Good day, ladies and gentlemen, and welcome to the Campbell Soup third quarter 2015 earnings call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, today's conference call is being recorded. I would now like to turn the conference over to Jennifer Driscoll, Vice President, Investor Relations. Please go ahead.

Thank you, Candice, and good morning, everyone. Welcome to the third quarter earnings call for Campbell Soup's fiscal 2015. With me here in New Jersey are Denise Morrison, President and CEO; Anthony DiSilvestro, CFO; and Anna Choi, Senior Manager of Investor Relations. As usual, we've created slides to accompany our earnings presentation. You will find the slides posted on our website this morning at investor.campbellsoupcompany.com. The call is open to the media who participate in listen-only mode. Today, we'll be making forward-looking statements, which reflect our current expectations. These statements rely on assumptions and estimates, which could be inaccurate and are subject to risk. Please refer to slide two in our presentation, or to our SEC filings for a list of the factors that could cause our actual results to vary materially from those anticipated in any forward-looking statements. In the third quarter, the company incurred charges associated with our recently announced initiatives to implement a new enterprise design that better aligns with our strategy, reduces cost and streamlines organizational structure. The company commenced a voluntary separation program and recorded pre-tax restructuring charges of $9 million related to the program for severance and benefit related costs. The company also recorded pre-tax charges of $9 million in administrative expenses related to the implementation of these initiatives. The aggregate after tax impact of the restructuring charges and implementation cost was $11 million or $0.04 per share. Our comparisons of fiscal 2015 with 2014 will exclude those items impacting comparability. Because we used non-GAAP measures, we've provided a reconciliation of these measures to the most directly comparable GAAP measure, which is included in our appendix. Before we begin our discussion of the quarter, I'd like to cordially invite our sell-side analysts and institutional investors to our annual investor day at Campbell's World Headquarters.…

Thanks Anthony and Denise. We'll start our Q&A session. Since we have a limited time, out of fairness to other callers please ask only one question at a time.

And our first question comes from Robert Moskow of Credit Suisse. Your line is now open. Robert B. Moskow - Credit Suisse Securities (USA) LLC (Broker): Hi, thank you. I had a question about...

Hi. Robert B. Moskow - Credit Suisse Securities (USA) LLC (Broker): Good morning. I had a question about the promotional spending cuts. Do you think that that could extend into fiscal 2016 as well? How much additional discipline do you expect to use in the soup franchise and others? And then just a quick one on Global Snacking. Denise, you have talked about Global Snacking for a while. But Arnott's and Pepperidge Farm, they are different brand names, the packaging is different, there's not a lot of crossover – that I see anyway in terms of products that are similar. Is there additional kinds of synergies that you could see between the regions that they haven't been capturing yet? Thanks. Denise M. Morrison - President, Chief Executive Officer & Director: Okay. Let me take the first one on the trade spending. I want to go back in particularly to U.S. soup. And I'm going to go back to the year 2013, where we actually increased our – we were actually operating our trade at a certain rate, and we had a 14% lift in sales. In 2014, we increased that by about 3%, and our sales were flat. So our analytics suggested that that was not a good spend, and there were many unproductive promotions out there that weren't doing the retailer any good, or us any good. So we course-corrected that in 2015 in the quarter, and went back to the same rate we were spending in 2013. We are still within the ACT of 25%, which is our goal, and that strategy really hasn't changed. But that said, we continue to be much more disciplined in our analytics on every dollar we're spending out there and the return we're getting for that and that will continue into the…

Next question.

Thank you, and our next question comes from Andrew Lazar of Barclays. Your line is now open.

Good morning, everybody.

Hello, Andrew.

Hi, I realize you – with respect to gross margin I guess you kept the gross margin guidance for the full year the same as previously, even though the fiscal 3Q gross margin came in what seems like better than you and many investors had expected. So, I'm just trying to get a sense of – is there something that you see in the fourth quarter, albeit it's a seasonally small quarter, that would suggest gross margin steps back a bit or something doesn't come through quite as significantly? Or is it just – it's a small quarter and see how it plays out? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, Andrew, I would say, relative to our own expectations, gross margin was only slightly better than we expected in the third quarter, and that's kind of flown through to the change in guidance. At the end of the second quarter, we did anticipate and did expect to improve gross margin percentage in both the third quarter and the fourth quarter. So, we do continue to anticipate a modest improvement in gross margin percentage in the fourth quarter as well, to get back to that, close to that minus 1 point forecast that we gave you guys.

Got it. And Anthony, are inventories at a point where they're sort of artificially low, such that shipments outpace consumption going forward into next fiscal year? Or are we just at a new ongoing level of inventory that now maintains from here? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: That's a really challenging question to answer. Obviously, we don't control the level of retailer inventory levels. We do see that they're down relative to last year. And I would say, if they follow their typical pattern and get close to where they were at the end of the fourth quarter last year that would imply some tailwind for us on soup sales in the fourth quarter. But, again, that one is really hard for us to project.

Understood. Thank you.

Thank you. And our next question comes from Chris Growe of Stifel. Your line is now open. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Good morning.

Hi, Chris. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: I just have a question for you, a bit of a follow-on to Rob's question if I could, which is (36:05) keeping total spending (36:12)

Yeah, Chris? I'm sorry. Chris, you're really cutting out. Do you have a hand set you could use? Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: I'm on a hand set, so maybe I'll requeue. Is this any better?

It still sounds – you're in and out. Could you call back in and we'll put you back in, maybe after the next one? Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Sure. Thank you.

Operator, can you make sure that happens?

Yes. Thank you. And our next question will come from Matthew Grainger of Morgan Stanley. Your line is now open. Matthew C. Grainger - Morgan Stanley & Co. LLC: Hi. Good morning, everyone.

Hello, Matt. Matthew C. Grainger - Morgan Stanley & Co. LLC: Hi. I'll apologize in advance to Chris if I front run his question; that wasn't my intention. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Thank you. Matthew C. Grainger - Morgan Stanley & Co. LLC: But I wanted to ask about promotion too. I guess, Anthony and Denise, I appreciate some of the progress you made during the quarter on gross margin. But it also feels like we have gone from one extreme to the other extreme, with gross margins stronger on lower promotion and higher pricing, but also unwinding a lot of the progress that it felt like you were making on volumes and inciting some inventory reduction by retailers. So I guess, I think you touched on elasticity being roughly in line. But is this really the type of volume response you expected to these promotional changes? And if so, do you feel that this is the right balance going forward? Denise M. Morrison - President, Chief Executive Officer & Director: Yes, Matt, I think that what we've been paying very close attention to is consumption and market share. And to give you some idea of that, our consumption was down 1% for the quarter. Condensed was down 1%. RTS was down 2%. RTS Premium was up 28%. Slow Kettle was up 50%. And so, we're continuing to see stability in the category, and in our performance in the category. So that's what we've been paying attention to, as opposed to excess inventory driven by promotion spending, or the latter effect. Matthew C. Grainger - Morgan Stanley & Co. LLC: Okay. So there's nothing in the reaction to the promotional changes here in Q3 that you feel a need to change – tweak…

Have we got Chris back?

And we do have Chris Growe. Your line is now open. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Okay, how does this sound?

Much better. Thank you. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: I wish I could say was calling from a beach somewhere, but I am unfortunately in my office here. I just had a quick question; it was a bit of a follow-on to Rob's question earlier, and forgive me if you answered this. I may have missed it. As you have reduced promotional spending but kept your overall marketing and promotional spending, that pressure on the consumer, it would imply that more money is going behind advertising. Is that right? Or should that overall kind of 25% of sales start to come down as you get more efficient with your trade spending? Denise M. Morrison - President, Chief Executive Officer & Director: The 25% ACT is about the average in CPG. So we keep that as a guardrail. But the divisions will work with all the drivers of demand to figure the right mix for the brands that they are responsible for. In this quarter, we actually did have an increase in advertising by about 8%. With 11% in constant currency dollars. But that mostly went toward the Biscuit and Snacks business in both the United States and in Australia. There was a reduction in advertising and consumer in the Simple Meals business. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Okay. Does that advertising increase then more than make up for the decline in trade spending? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: No. Total marketing, advertising, consumer and trade is down a bit in aggregate, compared to last year. Christopher R. Growe - Stifel, Nicolaus & Co., Inc.: Okay. If I could just ask one other follow-up as well, just in relation to the new product contribution, I know you…

Thank you, and our next question comes from Bryan Spillane of Bank of America. Your line is now open.

Hi, Bryan.

Hi, good morning, everyone. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Hey, Bryan.

A question about U.S. Beverages. In this quarter, sales were only down modestly I guess year-over-year, and you had pretty good profit contribution. I understand I guess part of that is just the marketing expense was lower. But are we closer to the point now where you feel like you've got that business stabilized? Or is that just too much of a read into this quarter? Denise M. Morrison - President, Chief Executive Officer & Director: I mean, I call them green shoots. Not waving the victory flag yet. But we are again seeing really positive signs from the new V8 Veggie Blends, and the impact that's having on our vegetable juice. Our Splash business is strong. Our single-serve business did pretty well in the quarter. Where we've been hit is the V8 V-Fusion, and we're just dealing with that one.

Thank you. And then just one follow-up, and maybe I'm not following this correctly. But it sounds like retailers didn't buy as much soup as you thought they would have; yet the takeaway was a little bit better even in response to the promotional level. So did retailers not buy enough soup? Like would you have sold more soup if retailers had bought more? Or is that not the right way to read it? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: No, I wouldn't read it that way. I think your first part of your question was right, is that the consumption has held up better than we expected, but the change in retailer inventory levels was more than we expected.

Okay. Thank you. Have a great holiday. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: You too.

Thanks. You too.

Thank you. And our next question comes from Eric Katzman of Deutsche Bank. Your line is now open.

Hi, Eric.

Hi, good morning, everybody. I have maybe a little bit of a longer-term question, then a short-term question. Why don't we deal with the latter first, the short-term? Anthony, the corporate expense line was a lot lower than we had expected. Is that a function entirely of the incentive comp, or is there other stuff going on there? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: When you say the corporate line, unallocated corporate?

Yeah, exactly, within the segments. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, I think what we're seeing is a relatively big benefit from our cost management efforts, so earlier in the year, we had put some restrictions on hiring. We had put some restrictions on discretionary spending, and then later in the year we started our $200 million cost reduction initiative and we're seeing some early benefit from that, but I think you put those two things together and we're doing a bit better on the cost management side. A lot of that's coming through the G&A line. Some of it's coming through marketing overhead and we're just seeing a little bit, doing a little bit better on the cost side than we had originally anticipated.

Okay. And then, Denise, I guess the longer-term question is, at CAGNY you told us that in simple meals you are going to more of a relative top-line approach. And in listening to your explanations today and certainly over the last couple of years, there has been new product efforts and promotion, and sometimes it's worked and sometimes it hasn't, and that's kind of swung things around both from a sales to gross margin to profit standpoint. And so as you implement kind of more of the simple meals or relative top-line approach and combine with ZBB, I mean, do you basically anticipate that division sales kind of being flat to down and profit up as promotion is just less volatile and arguably less of a negative? Maybe you can give us some initial thoughts there, and I'll pass it off. Thanks. Denise M. Morrison - President, Chief Executive Officer & Director: Yeah, I think it is fair to say that the – a couple years ago, the simple meals business was in a hole, and we've gotten to the point where we've gotten stability in consumption and market share over the past two years. Now we've got to get to profitable growth. That said, that's going to be moderate, based on where that category is, and where it plays today. We do anticipate margin expansion in that division as well, so that's the portfolio role that Americas Simple Meals and Beverages will play.

All right. Thanks. Have a good weekend. Denise M. Morrison - President, Chief Executive Officer & Director: You too.

Thank you, and our next question comes from John Baumgartner of Wells Fargo. Your line is now open.

Thanks; good morning. Denise M. Morrison - President, Chief Executive Officer & Director: Good morning, John.

Denise, just wanted to come back to the beverages side for a minute. You have been out some time now with the independent distributor model for the instant consumables. Just wondering how that is evolving for you in terms of distributor performance, opportunities to rationalize or consolidate some distributors; and just what you are seeing in terms of the returns there overall. Denise M. Morrison - President, Chief Executive Officer & Director: Are you talking about the immediate consumption business?

Yes. Denise M. Morrison - President, Chief Executive Officer & Director: Okay. Yeah, we – when we moved away from the Coke distribution system, we created a network of distributors that could cover the United States that was largely DSD. Some of that worked, and some of it didn't. We course-corrected, and added some broadline distributors to that network, and that's working much better today. In addition, we had our Foodservice sales force responsible for managing those distributors. We have since moved the sales effort to our retail sales force, to not only motivate the distributors from a supply standpoint but also to have end-user customer coverage to create demand, and we've also supplemented that with some broker support for store work. So we believe with this more push-pull model, we set ourselves up for better results. Finally, we are introducing more products in the range that distributors have to work with. In the past, they had V8 Red Juice. They had a couple SKUs of Splash and a little bit of V8 V-Fusion. Today they have that plus the V8 Veggie Blends in single-serve, V8 energy and we have a pipeline of new products as well, so we're very committed to immediate consumption. It's only 10% of our business today and we know in a lot of beverage companies it's 50%, and very profitable. So this is worth building and being patient and doing it the right way?

Thanks, Denise.

Thank you. And our next question comes from Akshay Jagdale of KeyBanc. Your line is now open.

Good morning. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Hi, Akshay.

Hi, Akshay.

Hi. My question is on your recent acquisitions, Bolthouse and Plum Organics. If you just take a step back and – I would love to get an update on where those businesses are relative to when you bought them, and what your expectations were. On Plum Organics, Kroger at a recent conference was raving about it. I know it is relatively small as a percentage of your overall sales, but seems like that one after some initial issues has really taken off. So if you could give us an update on both of those, greatly appreciate it. Thank you. Denise M. Morrison - President, Chief Executive Officer & Director: Yes. I think overall we're very pleased with our acquisitions of Bolthouse Farms and Plum Organics. We bought both of them to drive growth, and they are delivering the growth. Bolthouse Farms gets us into the Packaged Fresh category, where we can continue to build and bring new capabilities to that space. They have a great team, and Plum Organics, also a great team, is a window to millennial parents, and has taught us a lot about organic food, and really different ways of connecting with the next generation of consumers. So from a strategic standpoint and a performance standpoint, we're very pleased with both of these acquisitions. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, if I can just add to that to give a slightly, the other side, is we've seen a little bit of margin pressure in some of these businesses, and are taking actions as you can see. In Bolthouse Farms there's been a little more trade pressure and this quarter we did dial back on trade to improve the profitability, so it's been a little bit of pressure on the margin there. And in Plum, we're going through a more extensive integration of some of the back and front-office operations to improve the profitability of that business going forward, as well.

Okay, thank you. I'll pass it on.

Thank you. And our next question comes from Alexia Howard of Bernstein. Your line is now open. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Good morning, everyone.

Hi, Alexia. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Hi, Alexia. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Good morning. Okay, just one quick data question and then another one. You mentioned that the shelf space allocated to premium products had gone up by about 4 feet. I'm assuming that's some sort of weighted average distribution metric? Is some of the inventory reduction a reduction in shelf space on your more mainstream brands? And if so, how much is that reduction? And then just on the promotions, there have been a lot of discussions on this call. Do you have view as to why the promotional spending has become less effective over the last few quarters or so? Thank you very much, and I'll pass it on. Denise M. Morrison - President, Chief Executive Officer & Director: Okay. We have not had reports of reduction of shelf space on our mainstream brands. We really believe that the inventory movements that we've talked about were movements in warehouse inventory due to buying less cases because of a reduction in promotion spending. And then, on the second part of the question. One of the things we experienced in the quarter was, we were cycling the relaunch of Campbell's Homestyle RTS, where we had a huge ACT spend against that brand, and obviously we did not repeat those levels of spending this time around. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, I think it's important on the promotional spending, if you step back, in aggregate, we spend somewhere around $1.5 billion on trade promotion in a year. Overall, we feel that it's an effective spend and that we're getting a return. When we talk about the changes, we're talking about this $50 million reduction. Again, it's $1.5 billion. So, we're at the edges of it and we continued to try to improve the effectiveness of that spend. We drive our analytics to look for opportunities to reduce unprofitable trade deals. We look for opportunities to increase the effectiveness of trade deals. We look for opportunities to increase the promoted prices over time. So I think we're talking about relatively minor refinements to the overall bigger program. Denise M. Morrison - President, Chief Executive Officer & Director: Yeah, year-to-date, our trade spend is down a point. Alexia Jane Howard - Sanford C. Bernstein & Co. LLC: Great. Thank you very much. I'll pass it on. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Sure.

Okay.

Thank you. And our next question comes from Jason English of Goldman Sachs. Your line is now open. Jason M. English - Goldman Sachs & Co.: Hi, good morning.

Hi, Jason. Jason M. English - Goldman Sachs & Co.: Hey, good morning. Hi, guys. Thank you for letting me to ask a question. I wanted to follow up on Alexia's question, because your answer surprised me. You said you haven't lost shelf space on your legacy products, but you have gained 4 feet on premium soups. Have you really gained 4 feet on average of shelf space for soup at retail? Denise M. Morrison - President, Chief Executive Officer & Director: That's what our figures show us. I mean, we track this very, very closely, and that's the feedback. Jason M. English - Goldman Sachs & Co.: What we are seeing in terms of retail data is pretty sharp velocity declines on a sales per TDP or gross distribution point metric, sort of high single digit, low double digit. How sticky do you think that shelf space is? Denise M. Morrison - President, Chief Executive Officer & Director: I'm not sure what data you're looking at. Jason M. English - Goldman Sachs & Co.: Nielsen data. Okay, I guess I could follow up with Jennifer on that just to get sort of clarity on the data. Why don't I move on to one more then? It is back sort of building on Akshay's question about M&A, and it is more about the portfolio overall. Over the last of years, Denise, you've embarked on a bit of a portfolio reconfiguration effort with some of the M&A. Are you happy with where the portfolio is today? Do you think it is the portfolio that will allow you to get back to your long-term algorithms? Or should we expect M&A to remain in the forefront of your strategy as you continue to rebalance the portfolio? And if so, can you give us an update in terms of what you are thinking in terms of fit, size, timing, et cetera? Denise M. Morrison - President, Chief Executive Officer & Director: Yeah, I think we've made good progress, in terms of the reshaping of our portfolio and pushing into faster-growing spaces with the three acquisitions that we made, and with the divestiture of the Europe Simple Meals business. I do believe that we need more M&A. Although, we're very willing to be patient because deals need to create shareholder value. And so, we're very disciplined in our approach there. Jason M. English - Goldman Sachs & Co.: All right. Thank you very much. I'll pass it on.

We'll take one more question. We're coming up on the hour. Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Just one more comment on the shelf space and stickiness question. As Denise mentioned most of that gain has to do with extension of our premium offering, and our Slow Kettle business is growing well above double digits in the marketplace. So, we feel really good about the velocities we're seeing on that business. And, as you know, we've just launched a line of organic soups into that premium section, as well. It's still early days on the organic thing, but we feel really good about the ACV distribution and shelving we've achieved to date on that one. So, we feel really good about our premium offering in Soup, on shelf.

Thank you. And our last question will come from David Driscoll of Citi Research. Your line is now open.

Hi, David.

Hi, good morning, and thanks for squeezing me in. Just a few loose ends. Anthony, can you quantify how much of the $200 million in cost savings are to be realized this year? And then also for you, can you quantify for us what you expect the incentive compensation headwind to be for F16? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, so let me take those one at a time. I can't quantify specifically on the $200 million. It gets a bit complex. But what I can tell you, that between the cost retainment efforts that we had in place before the $200 million initiative, and inclusive of the $200 million initiative, we've probably saved somewhere around $15 million in the quarter. Now, when we get to Analyst Day, we'll try to parse that apart, because we're still going through the analysis now to figure out, well, how much is due to the change in travel policy, for example, or consultant policy, relative to the restrictions we had in place already on discretionary spending and head count? So it gets a bit difficult to do that. And we'll try to do that for you when we get to Analyst Day, and we'll try to give you an outlook, looking ahead across the three years, at what rate do we expect to realize the $200 million? On the incentive comp, just to give you kind of order of magnitude. If I take you all the way back to the beginning of the year, we said that incentive compensation would be a $0.09 headwind. Now we're saying it's a $0.04 headwind. That nickel is still hanging out there for next year. Probably a way to think about it.

Okay. Then just following up on the fourth-quarter expectations, what drives EPS down so much, given your expectation for gross margin improvement and what sounds like pretty clearly additional cost savings? Anthony P. DiSilvestro - Chief Financial Officer & Senior Vice President: Yeah, let me give you a couple of components I think should help you. The one thing to remember is that last year has the extra week, right? So if you go back to the $0.49 that we reported on an adjusted basis, there's $0.08 in there that we've quantified as the extra week. The other thing we've said is that $0.04 compensation headwind all sits in the fourth quarter, and there's probably another $0.01 of currency. So there's $0.13 of decline for you year-on-year.

Okay. I appreciate the help. Thanks to everyone and have a great holiday weekend.

You too.

Thanks David and thanks everyone for joining our third quarter earnings call and webcast. A full replay will be available for you about two hours after the call concludes. You can go online to see that or call 1-703-925-2533. The access code is 1654351. You have until June 5, 2015 at midnight, at which point, we move our earnings call strictly to the website, investor.campbellsoupcompany.com under News and Favorites. Mark it in your favorites. Just click on Recent Webcasts and Presentations. If you have further questions, please call me, Jennifer Driscoll, at 856-342-6081. If you are a reporter with questions, please call Carla Burigatto, Director of External Communications, at 856-342-3737. We hope to see many of you at our Investor Day July 22nd. That concludes today's program and you may now disconnect.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all now disconnect. Have a great day, everyone.