on our strong first quarter results, we now anticipate gross margin to increase modestly or about 25 basis points to 50 basis points. The benefit of cost savings, pricing and lower commodity costs are expected to be partially offset by inflation, impacting manufacturing and logistics costs. Other moderating factors include higher trade promotion spending and foreign currency declines. Importantly, we anticipate reinvesting a significant portion of the benefits realized from lower commodity costs to drive top line growth. We continue to anticipate selling and administrative expenses to be slightly below 14% of sales in fiscal year 2016. We also continue to anticipate EBIT margin to increase in the range of 25 basis points to 50 basis points, reflecting modest gross margin expansion, moderated by incremental investments in consumer demand building programs and increased support behind our cost savings programs to fuel profitable growth. We continue to anticipate our fiscal-year 2016 tax rate on earnings from continuing operations to be in the range of 34% to 35%. And net of all of these factors, we continue to anticipate our fiscal-year 2016 outlook for diluted earnings per share from continuing operations to be in the range of $4.68 to $4.83. Considering the strength of our first quarter results and our confidence in executing our strategy, we're cautiously optimistic about the possibility of being in the upper end of our outlook ranges for sales and earnings. However, it's still early in the year and we need more time to see how the macroeconomic and competitive challenges unfold in the remainder of the fiscal year. In closing, we feel really good about delivering a strong first quarter. As we look to the remainder of fiscal 2016, we anticipate facing a more challenging second half. Nonetheless, we remain committed to focusing on profitable growth and reinvesting in our business, particularly behind product innovation and our cost savings programs will continue to be priorities. With that, I'll turn it over to Benno. Benno O. Dorer - Chief Executive Officer: Thank you, Steve. Good morning and good afternoon, everyone. There are three things we hope you'll take away from today's call. First, our 2020 strategy is continuing to work and that's reflected in our Q1 results. Second, because our strategy is working, we're staying the course, investing in the business to drive profitable growth. And third, we continue to face pronounced headwinds in the balance of the year and we've reflected that in our outlook. So let me summarize my perspective on these three areas. First, our Q1 results are strong indicators our strategy is working. Some highlights include the fact that our U.S. business achieved the strongest sales growth in several years and delivered it across all segments. Further, while currency effects are real and cannot be dismissed, our International business delivered solid sales growth on a currency-neutral basis and saw positive results for our go lean strategy, with solid profit growth in U.S. dollars, as well as in local currencies. In addition, strong innovation coupled with our increased demand-building investments translated to category growth, as well as the highest quarterly market share growth and our highest absolute U.S. market share in three years. And our focus on profitable growth, supported by trade-up, cost savings and commodity tailwinds help drive meaningful margin expansion in the quarter, with margin growth in all four segments, including International. So our strategy is continuing to work and we're staying the course to drive growth that is profitable and sustainable. In International, where our business remains challenged, in great part due to foreign currencies, much like every other U.S. based company, I'm proud of the tough decisions our team has made to improve profitability across that business for our shareholders. In particular, I believe the four pillars of our go lean strategy, pricing, cost savings, rightsizing and optimizing demand spending will pay-off in the long term. I feel very good about the future of this business, recognizing the fundamental strength of our brands in many countries. Turing to the U.S., we have a robust innovation pipeline across our portfolio and will continue investing in the business and focusing on delivering strong value to consumers. Our domestic business is healthy and we intend to continue supporting it with advertising and marketing communications, sales and trade promotion spending and strong retail execution. As many of you heard at our Analyst Meeting in early October, our analysis of traditional versus digital forms of brand building show that we're keenly focused on ROIs and ensuring our demand creation dollars work hard for us. We feel good about where we are. At the same time, it's still very early in the year. As Steve Robb discussed, going forward, we'll be monitoring foreign exchange rates for the balance of the fiscal year and commodity costs, which remain volatile and tend to rise over time. All said, we are very pleased with our first quarter performance and cautiously optimistic about the remainder of the year, which is reflected in what I believe to be a balanced outlook. And with that, let's open it up for your questions.

Thank you, Mr. Dorer. We'll go first to Wendy Nickelson with Citi. Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker): Hi, good morning. Thank you. Could you talk a little bit more about your expectations for the back half of the year? And I appreciate that at this point you'd probably want to leave your guidance a little on the conservative side, but are you seeing anything specific from competitors either in terms of more aggressive pricing or stepped up promotion or specific new products coming to the market that make you think you're going to have to respond more aggressively? Benno O. Dorer - Chief Executive Officer: Yeah, Wendy good afternoon. Thank you for the question. We think we have a balanced outlook that certainly reflects the strength of our execution, but also as you say, what we anticipate to be a tougher competitive environment in the back half, specifically as it relates to three categories. First Home Care, where we've gained a lot of market share for five quarters now and typically what happens is that, that will yield a stronger competitive reaction to that market share growth. In Cat Litter, as is very well known by now, we have innovation coming up in the back half and we think that that's going to increase the competitive activity in the category, and then in Glad, the third category where we are expecting somewhat heightened competitive activity. Commodities have been somewhat of a tailwind and we are investing in growth, reinvesting effectively much of that commodities goodness back in the business. So we expect that the competitive activity in these three categories is going to be heightened. We reflected that in our outlook and I said we want to continue to stay in the driver seat and invest in profitable growth. Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker): And can you talk specifically about your outlook on the advertising line? I know that was down just a hair in the first quarter, but it's obviously not hurting you. And I know you talked a lot at the Analyst Day about how digital marketing is helping you. But for the balance of the year are you still going to be in that kind of 9% range as a percentage of sales on advertising? Benno O. Dorer - Chief Executive Officer: What we said in the past, Wendy, which continues to be true is that there are always be fluctuations in spending by quarter, both in terms of the absolute spend as well as where the dollars are spent. I think we have noted today in our remarks that our total demand spend for the last quarter actually continued to be up. It happened this quarter that some of the increase spend was in trade, where we are getting good returns, in particular, because we're investing in trial building activities behind our innovation. And I think what we've also said, which continues to be true is that we're committed to increasing our overall demand spend by 100 basis points or 1% of sales. So that all will remain on track and certainly what continues to be true is that we remain very committed to the spend in digital, where we're getting very strong returns. Digital will be up to north of 40% of our working media spend this year, up from 30% last year. So advertising sales promotion, as well as our total demand spend will continue to be on track and will continue to rise for the balance of the fiscal year. Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker): Terrific. Thank you very much.

We'll go next to Steve Powers with UBS. Stephen R. Powers - UBS Securities LLC: Great, thanks. Good morning. So just, Benno, to clarify, so – or maybe Steve, the gross margin upside that you now see, are you saying that you expect most of it to flow through to advertising as the year progresses? Stephen M. Robb - Chief Financial Officer & Executive Vice President: That's correct. Essentially, as you noted, we raised our gross margin outlook to be up modestly for the full year. And our expectation is that's going to be largely offset by reinvesting some of the strong earnings we saw in the first quarter back into consumer demand building investments, primarily focused on the advertising in the second half. And we're also going to invest some of that in our cost savings initiatives where we've got some good projects underway to build a pipeline of ideas over the next few years. Stephen R. Powers - UBS Securities LLC: Okay. That's great. And then, again on the elevated spending in the back half on trade and promotion, how much of that is things that you expect to have to respond to versus things that you know, you yourselves will do in support of new innovation? Benno O. Dorer - Chief Executive Officer: It's the latter, Steve. As you know, part of our strategy is to continue to invest in profitable growth and profitable certainly needs to be underlined here. We're very committed to growth being profitable. So these are all investments that we're proactively taking in support of our strategy. They're not to respond to others' activities. Stephen R. Powers - UBS Securities LLC: Okay. And then, lastly, kind of stepping back, since we last spoke, Walmart has signaled a series of changes in its priorities and I'm wondering if you could help us assess how you see the situation developing, not only at Walmart but across the industry as Walmart seeks to step up its investment again in lower prices, optimize assortment and a streamlined supply chain? How does that impact your planning, whether operationally, financially or both? Thanks. Benno O. Dorer - Chief Executive Officer: Steve, what we're seeing Walmart as well as other retailers do is invest in growth. As you look at some of the remarks from Walmart, they are investing in improving their shopper experience, that should benefit Clorox as well as other players in the industry. All of our conversations with retailers today are about growth and about investing in growth, in particular, around the innovation, and that's perhaps also why we're seeing such strong top-line growth at this point, because we have a very strong and balanced innovation portfolio across all of our brands and our retailers are recognizing us for that. So, we're staying the course with our strategy and we're seeing success as certainly as evidenced by this last quarter sales results. Stephen R. Powers - UBS Securities LLC: Okay. Great. Thank you.

We'll go next to Jason English with Goldman Sachs. Jason M. English - Goldman Sachs & Co.: Hey. Good afternoon, guys. Benno O. Dorer - Chief Executive Officer: Hey, Jason. Jason M. English - Goldman Sachs & Co.: I'm going to echo a question that was asked on the Church & Dwight call earlier today because I think it's obviously relevant for your gross margin progression. Your view of resin costs on a go-forward, as we look at the cost curve, it looks like it stayed early last year only to creep back up in the summer and then fade again. So, it looks like from where we sit today this is a benefit that should keep on giving throughout your fiscal year, albeit at likely a more muted rate than we've seen before. Is that consistent with how you see things going forward? And if not, how's it different? Stephen M. Robb - Chief Financial Officer & Executive Vice President: Well, Jason, as you know, resin costs are particularly volatile, but here's what we would say. We'd certainly expect to get commodity cost tailwinds this fiscal year. And most of that will be driven by resin. And I also think it'll over index in the first half of the fiscal. If you go back to fiscal 2015, beginning in the fourth quarter, we saw commodity cost tailwinds, that continues straight to the first quarter, which came in as expected. And I would expect that to continue through Q2. As we get into the second half of the fiscal year, two things we're going to monitor very closely, number one is just energy prices, because that can have an influencing impact. Second is overseas markets because it is a supply and demand market. And then third, production capacity appears to be somewhat tight depending on who you listen to and it doesn't take much of a supply disruption to cause those markets to move up quickly. So, I think we'll get tailwinds for the year, they will be more in the first half than the second half and we'll start to lap that as we move through the fiscal year. Jason M. English - Goldman Sachs & Co.: Fair enough. One more and then I'll pass it on. You are not the first one to talk about moving dollars into trade and out of traditional pull-type vehicles, although I appreciate the aggregate spend is growing for you. Is it possible that we're on the cusp of more aggressive pricing action as the slush fund of money that's sitting within the trade budgets out there grows? Benno O. Dorer - Chief Executive Officer: So, Jason, what we said is that dollars will fluctuate and I can tell you that most of our trade dollars are going into everyday low pricing. So, I can't comment on slush funds, the way you mentioned it. What we're seeing is that trade promotion these days is particularly effective to support trial in our innovations. And that's why the dollars go there, but what we've also said is that we're seeing equally strong returns in our digital and social media spend and we expect dollars to continue to flow in those two areas. So, dollars will flow back and forth, I wouldn't read too much into what's happening in one quarter, but it's certainly true that right now our trade funds in support of our innovation are particularly effective. Jason M. English - Goldman Sachs & Co.: Very good. Thanks a lot and congratulations on the good start to the year. Benno O. Dorer - Chief Executive Officer: Thank you.

We'll go next to Ali Dibadj with Bernstein. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. I want to go back to Walmart for a second because you certainly said that they want investment to grow, and of course. But if you think about Walmart-specific virtual cycle, they have a very clear piece which is lower prices to the consumer drive sales growth. So, assuming there's elasticity there is their hope. And they've committed billions of dollars of price reinvestments, not this year but starting next year. So, I'm wondering, you guys are in such a strong position with them, you have great relationships with them. But that's somewhat of a double-edged sword because you do have the ability to drive volume in their store, traffic in their store, and volume out of lower prices. I understand you're trying to push innovation but might it be more difficult going forward given their shift and their commitment around pricing and their modus operandi, which is lower prices drives traffic in their store? How have your conversations shifted? And probably not yet but do you anticipate them shifting going forward on that specific topic? Benno O. Dorer - Chief Executive Officer: Yeah, Ali, so in many ways the way I'd look at this is, Walmart has always been about very competitive prices every day and they're going perhaps back to what has worked so well for Walmart for so many years and frankly what's helped build our business with them to such a strong position. Our conversations really have not changed, what Walmart's looking for is growth that is profitable and that's exactly what we're looking for. What Walmart is looking for is innovation and they've been particularly receptive, as have many other retailers, to strong innovation and there isn't a lot of great innovation out there in the marketplace right now, as we look at various categories and as you know, we're very committed to innovation, our innovation program is pretty strong. Fundamentally, they invest in where we invest in. They invest in neighborhood markets and they invest in ecommerce. Those are areas that we're very interested in and those are areas where market-leading brands will benefit from. So, I can tell you that while I, as you'll appreciate, can't comment on specific conversations that we'll have within every day, the conversations we have with them are predominantly around growth and that's not changed over the last few years. Ali Dibadj - Sanford C. Bernstein & Co. LLC: So, do you think the commitment to have "billions of dollars" of reinvestment in price more as posturing? Or – I guess I'll leave it there. Do you think there's more posturing in that sense? Benno O. Dorer - Chief Executive Officer: We'll have to let this play out, certainly. What I can tell you, as it relates to our categories is that our price elasticity certainly are such that, we have been rewarded and Walmart has been rewarded by trade up, by pricing, by all the activities that we have put in place over the last few years to grow, but also grow profitability. And we continue to have a very productive dialog with Walmart on what drives CAGR growth and what drives profitable growth. As you know, we advise them on their categories and most of the categories that we're in, so it's all I can say at this point. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. So if you perhaps use that as a jumping board and you look at your operating margins at 20.6%, again, background, biggest retailer took a profit warning, which are pretty much tying peak margins in Q1, at least, how sustainable should we think of those given what we just talked about, but also just given what you guys just said from a competitive perspective likely getting tougher, commodities being in this kind of good spot in terms of area under the curve as commodities are down and pricing is up? How should we think about the sustainability of the operating margin number you guys delivered this quarter going forward, stable, down, not just this year but beyond that, as well? Stephen M. Robb - Chief Financial Officer & Executive Vice President: So, Ali. This is Steve. Let me try this. Over the long-term we continue to remain committed to adding about 25 bps to 50 bps of the EBIT margin expansion as we've talked for some time. And we're certainly feeling very good about a relative fast start this fiscal year to do it and feel very good about our plans to do that. I think as you look at the longer term, our belief is the combination of margin-accretive innovation, the opportunity to take targeted pricing, particularly in International markets and even rebuild our International margins through our go lean approach, as well as SG&A management, all of those things and our cost savings programs I think gives us confidence that we're going to deliver good, steady margin expansion. But you will have some variability across the quarters, and we've had a really good quarter in the first quarter. I think – I feel very good about the first half, but I think the second half margins will probably be a bit challenged, just for all the reasons that we've talked about. So, in short, feel good about the long-term plans that we have for the company, but you'll have some ups and downs over time across the quarters. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. Appreciate the perspective. Thanks.

We'll go next to Olivia Tong with Bank of America Merrill Lynch. Olivia Tong - Bank of America Merrill Lynch: Great. Thanks so much. You talked about the potential for heightened promotional activity and competition by peers. Have you already started seeing some of that or is that more of an expectation that it will pick up as the year progresses? Because I'm trying to understand, if you grew 20% EPS in Q1, what's going to drive it to just basically flat for the rest of the year? Stephen M. Robb - Chief Financial Officer & Executive Vice President: So, in terms of the heightened competition, I think we've seen elevated competition for quite some time. I think as Benno and Steve had pointed out in their opening comments, historically when you build market share the way we have consistently quarter-after-quarter, the competition tends to come back a bit stronger. So we're certainly coming off of very strong first quarter results and it just seems prudent to us to take some of that strength and invest it back behind these innovation programs and consumer demand building programs that we have. And so that's really what we're signaling. We have yet to see another leg up in the competitive set, but as you know these tend to run in six-month windows, so we're being what we think is very responsible by stepping up the level of investment in anticipation of increased competition in the second half but we will have to see. Olivia Tong - Bank of America Merrill Lynch: Got it. Thanks. And then on the spread between volume and price, it seems to be contributing about equitably to sales right now. But would you expect that to continue to be the case as the year progresses or will you see a little bit of shift there? Stephen M. Robb - Chief Financial Officer & Executive Vice President: I think a couple of things, you're going to see us be primarily volume led, so volume will certainly drive top-line growth for the company, but in particular from our International markets, pricing will also contribute, but again a lot of that's just to try to mitigate some of the inflationary headwinds and the FX headwinds that we're seeing, so it's going to move up and down over the quarters, but it should primarily be volume with some pricing. Olivia Tong - Bank of America Merrill Lynch: Got it. And then just lastly on International, both price and volume decelerated this quarter. And volume was flat for the first time in quite a while, so can you talk about some of the drivers there? And is that sort of the run rate that you expect for the year what you did in Q1? Stephen M. Robb - Chief Financial Officer & Executive Vice President: Again, felt pretty good about the performance of our International business in the first quarter. I think looking forward, I do think it's going to get increasingly difficult in International, particularly as we move through the second half. And the reason for that is we are continuing to see a sequential slowdown in some of the emerging markets in our business and we've talked that for some time. And foreign currency headwinds, when we went into this year, we thought foreign currency headwinds would be about three point drag on top-line sales. If you just look at the U.S. dollar spot rates today, they're a bit worse than we have thought. And so that's certainly something we're watching closely and we're expecting a significant devaluation in Argentina. So, I do think the International business is probably going to continue to face a tough situation over the next couple of quarters, which is why again, what we're trying to do is focus on innovation in that business, focus on driving cost savings, leveraging our U.S. capabilities and really take targeted pricing where we can get it. And we think over the long-term, these things will not only rebuild margins, but position ourselves for even better healthier growth out of our International business. Olivia Tong - Bank of America Merrill Lynch: Right. Thanks, Steve.

We'll go next to Bill Schmitz with Deutsche Bank. William G. Schmitz - Deutsche Bank Securities, Inc.: Hey, guys, good morning. Benno O. Dorer - Chief Executive Officer: Hey, Bill. William G. Schmitz - Deutsche Bank Securities, Inc.: Hey. Was there any big distribution expansion this quarter that drove some of that organic growth or was it mostly comp store growth? Benno O. Dorer - Chief Executive Officer: No significant distribution expansion. Certainly we've gained distribution behind our innovations as we said, but nothing beyond that, Bill. William G. Schmitz - Deutsche Bank Securities, Inc.: Okay. Got you. And did you guys see that Wall Street Journal article about the guy running the U.S. was walking into stores and saw six different SKUs of ranch salad dressing. Is there something to read from that? I know it's random, but it sort of stood out at me that he picked on something so small in the big scheme of things for Walmart? Benno O. Dorer - Chief Executive Officer: We've certainly seen that, Bill. Again, our food business, our ranch business, is very strong, as I think you've seen it's very strong with Walmart, but also very strong with other customers. It should also be noted that our SKU productivity is higher than that of the competition so that might be relevant here too, which worked particularly well. Recently is – our innovation I think again that's something that Walmart has been so responsive to is innovation in the category to grow sales and grow profitably and the flavored ranches, in particular, chili, roasted garlic, avocado, cucumber have been very successful and we've gained more than 10 share points in that important segment over the last quarter. So, we're doubling down on investment in that, as well as in the other areas of ranch, as you know, food is a growth business for us and we'll continue to invest and we feel good about where we are. William G. Schmitz - Deutsche Bank Securities, Inc.: Okay. I mean the reason I ask is because it seems like you guys are very diffusive about this heightened competitive activity. My understanding is most of the discussions on pricing and planogram stuff for next year, at least the front half of next year, has already been done. So was there anything in these conversations that made you kind of put that in the press release a couple of times and then talk about it three or four times in the earnings call? Benno O. Dorer - Chief Executive Officer: No I mean, look – I feel like, what we've done is point out the strengths across the portfolio in food and elsewhere. Again, we've read that and you never like to be singled out in a comment like that, but what matters the most is what we're seeing every day in our consumption results and those are strong. And we've shared with you during the Analyst Day and perhaps also a little bit today about our continued strong plans for the ranch business going forward, mostly based on innovation and strong brand-building investments, so I feel good about that business and that's all there is to it. William G. Schmitz - Deutsche Bank Securities, Inc.: Okay, got you. And then just one quick one for Steve. So the gross debt to EBITDA is like 1.8 times. I think the net debt is more like 1.5 times. I mean are you going to revisit your target there, 2 times to 2.5 times? Is there stuff you can do to get that leverage ratio back into the comfort zone? Because it seems like also this quarter, puts and takes it was a seasonally weak cash flow quarter and you're still only at 1.8 times. So, my guess is as the year progresses, that cash flow balance is just going to get bigger – the cash balance is just going to get bigger and bigger. Stephen M. Robb - Chief Financial Officer & Executive Vice President: Yeah. It's a good problem to have. We're throwing off a lot of cash, obviously, as a company, certainly through fiscal 2015 and felt good about our cash flow generation in the first quarter and outlook for the full year. The debt-to-EBITDA is at 1.8 times, we're quite comfortable with it being below to 2 times to 2.5 times at this point because it does give us dry powder to be able to do things in the future, including M&A activity and return cash back to shareholders. So, no plans to change the target of 2 times to 2.5 times, but as we've said before, we're not concerned if it's a bit below that. I think over the long-term, we're either going to get traction in the M&A market and again we're always working on a pipeline of ideas, or if we start to see a lot of cash building up, we'll have to take a hard look at the dividend in partnership with the board, as well as just share buybacks and look for ways to get the money back to our shareholders. Again, the key for us is to be disciplined in capital allocation. So, no change in strategy or framework and we'll continue to monitor it and in partnership with the board, take a hard look at that over time. William G. Schmitz - Deutsche Bank Securities, Inc.: Okay. Great. Thanks, guys.

We'll go next to Chris Ferrara with Wells Fargo. Christopher Ferrara - Wells Fargo Securities LLC: Hey, thanks. Guys, I guess, a little more clarity on the increased competition. It sounds like you guys have spent on innovation, spent on trade promotion, gaining lots of share. And now it sounds like in anticipation of a response from your competitors to your success, you're planning even higher spending. So, in other words, from a position of strength. I just want to clarify, do I have that right? Again, I think you said you haven't seen any uptick, you're just spending more in anticipation of competitors spending more? Is that right? Benno O. Dorer - Chief Executive Officer: Yeah. So, as you know, Chris, increasing our spending has been part of our 2020 strategy and I think as we can see in this quarter's results, that's working very well. So, what we feel is prudent to do here in anticipation of what we do believe to be heightened competitive activity in these three categories is to stay in the driver's seat. We do not like to respond to competition, we do not like to respond after the fact. We like to anticipate and we like to continue to invest in what's working for us already and we see an opportunity in these three categories to continue to up our investment. That's all there is to it. It is about staying in the driver's seat. It's about staying on strategy and staying true to the promise of increasing our advertising and sales promotion investment and in some cases, trade promotion investment behind what's working. Christopher Ferrara - Wells Fargo Securities LLC: Perfect. Thank you. And just one last one on manufacturing logistics. Steve, can you just go through again, just give us an update on what's going on there, the impact of the trucking situation and the height of that, the general absolute drag you're seeing and what the prospects are for that over the next couple of quarters? Stephen M. Robb - Chief Financial Officer & Executive Vice President: Yeah. So we're continuing to see inflation in both manufacturing and logistics costs. This quarter came in at about 120 basis points, pretty consistent with what we've been seeing, which is north of about a point over time. And I would imagine that that's going to continue to be a drag on margins through this year and probably well into the future. I will say on the logistics side, while costs are elevated, they have appeared to have stabilized somewhat more recently. So we're cautiously optimistic that we may have seen the peak on this one, but keep in mind a lot of the inflationary pressures in manufacturing and logistics come from the emerging markets, where they're running double-digit rates of inflation. So, it's been a headwind. It's going to continue to be a headwind and that's why I think for us the key is going to be to really lean into the cost savings, the pricing and the other things that we can do to offset that headwind. Christopher Ferrara - Wells Fargo Securities LLC: Great. Thanks a lot.

We'll go next to Lauren Lieberman with Barclays. Lauren Rae Lieberman - Barclays Capital, Inc.: Thanks, good morning. We've covered a lot. I just had one quick question on something in the press release that you mentioned around the timing of customer collections impacting cash flow. Is that something specific to a retailer or something that should just kind of even itself out over the course of the year? Stephen M. Robb - Chief Financial Officer & Executive Vice President: In short, it will even itself out over the course of the year. It's really a reflection of the strength of the sales that we saw in the first quarter. And we have standard collection terms for all of our customers, and we saw a lot of strong shipments as we moved through the quarter and I would expect that to cash flow as we go through the second quarter. I guess what I'd have you know is that the free cash flow for the company as a percentage of sales, we think it'll be about 10% this year. And so we feel like we're off to a pretty good start to deliver another healthy year of cash flow for the investors. Lauren Rae Lieberman - Barclays Capital, Inc.: Okay, great. Thanks so much.

This concludes the question-and-answer session. Mr. Dorer, I would now like to turn the program back to you. Benno O. Dorer - Chief Executive Officer: Thank you. So to sum up, we're very pleased to have delivered strong first quarter results, reflecting our efforts to accelerate growth and doing so profitably. Our business is fundamentally healthy and our outlook presents a balanced view of the challenges and opportunities we see for our business in the rest of the fiscal year. Thank you for joining us today.

That concludes today's conference. We thank you for your participation.