Good afternoon. My name is Scott, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fortune Brands' Home & Security First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Brian Lantz, Senior Vice President, Communications and Corporate Administration, you may begin your conference. Brian C. Lantz - Fortune Brands Home & Security, Inc.: Good afternoon, everyone, and welcome to the Fortune Brands' Home & Security Quarterly Investor Conference Call and Webcast. We are pleased to be here today to provide an update on our progress during the first quarter of 2018. Hopefully, everyone has had a chance to review the news release issued earlier. The news release and the audio replay of the webcast of this call can be found in the Investor section of our fbhs.com website. I want to remind everyone that the forward-looking statements we make on the call today, either in our prepared remarks or in the associated question-and-answer session, are based on current expectations and on market outlook and are subject to certain risks and uncertainties that may cause actual results to differ materially from those currently anticipated. These risks are detailed in our various filings with the SEC such as our Annual Report on 10-K. The company does not undertake to update or revise any forward-looking statements, which speak only to the time at which they are made. Any references to operating profit, earnings per share or cash flow on today's call will focus on the results on a before charges and gains basis for continuing operations, with the exception of cash flow, unless otherwise specified. With me on the call today are…

Your first question comes from the line of Susan Maklari with Credit Suisse. Your line is open. Susan Maklari - Credit Suisse Securities (USA) LLC: Thank you. Good afternoon. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hi. Susan Maklari - Credit Suisse Securities (USA) LLC: My first question is just on Plumbing. I mean, obviously, you're continuing to outpace the market there, very impressive. Can you just give us some color on was some of this outperformance led by certain price point or a certain brand within that group and maybe what you're seeing in terms of some of the more recent acquisitions that you've done, how those have been performing? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah, it was really widespread, and that's what's impressive about it. We saw a momentum building in Plumbing over the last few quarters, and it kind of came to ahead this quarter. But the business overall has just got a lot of momentum across all channels across the U.S., Canada, China, wholesale, retail. And I guess, I'd step back and say it really is a byproduct of the changes we made going back 2016. The new strategy we've put in place, new management we've put in place. And the premise is, can we bring more brands and more products through our industry-leading channels across wholesale, retail, China? And that's what we've been doing over the last almost two years. Some of it is the success of the acquisitions, so all the new acquired businesses are performing very well in and of themselves, but then we're bringing them through channels. And some of the new styles and innovations are coming out of the acquisitions, so we're spreading that across the portfolio. Branding is really kicking in, and…

Your next question comes from the line of Michael Rehaut with JPMorgan. Your line is open.

Thanks. Good afternoon, everyone. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hi Michael.

I had a first question just on some of the changes around guidance. And perhaps, I'm doing the quick back-of-the-envelope math incorrectly. So maybe you can provide some clarity. With the reduction in the share count from 155 million to 150 million due to the share repurchase, I'm coming up with that being a $0.12 per share benefit. Yet you raised the full-year guidance by only $0.04. At the same time, you had – it looks like you reiterated the sales growth as well as the expectation for 50 bps of consolidated margin expansion. So I'm kind of confused where – what's happened to the other $0.08. I would have thought that, perhaps, with some of the near-term issues with Cabinets, the $0.08 would have been explained by some of the shorter-term issues there. But perhaps you can help me with that. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. Patrick D. Hallinan - Fortune Brands Home & Security, Inc.: Mike, it's Pat. First of all, we will have about $14 million, $15 million of incremental interest expense associated with those share repurchases. So when you look at share repurchases net of incremental interest, you're kind of in the $0.07 to $0.08 range. So our guidance going up $0.04 gives you half to more than half of what we'd expect for the year. And as we mentioned, we feel good about the year and our business. We're waiting to see how the spring plays out. And then when we get to the end of the second quarter, we'll see if additional revisions are merited. But we're feeling good about our business, and we feel like we're biased towards the upside.

Okay, that's helpful. And thanks, I didn't catch that on the interest. I guess, second question, a lot of – there's been a lot of focus, as all of you guys know, around Cabinets. And fantastic, fantastic results on Plumbing without a doubt. But on the flip side, I think the first quarter adds a little momentum to some of the more skeptical out there or bearish on the Cabinet segment. Maybe you could go into a little more detail in terms of what drove the margin drop in the quarter. You'd mentioned the plant closures as one. And how you're thinking about 2Q and the actions that are in place or set to be – set to play out over the next few months to get to the 11% margin and the, what I'd assume is, pretty strong improvement in the back half. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. So I'd start with our plan coming in the first quarter was for the margin compression. Last year our 8% margin was pretty unique in the first quarter. The Cabinet business typically doesn't perform very well because of the fixed costs that we're carrying throughout the year. So as you know, seasonally, December, January, February in building products is – it was a difficult winter. You're just not getting that much volume come through. So that's what we planned for. And we had a little rougher February, March than we would have anticipated. And so that definitely impacted on the operating leverage in that business. So that was one piece of it that kind of came through. There was a little bit more commodity pressure as well. But in general, the quarter played through okay on the dealer side of the business, which is 50%…

Your next question comes from the line of Dennis McGill with Zelman & Associates. Your line is open.

Hi. Thank you, guys. Chris, just continuing on your commentary on Cabinets. So going back to your opening remarks, where 14% is still the bogey, but it sounds like it's a little bit further out. Is the right way to think of it is that the restructurings will happen this year, you'll be around 11% this year. And then you're looking at roughly 100 basis points a year? So it's 3 years or after that you'd aim to achieve that 14%? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah, that looks pretty good. So 11%, maybe a little bit more, depending on how quickly things move through and where the leverage comes from. And then we're in a good flying formation as we move through 2019. And so you'll start to see that leverage. Again, kind of think about it as additions and subtractions, subtractions off the cost base, which clearly will improve leverage, subtractions off parts of the portfolio that were dragging on the top-line and just were not growing kind of sequentially. And then doubling down in parts of the market where we're growing and taking share. So the in-stock cabinets and vanities business has been growing robustly over the last 2, 3 years, taking share, growing strong inside of our dealer business, strong builder business. So we have direct-to-builder, but we also do a lot of builder business through the dealers. And that product portfolio, we're adding some additional product lines too. So that's going to continue to grow. And then our direct-to-builder business, that's 80% of our revenue is kind of right inside of that sweet spot. And then as we've talked about before, we're restructuring part of Canada, we were kind of wide and thin across a lot of Canada and we just try to narrow in more on where we've got real strength and pull out of some parts of the market that we're more kind of on the fringe. So...

Okay. And then on price versus raw materials, it sounds like you're neutral across the portfolio for the full year. But I'm sorry if I missed it, but did you give a number for where you were in the first quarter? And then just a sense of what does the trajectory of that recovery look like? How heavy is the recovery in the second half of the year versus the first half of the year versus something that maybe is more moderate through the year? Patrick D. Hallinan - Fortune Brands Home & Security, Inc.: Dennis, Q1, Q2 price will trail inflation a bit. Think about it in terms of somewhere between $5 million and $10 million portfolio-wide. But by the time we enter the second – exit the second quarter rather, we'll be covering it fully. And so it'll be a bit of a headwind. The first part of the year, it differs by product line and by months because the effects by product line and the price increase is going in differ. But by the second quarter, we'll be neutralizing it fully. And therefore, the productivity gains we're making in our businesses, the innovation and the mix improvements will show through and be driving margin expansion in the back half of the year.

Okay. Appreciate it, Pat. Thank you, guys. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Thanks. Patrick D. Hallinan - Fortune Brands Home & Security, Inc.: Thanks.

Your next question comes from Michael Eisen with RBC Capital. Your line is open.

Good afternoon, guys. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hi.

Was hoping you guys could start off talking a little bit about the Doors segment, pretty good results coming through. You guys talked about outgrowing the market. Can you talk about how much you're outgrowing the market? And I think you mentioned a new retail placement that should accelerate growth in the back half of the year. Can you give a little more color on that as well? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure. Yes, I think we're – I won't give – put an exact number in terms of how far ahead of the market we are, but we're clearly taking share, running better than kind of if you look at the other public newer companies. Our growth has exceeded theirs, and it's going to continuing as we look at where we're taking it. A lot of that's coming out of the wholesale side of the market. So that's builder market. Door business is about 50:50 new construction, R&R. Our whole portfolio is more like 65 R&R, 35 new construction. So it's tilted more towards new construction. And so we're doing better with bigger builders and through our wholesale channels. Some of that's also just innovation. So at the higher end of the market, we're driving more product there at higher price point. So we're taking share on that basis as well. In retail, we've got a really strong long-term relationship with Lowe's, and we just continue to expand that relationship. And so that's been a lot of success we've had there, and we continue to work closely with them, real partnership to drive a lot of growth with them kind of across all their price points and working closely to try to drive them in the category. So that's worked really well. So it's a combination of innovation and just channel strength across business. Great team there and they really ramped up the innovation side of that business. And now you're seeing that it took a little while. It was always kind of up and along, but we really pushed it hard in the last 18 months, and you're kind of seeing that flow through the market.

Yeah, I know, that's encouraging, and I appreciate all the color. And then just a quick follow-up. You guys both mentioned that the idea of some more M&A coming in the next 12 to 18 months and kind of the potential for another leg to the story. Can you talk about a little where you're comfortable with leverage at this point of the cycle and how we can see that potentially playing into the size of a deal you're able to do here? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure. So I'd say, we're active and looking at things, and we're just in the midst of a number of different things. Our primary focus is inside of the businesses that we've got because we get the best leverage if it's inside of one of the four parts of the business that we've got. So there are things that we're working on right now across those businesses that could materialize here. And so we'd be pretty excited about that. In terms of another category, we've looked at other things that are similar to what we're in today. Heavy consumer involvement, so not commodity-building products but more consumer home products where the innovation that we're really good at can play through channel strength, really matters. You got pricing power, which clearly we do, that demonstrate. So there are some categories that look like that, and so we visit those as well. I'd say for where we're at in the cycle, I mean, we spend a lot of time looking at a lot of forward indicators around demographics and household formation and where the building cycle is. And so we're comfortable that the things aren't going to stop here anytime soon, understanding interest rates are rising and some other…

Got it. I was actually more so looking to how high you're comfortable going for the right deal. Christopher J. Klein - Fortune Brands Home & Security, Inc.: I think we've kind of probably got a natural target at about 2.5, but I think if it was a right deal, especially if it was synergistic and fit within one of the businesses, so near end, very high probability of synergies flowing, which is what we've seen in some of the things that we've done already, it could go a little bit of above that. And then you're paying it down pretty quickly because our core business is throwing off a lot of cash. And if it was in our wheelhouse, you'd probably see some pretty quick delevering going on, too. So, I don't know that we've got a number but I think we've got a lot of capacity to do the things that we want to do and kind of the things that we're considering looking at now. And especially in sequence, we don't do everything – if we did something in the next six months, you're paying down all along the way. And then if you did something else six months after that, it's kind of on cycle with the earnings that you're acquiring.

Understood. Appreciate all the color. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Thank you.

Your next question comes from the line of Philip Ng with Jefferies. Your line is open.

Hey guys. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hi.

When you think about a fifth leg, would that potentially be a larger deal in size and some of the things that you're looking that are more similar to what you're doing right now? Are they bolt-on and I just wanted some color around that? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah, I mean, it is probably bigger than just a bolt-on that we've maybe done before or a mid-sized deal and that we'd want a leadership position in whatever we are going in. I don't like the idea of playing on the fringe of a market that we haven't been in historically. So we'd be pretty clear eyed about that and make sure that we come into something where we could establish just a strong position right out of the gate and it's close enough in terms of understanding consumer behaviors in our sector and what consumers are responding to as we see some commonality across our businesses and how they're thinking about their homes and what they're emphasizing. And so if we can translate that into another consumer involved category, in a leadership position, by definition, that's probably a little bit bigger. So we are not going to bet the ranch, nobody should be worried about that but that probably means that you're on a little bit larger size.

Got it. And Chris, I couldn't help but notice how excited you are about some of the efforts you made in Plumbing and you're obviously seeing a lot of momentum there. Just trying to gauge when we think about this business historically, it's we view it more as a mid-single-digit growth business. You're clearly outpacing that, but just trying to gauge how sustainable this growth trajectory is for the next few years. Is the new normal more high-single-digit growth? Any color would be very helpful. Thanks. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. So going back to kind of last, really, 18 months ago, summer fall of 2016, we started talking very clearly about holding margin in that business between 21% and 22% margin and investing in growth and started making very conscious decisions in investing in products, investing in brand, investing in technology, data analytics, e-commerce, a lot of things that were really set up to drive growth across multiple fronts. And it was with a leash on spending, which is the deal is we could have accelerated margin, but we're better off if we can get above-market growth at 21%, 21.5%. And they've been able to deliver, and I think that's where the excitement is. It's in the excitement that if you look at – actually, four – last four quarters, you can see sequentially performance relative to the four quarters before that, picking up 8%, 8.3%, 8.6%. Now against last year's first quarter, up much stronger organically 16%. But yeah, we'll be in the low teens this year, and I think you should expect we're going to grow a couple of percent more than the market overall. And there'll be pockets of that market that will be even stronger because what we're doing is working. And so that's – I guess the excitement comes from is it a lot – it isn't one big thing. It's a lot of concrete pieces of a strategy that are again – executed against a higher-caliber team they brought in a lot more talent there and align that team with a great culture – a performance-driven culture. And that's what's happening a lot of people talk about all that stuff and frankly, that's what I was doing was talking if I go back 18 months ago. And now you can actually see it playing through. So, I guess that's what you're picking up.

Your next question comes from the line of Tim Wojs with Baird. Your line is open. Josh K. Chan - Robert W. Baird & Co., Inc. (Broker): Hi. Good afternoon. This is Josh Chan filling in for Tim. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hi Josh. Josh K. Chan - Robert W. Baird & Co., Inc. (Broker): Hi. If I could piggyback on the Plumbing growth, could you just kind of go through different channels or verticals, however you want to describe this, kind of where you think you are underpenetrated because presumably those are the areas that you have a better runway for above-market growth? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. So you could – I'll take it across, you look at North America, U.S. and Canada, where we've been market leader overall for a while. Across wholesale, within the wholesale market, you've got our builder business, which we've got an extraordinary share of the top 80 builders. And as we bring a broader product portfolio into those relationships, they responded well. So this would be in addition to Moen and bring some of the acquisitions into that channel. And so as they're building higher-end communities, taking some of our higher-end brands and bringing them into those communities, so that's extending that out. And so that's playing through in retail, taking a broader product portfolio. So we've acquired disposals, we've acquired some other adjacencies within that category. So it's putting more through that part of the market. And then in e-commerce, we've made a lot of investments there. We've been growing really over the last 18 months at a pretty strong clip. And it's – there, I think it's being conscious of the other channels and being conscious of what's…

Our final question comes from the line of John Lovallo with Bank of America. Your line is open.

Hey, guys. Thanks for getting me in here. Chris, maybe just from a high level. I mean, you talked about changing consumer preferences in the Cabinets business and how you're kind of evolving the Fortune business as you've done in the past to kind of target that next wave of growth. What, in your opinion, does that next wave of growth look like? And maybe on top of that, is there anything that's changing from a competitive standpoint that's impacting the industry's dynamics? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. I think it's an interesting time in the market, and I would go back to I've kind of watched this thing unfold over almost a decade. And you're in a period right now where it's less competitive dynamic. It's more we've talked about constraints around labor, and we've talked about simpler designs. And so that starts to translate into consumers behaving in a way where, okay, if it's going to take me a little bit longer, and I'm going to have to struggle to get a more complex design, and there's cleaner looks out in the market today in any event, then maybe I'll move to a more simplistic part of that market. That's for part of the market. The other part of the market, the high-end continues to roll as it always had. So what we've seen come through, both our dealer channel and our in-stock and vanities business, is real strength there. And we've been running hard to catch up, but we continue to have strong demand there. And so we're investing more. Some of that's in our Mexican operations because that's where some of that product comes out of. Some of it comes out of our USDA network. And then some of it…

Okay, that makes sense. And then the second question, I think I may have missed this. But I thought I heard you say that there is some walk-away business in one of the home centers. I was just curious what – was that in Cabinets and maybe if you could quantify that? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Let me quantify this, it's sort of third home center. So I just – I don't like talking about our customers by name, but there's two big ones and then there's a third smaller one. And so there's Cabinet business there that we exited at the beginning of the year and so that business was in decline for us and so it didn't make sense for us to continue with that. And in turn, we're heavily focused on the two large home centers and their special order business and are excited about what they're doing.

Okay, thank you very much guys.

This concludes today's conference call. You may now disconnect.