Good morning ladies and gentlemen and welcome to the Church & Dwight Fourth Quarter and Year-End Quarter 2016 Earnings Conference Call. Before we begin, I've been asked to remind you that on this call, the company's management may make forward-looking statements regarding, among other things, the company's financial objectives and forecasts. These statements are subject to risks and uncertainties and other factors that are described in detail in the company's SEC filings. I would now like to introduce your host for today's call, Mr. Matt Farrell, Chief Executive Officer of Church & Dwight. Please go ahead, sir. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Thank you, operator. Okay, welcome everybody and everybody that's joining online. We have the whole management team here with us today. We appreciate the opportunity to tell the Church & Dwight story. I'm going to provide some color on five of our categories. I'm going to talk about our 2017 innovation and consumer insights that led to that innovation. If you read the press release, you know we closed a couple of bolt-on acquisitions recently. So, I say a few words about that. Rick is going to get up and give us the thinking on 2017 and then we'll have Q&A with the whole management team. Okay. Here's the safe harbor statement, which I encourage everybody to read and let's just jump right in. So, for those of us who know us, or know the story, but if you're new to the story, we started in 1846 with ARM & HAMMER baking soda. Today we're a $3.5 billion diversified company with dozens of brands and we do on the slide – too fast. Here we go. Okay. We have 10 brands, we're a little bit out of sequence there. We have 10 brands…

Can you guys bridge the organic growth and that negative 1% Nielsen to the roughly 3% in the consumer domestic business you did? Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. I used to masquerade as the finance guy. So, I'm going to...

I remember, yeah. Matthew T. Farrell - Church & Dwight Co., Inc.: ...let the finance guy do that. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. I think I might – yeah, no problem. So, you'll see there in the Nielsen data for example, before we paid out, has been relatively weak and that's really track channels. So, we were slightly negative in track channels. We said in the release though about – if you think about it, we're slightly negative in track channels, but we're 2.8% organic from the consumer domestic division. And we said that that entire delta can be really explained by two things, about 300 basis points in total, about half in club and about half in the online channels. So, I would say that trend's probably going to continue. It's not going to get better over time, so that disconnect is going to be there.

Okay. So, why isn't it like going into the first quarter, do you know what I mean because those trends, it seems like the club stuff is distribution more than growth, yeah, or is it growth have been club – do you know what I'm saying, like obviously, the e-commerce piece also should continue to grow. But I know that comp's a lot harder in the first quarter, but you'd think those trends would... Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. I think you hit it on the head, Bill. I think if anything, that the comp is overwhelming any trends that we're going to see in Q1, right. To be comping a 5% organic or 6% even household business growth in Q1 is going to be very difficult. But, so with all that said, we're going to have better growth than is in track channels, but the comp in Q1 just is very high, so our outlook is 1% to 2% Q1.

Okay. And then what percentage of sales is e-commerce now? Richard A. Dierker - Church & Dwight Co., Inc.: We've just said in the past, we're right in line with the 1% to 3%. So it's growing very quickly.

Yeah. Richard A. Dierker - Church & Dwight Co., Inc.: But that's probably the.... Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. We're right in the middle, around 2%.

Okay. And do you have big... Matthew T. Farrell - Church & Dwight Co., Inc.: Hey, hey.

What's that? Matthew T. Farrell - Church & Dwight Co., Inc.: We have a field of people.

I'm sorry. Matthew T. Farrell - Church & Dwight Co., Inc.: You're on number four. Let's get the other Bill.

Yeah. Just on the laundry section, can you maybe, now over four or five months since the Henkel-Sun merger. Kind of thoughts of is this going to be good for the category in 2017, do you think it's good for the category in the long run, do you not have an idea at this point? Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. That's a crystal ball question. So it's fair to say that when a large company buys another pretty good-sized company, a lot of their plans are already in place. So whatever Sun had in place for Q3, Q4, maybe even for 2017 is already in place. So, we don't really know – there's no evidence that says there's some obvious change in tactics because it's been going on for a few months. So here, we have to wait and see. There's one camp that says okay, you book, you get very promotional. The other camp would say, hey, people are going to be rational and it will be great for the category. So, we need a few quarters to figure that out and I'm sure it's going to be a question from everybody in Q1 and Q2, what's going on in the laundry. But as Rick points out, the comps, back to Bill's question, we have a 1% to 2% number in Q1 because our biggest quarter last year, we posted over a 5% organic number last year Q1, so that's a tough one to comp.

And just related to that, I mean, I didn't – I may have missed the thoughts of how you turnaround XTRA, that didn't seem to like there's any innovation, it's a price value-type position and that seems to be the one that's probably hit most by Sun. Are you optimistic you can turnaround this year and how do we do that? Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah – no, you're absolutely right. So, XTRA has lost share for three years in a row. As I pointed out, in 2016 XTRA grew our profit, so, and we haven't spent. So if you look at what we spent on a full-year basis for XTRA, we're around 37%, 38% sold on deal where it was simply tied and Sun 40% plus. So the question is, okay, you got to get into the game now to try to offset that because it's not indeed value, it's not really an innovation story, it's more of a price story. Yeah, Kevin. Only Kevin that we have.

Thanks. Two questions if I may. So, Matt, can you comment on balancing a bit the market share performance, you guys lost market share in six of your largest 10 brands. Matthew T. Farrell - Church & Dwight Co., Inc.: In measured channels.

I'm sorry – in measured channel, in measured channel. With the advertising marketing relatively flat, I know it's sort of consistent with your evergreen target. Does that lend itself, the market share dynamic, to the argument that maybe advertising marketing needs to step up a bit to stem some of these losses, if not gain share and then I have a follow-up question. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. Well, I'm going to give you a couple of opening remarks and then I'm going to ask our CMO to comment. I'm may say what she's going to say. So, marketing is 12%-plus of your revenue, so it's a pot, you have to decide how you're going to deploy it. So you're going to move things around from one brand to the other. Now, some brands have tremendous equity and they can withstand having less spend on them in a given year and then you move the chips over to another brand. So, we will have to deploy it smartly so that we're going to get the right effect. And some of that measured channel versus unmeasured channel stuff we're pretty relaxed about, because we know, we see the numbers and everybody can't see it. It's going to create greater unease going forward, I think, if you're an investor and analyst to try to see what's going on in unmeasured channels, but I'll let Britta comment on that. Britta Bomhard - Church & Dwight Co., Inc.: Sure, sir. Just building on what Matt said, I think we have different reactions in different categories of advertising, so what you will see, Slide is very obvious, great innovation, you can see it, so advertising will drive a change very quickly, whereas other categories where advertising is constant, you can't see that change as quickly. I think we're very confident that the advertising we have or the communication we have is driving different categories. Then if you look at the overall, there's many, how would I say, noise overlaying it. We talked about laundry and the promotional effect overlaying the noise or we talked about TROJAN, that shift in channels is actually overlaying the true brand performance. So we look at it holistically across all the channels we have. Matthew T. Farrell - Church & Dwight Co., Inc.: A follow-up, Kevin. Another one?

I'm sorry? Matthew T. Farrell - Church & Dwight Co., Inc.: Another one.

Yeah. Sorry, Matt. Just a follow-up as, just to stick with online for a second, maybe talk a little bit about some of the opportunities, and maybe some of the risks you've seen in other categories whether it's – like blades, wet shave, some personal care categories like beauty where sort of have been demonstrated that the barriers to entry are a bit lower and there's been some risk to the incumbents. So, talk about how you guys are sort of looking at that. Britta, if you could chime in too particularly like in contraceptives as an example, to some of these categories that lend themselves a bit more to online? Thanks. Britta Bomhard - Church & Dwight Co., Inc.: Sure. So I would say categories are very, very different, so lower barriers to entry in beauty for example and cosmetics, yeah, or in skin care, if you look at our categories like condoms needs trust, yes, so we've seen across the world plenty of small condom pop-ups, right. None of them has stuck really anywhere in the world, because this is a category where long-term trust in the brand is absolutely essential. Other categories I would talk about, it's a huge opportunity for us actually online because there are categories where you don't really feel comfortable if you go in the store and purchase them. So, we have a brand, for example, Replens/RepHresh, yeah. You don't really want to be seen with a basket and saying I have personal odor. So, these categories were doing extremely well online, so I think the hard one is you have to differentiate on online very closely, think about what the consumer wants and what they're looking for. So, I personally see it as a huge opportunity for us. I'm not really worried. I don't see it as a threat or disruptive. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Joe?

Thanks. First question I guess in terms of this move from tracked and non-tracked channels, what's the margin delta between your businesses in those two different channels. And then, secondly, on the acquisitions, it looks like you're paying roughly 4 times trailing revenue, call it 14 times EBITDA. For businesses that are in smaller categories, what's the goal there, is it geographic expansion for those two acquisitions you announced this morning? Matthew T. Farrell - Church & Dwight Co., Inc.: Yes. So, when we look at online contribution versus bricks-and-mortar contribution, we're looking at the basket, because some are actually going to have better margins online, some are going to have worse. But in total portfolio, they're about equivalent. We're not seeing an erosion from our online business. Your other question was on multiples?

Yeah. It looks like you paid a pretty hefty multiple for some of these acquisitions, I'm curious what the growth opportunity is. Richard A. Dierker - Church & Dwight Co., Inc.: Yes, so we spent $290 million on those two. I'd tell you, what we paid was a little sub-12 and we think synergies is sub-10. So we think it's still a great deal whether it's international, domestic, wherever it would be. And I think – by the way, we also get some more scale for some key countries internationally, but I'd say it met all of our financial criteria. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Jason?

Okay. So, I have two questions. One, just on international. Obviously, years ago really didn't get that much of a discussion, now we talk a little bit more about it. So you're talking about some of the investments you're making there, maybe just to dovetail on Joe's question just about the acquisitions there, how should we be thinking, what percentage of sales if you think 5 years, 10 years down the road, will international be part of the story? And then the second question, I guess, so really wanted to talk about the gross margin guidance and the promotional and the commodity, maybe if you can flesh that out a little bit. The comfort level that you have in case the promotional environment does get worse, 60 basis points does seem a lot for a CPG company just in this environment. So I'm just, I know you lean on the productivity, but can you just maybe put a little more color behind that? Matthew T. Farrell - Church & Dwight Co., Inc.: Okay, well. We have the good fortune of having the head of our international business with this here today, so I'm going to let Steve take a swing at your question. Steven P. Cugine - Church & Dwight Co., Inc.: Thank you. So at Church & Dwight, we really haven't focused that intently in international expansion. Several years ago when Matt asked me to come in, I really viewed international as a wonderful opportunity to be a growth engine, just another piece of our growth strategy long-term. So we do feel that international represents a significant growth opportunity for us, we're making investments and Matt alluded to two new sales and marketing offices that we just opened this year, one in Panama to service Latin America and one…

Thank you. I have to follow tradition and ask two questions. Could you dive into the leaning on online margins because I thought it was really fascinating, most companies are up, they're saying they make more online? Matthew T. Farrell - Church & Dwight Co., Inc.: In some categories.

But they, you start to wonder if you factor in all the investments in digital and the human resources you have to apply them in, I just want to understand a little bit more about that? Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. There's some truth in the fact that digital advertising is more efficient. We went through that example with litter. So instead of bombing away with TV advertising, you get to affect, to reach everybody. You're only going after the cat owners, so there are efficiencies in the advertising side, and – remember, that's going to be 12% of your sales. So you can be more efficient there, if I'm just going to improve your margins. Heavy things don't travel well. So when you think about online, so heavy things like a laundry detergent, litter, those are categories where you're going to be more challenged to have the same margins as you have in store, but then if you have some personal care brands on the other side, you're going to make more money than you do in retail. It is a balance. Matthew T. Farrell - Church & Dwight Co., Inc.: Right. So net-net, our online margins are at or above company average because of the personal care mix, right. So that's – we've said that the last few quarters and that's still the truth.

Okay. And then the other one is just how do you get the operating leverage that you look for when you buy overseas because you just don't have the scale you have here, not that you're the biggest company here, but in a way opening the offices in Singapore, and so how do you also get margin expansion while you're doing that? Matthew T. Farrell - Church & Dwight Co., Inc.: When you acquire a business, you mean? Well, when you acquire, the interesting thing about acquiring a business is you're buying marketing contribution. So essentially it's gross profit minus marketing. So we don't add a whole lot of SG&A when you're buying a business. So, right off the bat if you can get leverage on what you bought, you're going to improve the operating margins of the business, so. It's something that – all this SG&A doesn't come with it when we acquire a business. So we have to acquire smart, so you have to buy where you have some infrastructure in different countries, particularly internationally. So that limits us a little bit more. It's hard for us to buy a business in a country we're not in and not bringing the SG&A. And then some of the math starts to fall down because we're oriented towards cash, how much cash the business throws off. I hope that helps you. Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. And the only thing is what Matt told you before, that small ANUSOL deal for example 80%, 90% of those volumes are going through Canada, we have sub Europe, right and Australia. So we feel like we do have a platform to leverage there. Those headquarters are really the jumping off point for regions, right. That's just a few SG&A heads and that's really the jumping off point for future expansion. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. How are you?

Just sticking with international, I was still curious about the portfolio cohesiveness question, right. You talked about the financial attributes and I know that even domestically, right, the business has its chunks of businesses that don't necessarily have the most traditional strategic cohesion across the board and you've done wonderfully well with that. But you did it in one country, right? So to try to build an international business which is whatever it is, six or seven countries with a sort of feeling a little bit scattershot brand portfolio. I'm just curious if strategic fit is part of it beyond the financial attributes and the ability to leverage your infrastructure and so on? Thanks. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. That sounds like an indictment, so I think, Steve is ready for that beach ball. Steven P. Cugine - Church & Dwight Co., Inc.: Sure, not a problem. It's a great question. Many of these international subsidiaries, the countries that Matt puts on the chart were acquired, right. When we did other acquisitions, Carter-Wallace has been the primary one and it had some cats and dogs for sure. So, three years ago, what we decided to do is to make this an engine of growth. We had to have a strategy. Both what markets, what brands, what capabilities and where from an acquisition standpoint we would like to go. So, what we did is we identified key brands that we knew we could grow in international markets, right? That's one. Two is, we have a North America focus, so we take the capabilities that the U.S. has and we extend them north, Canada, south into Mexico, so you saw Mexico, fabulous performance. We expect that to continue to grow, the biggest brand growing the fastest is…

That's great. That's really helpful. Thank you. Matthew T. Farrell - Church & Dwight Co., Inc.: Olivia?

Thank you. First question on laundry, we didn't really talk a lot about liquid laundry detergent, it's been a while since we've seen something in terms of innovation there and it's still a much larger category than unit dose despite the growth there. So I was just wondering if you can give it a little bit more color on that? And then back to international, clearly the growth has been phenomenal there, but for 2017, you're looking for growth about half the level what you achieved in 2016. So can you sort of bridge that gap a little bit, realizing that of course it's tough to expect double-digit growth in perpetuity? Thank you. Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. The liquid laundry category, you're right. There isn't a lot of innovation in liquid laundry, so it's more of a brand story and brand equity, so all the growth has been driven by unit dose over time. I think that's going to continue in the future, so it's – no expectation, there was an expectation actually at one point there'll be further compaction in liquid laundry that clearly is not obvious today. Once upon a time, it was believed in 2017, liquid laundry will be compacted again because Wal-Mart announced that years ago. That is not on the radar screen right now. So, with respect to liquid laundry, it's more of a brand story. I'll ask Britta or Lou, if they want to add anything on liquid laundry detergent? You want to add to that? Louis H. Tursi - Church & Dwight Co., Inc.: The only thing that I would add to that would be that over the years, we have launched a lot in laundry detergent, and some of those sub-segments have done better than others.…

I'm actually going to build on both of those questions. On the laundry side, your main competitors are – speaking of branding and marketing, are branding a lot right now, right. Both of them in the Super Bowl with various properties. So it sounds like you're going to go to market in liquid with basically your current portfolio, is that a big area of focus for stepped-up marketing next year or – is – what's the strategy in liquid as your competitors do a lot? Matthew T. Farrell - Church & Dwight Co., Inc.: Yeah. There's no way we would – we'd go through our laundry strategy today for 2017. Is that what you're asking?

So, I guess, yes. There's no real incremental news that you're.... Britta Bomhard - Church & Dwight Co., Inc.: Maybe I can help.

Yeah. Britta Bomhard - Church & Dwight Co., Inc.: Maybe I can help a little bit. So, first of all, Super Bowl, I think – I want to be very clear, I think it's a great PR for most of them, but value. We are value-driven. We are very clear now on our metrics where we invest, and where we don't invest. So I think that's my number one to say about Super Bowl ads, right. We all enjoy watching them, but if you think about it you want to reach consumers at affordable cost, they're not the greatest. Secondly, I want to say, laundry, I mean, strip out a little bit of the noise, how much innovation has really been in liquid laundry over the last couple of years. You get a new flavor and a new flavor gets promoted and then it drops off again. And that's true for many of our competitors and I think we're making a decision to be much more clear that this is the area where consumers are not looking for something new every single time. They want good great performing products at a great value and that's what we are driving, what we have been driving. And just to come back to our shares, I think that's the secret formula of ARM & HAMMER and we've proven even in 2016 with all that kind of laundry battle going on, that ARM & HAMMER was a big winner. So, I think that's just to put it in context and distract a little bit of the noise around.

Okay. Fair enough. And then on international, just trying to get a sense of it sounds like, it feels like it's an increased priority. When it comes to M&A, is the financial bar higher or lower internationally versus domestic? Matthew T. Farrell - Church & Dwight Co., Inc.: No. it's not lower. The financial bar is universal, whether it's international or domestic and the businesses we just bought have cleared those hurdles.

Okay. Matthew T. Farrell - Church & Dwight Co., Inc.: So, there's no relaxation on our standards.

Okay. Thanks. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Jason? Jason English - Goldman Sachs & Co.: Thank you for the question and congratulations again on a strong finish to the year. A couple of quick questions. First, kind of housekeeping on the stock options accounting change. If you look at your 10-K filing for last year, it would have been around a $0.14 benefit, the year before $0.06, the year before $0.07, why only $0.03 benefit as we look into next year and I guess what I'm getting is, is there a degree of conservatism embedded in that? Richard A. Dierker - Church & Dwight Co., Inc.: Yeah. I'd probably answer that a couple of different ways. So, quantitatively, you're right. It's a bigger benefit if you take 2016, our math has a dime, $0.10 if it was 2016. If you take the five-year average, it's a nickel. If we take Q4, annualize it, zero, right? So, it all depends on how the stock price moves and it's kind of a circular relationship. So, you can't have a low target price and high expectations stock option exercises, right? It just doesn't work in the modeling. So, that's on the stock option exercises. So net-net, $0.03, about $1.8 million of stock option exercises is our expectation. That could change, right? And we've seen our peer group, a lot of volatility, you guys see it even more than I do, right, people have raised and lowered multiple times already on this new accounting standard and so we're trying to take the noise out of it and if – hey, if it's worth it we're going to – we'll raise the number, we're going to be really clear about it. Jason English - Goldman Sachs & Co.: I appreciate…

Thanks. I have a general question on pricing and your ability and willingness to pull the pricing lever in 2017 especially given the heightened competitive environment. That would be first. And then second, your price mix internationally during the quarter deteriorated sequentially. So if you could touch on that as well as in terms of your ability to do it internationally, thinking about rising or increasing FX headwinds? Matthew T. Farrell - Church & Dwight Co., Inc.: When you say the price lever in 2017, you're saying our ability to raise price? Yeah. Okay, well, as far as raising prices goes, typically the categories you may be able to do that are categories where you're most dominant. So, say, baking soda, you have a 75%-plus share. Condoms, you have a 75%-plus share. But if you don't have that kind of leverage it's more difficult, number one. Number two is you need to have the support of the commodity cost rising. So, there are a lot of retailers, we will be able to pull the lever if you can support it with input costs which of course we have, but it remains to be seen if we can pass that on in 2017. A lot of retailers are very reluctant to take price as you probably know. What's your second part of your question?

Just the same concept internationally, because in the fourth quarter price mix deteriorated sequentially, so just thinking about it internationally as well as you think about your mix? Richard A. Dierker - Church & Dwight Co., Inc.: If anything it's probably just mix rather than in terms of country, right. If Canada's doing better, it's more of a household-type product, that's probably more than anything. I wouldn't read into it. Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Anybody else before we wrap it up here? Matthew T. Farrell - Church & Dwight Co., Inc.: Okay. Well, thanks you all for coming today. Thanks for joining online, as I said super fourth quarter and optimistic about 2017. Thank you.