Good afternoon. My name is Victoria and I will be your conference operator today. At this time, I would like to welcome everyone to the Fortune Brands Second Quarter 2018 Results Conference Call. After the speakers' remarks there will be a question-and-answer session. Thank you. I would now like to turn the call over to Mr. Brian Lantz, Senior Vice President, Communications and Corporate Administration. You may begin your conference call. 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're pleased to be here today to provide an update on our progress for the second 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 investors 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 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 our 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 Chris Klein, our Chief Executive…

Thank you. Your first question comes from the line of Adam Baumgarten with Macquarie. Adam Baumgarten - Macquarie Capital (USA), Inc.: Hey, guys. Thanks for taking my questions. Just to start, could you give us some more color on what you're seeing in your end markets and some of the actions you've taken that gives you confidence that second half sales growth will pick up and margins will improve? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure. I'd start with taking care of our own house. We did a tremendous amount of work first half of the year, second quarter, talked through the actions we've taken in Cabinets, pricing action really across every part of our business, and we're seeing that impact now and we're going to see more of that coming into the second half. We see good demand flowing through the channels. You saw results in terms of growth; Plumbing very strong, Doors strong, and markets look good. I'd say coming out of the first quarter into the second quarter things were a little slow in the Northeast, Midwest, but they started picking up late-April and the whole country is progressing nicely. The West and South continue to be strong. And then, just we look out in terms of overall drivers across the markets. We come in a little later in the building process and there's quite a bit of backlog out there both on new construction as well as R&R contractors, and kitchen and bath designers. They're full and they've got a lot of activity that's going to come through here. So, it's going to be a busy second half. We're well positioned. We did a lot of work in the first six, seven months of the year. So we're feeling pretty good right…

Your next question comes from the line of Mike Dahl with RBC Capital Markets.

Hi. Thanks for taking my questions. I wanted to focus the first one on plumbing and there's clearly a lot of moving pieces on the cost dynamics, both in terms of the inflation that you've incurred versus pricing dynamics, then looking at what could potentially come down the pipe in terms of tariffs, then also seeing things like copper rollover. Could you just help us kind of walk through how you expect all of this to unfold from a price, cost and margin standpoint in Plumbing over the next few quarters? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure. I'd go all the way back to third quarter, late third quarter, fourth quarter last year, copper metals rising in the Plumbing business. We saw that coming at us and started taking pricing action in the first half of the year, and that really kind of matched up against what we saw in terms of input cost inflation. And there's a bit of a lag there. So, we've got components coming in, we assemble here in the U.S., and so we were adding value here in the U.S. as well. So there's a piece of it that's tied directly to component inflation and there's a piece of it that's under our own control. And so, we've matched that up. We were aggressive coming out. And I think – and as you can see, our target's 21%, we hit 21%, and that's inclusive of the investments we're making in the business to drive innovation, marketing, branding, data analytics. So there's a lot behind that. So we're in a good cadence. In terms of looking out into the future, metals have backed off a bit. We'll get the benefit of that as we kind of come in, but we're still working through, obviously, inventory that we've got in the system. And in terms of future tariffs, I can't speculate on what those tariffs are going to be and how they're going to unfold. We'll manage it. We'll manage it through a combination of supply chain, as I said, we add content here in the U.S., and through pricing actions. And so, we've been able to address those increased costs through a combination of all those actions to this point. That 21% margin's pretty solid. That's where we expect the balance of the year. So it's right on strategy. So, we're feeling like we have the ability to handle what comes at us and move pieces both in terms of pricing as well as supply chain to address it. So, we're kind of dealing in this uncertainty for a little while already and I think we've navigated it quite successfully.

Yes, certainly. Great. And shifting gears to the combination of Doors and Security. It seems like there's a couple things going on here that you're trying to set up this business for, and one of them seems akin to when you set up GPG and have started to roll in some acquisitions and kind of build out some multi-brand strategies and such underneath that umbrella and, clearly, that's driven some tremendous results. So I was hoping you could give us a little more detail on kind of what you see. I know you laid out some of the long-term financials there, but just what you see as the opportunities both from an organic product development standpoint, a little more detail there. And just seems like maybe there's going to be some increased focus on M&A in that combined segment. And what type of assets are you looking for there? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah, terrific observation. I think the parallel is quite strong. First of all, we're taking kind of our two smaller businesses, bringing it under a terrific leader in Brett Finley. You've seen the results in Doors. I don't have to explain kind of how strong he is given his leadership of what was already a great business, and you look at what we've done in the last 2.5 years in terms of share and margin expansion. There is some scale benefit. So we took our two smaller groups, bringing it together, there'll be some scale benefits in a stronger common back office team. That will help accelerate some of the organic product development and really drive some more revenue momentum there. But it also, as you point out, will set up our ability to take on acquisitions and really bring them…

That's really helpful color. Thanks, Chris.

Your next question comes from the line of Justin Speer with Zelman.

Hey, guys. Appreciate you taking the time. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure.

Just a follow-up on the combination of the two segments. Can you articulate what kind of maybe revenue and cost synergies you're planning? I know you're mapping towards an intermediate term goal, but in the near term, any kind of synergy that you're going to call out for that combination? Christopher J. Klein - Fortune Brands Home & Security, Inc.: I'd just say it's going to – as we look at kind of how it's going to evolve, putting them together, you'll see running it will be roughly 16% margin business. They have similar margin profiles to start. And it'll get us, on a combined basis, to about 18% operating margin over the next two, three years. So, I'm not going to break out kind of specific leverage within there, but it'll allow us to get to those kind of margin expansion numbers with probably a little bit more certainty and a little bit more speed. And then it'll allow us to bring acquisitions underneath that and leverage that set of capabilities, so you're going to get some synergy in terms of cost leverage on acquisitions, which is exactly what we see in Plumbing, which is you've got a stronger common back platform you can bring things in, in terms of brands and products and ride off of that, and you get some good cost synergies right out of the gate. So it's a combination of all those things.

Thank you. And I wanted to turn my attention or turn everyone's attention to the Plumbing business. You put up a very large first half comp, well above market demand at 12%, double digits, and when you see a 15% comp in the first quarter, it begs the question is there channel fill, is there going to be a pull-ahead risk, but then you put up a 9% in the second quarter and then you characterized it. I think you said channel partners have lower inventories in the quarter. Just help maybe provide context of how you get into the channel, and I understand the inventory situation, but also what's going on with this great growth that you're putting up. Christopher J. Klein - Fortune Brands Home & Security, Inc.: I guess step back and I'll take the first part of it which is just a lot of investment in capabilities. We've got the acquisitions that are working and coming together. That team was significantly enhanced in the first nine, 12 months of forming the GPG back in 2016; and so a lot of that product innovation, branding work, marketing, data analytics. There were investments going on that you're starting to see that impact flowing through. The acquisitions have worked well and they've worked well not just individually but in concert, bringing out the concept of the House of Rohl, which is a combination of those luxury brands. But we're also paving the way into hospitality and project work. And I'd say, you think about the old Moen business, terrific business, big work house of the company, strong profit generator, but it was really at the heart of the market and that was where the brand lived, and you couldn't as significantly penetrate a lot of that project work and…

Excellent. Thank you, guys. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Right.

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

Thanks. Good afternoon, everyone. First question I had is, across the earnings season, so far cost inflation and price recovery continues to be one of the central themes. And I believe you said in your prepared remarks that both of these items remain on track with your earlier expectations. And I just wanted to confirm that and kind of, by component, what we've seen predominately with most of the companies is higher-than-expected cost inflation as the years progressed so far, and as a result incremental price increases and price recovery actions. I was curious if you saw that as well in your business in the different raw mats that impact your different segments or if, by contrast, cost inflation kind of remains where you thought it would be a quarter ago and you haven't had to take any incremental pricing actions against that. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Sure. And I'd just say that's something that hit us to start – really started to come at us in the fourth quarter of last year. So, if you think about plywood tariffs and kind of the core brass and some of the Plumbing cost inflations came at us maybe a little sooner than other parts of the building products segment. So we kind of got off on this stuff hard, fast, early, and so we started taking pricing action later in the fourth quarter, in the first quarter, and then, yes, there was some continued acceleration, and so we've had to take incremental. But, I'd say, we worked our way through a chunk of it already and then took some incremental. And it wasn't just pricing, we're also working supply chain and pulling some other levers. So, I don't know specifically what's driving other categories that…

I appreciate that and very helpful some incremental color there. I guess, secondly, it seems like most of your businesses, as you've kind of said – stated, are on track, your expectations for the quarter are on track and it feels like that's kind of by segment, you can apply that statement. Just perhaps slightly more granular, but you increased your EPS guidance by a few pennies. You actually lowered your operating cash flow guidance by about $5 million. So just wanted to get a sense of what was driving both of those. I don't know if the EPS was from a share count perspective, if operating it's either – because it would seem like most of your margin expectations are in place by segment. So just trying to get a sense of those two full year guidance changes, albeit slight, what's driving each of them. Patrick D. Hallinan - Fortune Brands Home & Security, Inc.: Yeah. For the most part, you're correct in understanding the EPS raise is driven by the incremental share repurchase activity. So the incremental share repurchase activity that we've had since the first quarter call would – net of interest expense, would give you about $0.03, maybe $0.04, and so that's what we've put into the guidance. And the midpoint of the guidance went from $3.64 to $3.67, that's the primary driver. The change in the cash flow outlook of roughly about $25 million mostly a tax timing item that has become somewhat uncertain just around some of the new behavior in the treasury; modest change to other operating dynamics, but it's mostly timing of around a tax item. And what I would say on our full year outlook is we still see the market being strong. We still see U.S. housing 5% to 7%, global markets 5% to 6%. We still see our sales growth 6% to 7% as we stated our EPS growth in the range of $3.62 to $3.72. And our OI margin improvement, our initial guidance was roughly 50 basis points, we're probably in the 30 basis points to 50 basis points range just based on some of the inflation with the benefit from the share gains. But that, I would say, should tighten up the guidance for you, Mike.

Great. Thanks so much.

Your next question comes from the line of Phil Ng with Jefferies.

Hey, guys. The restructuring effort in Cabinets seems to have progressed quite well. If there were any big hurdles on the operational front, is that pretty much behind you and can you now pivot to focus more on the commercial front so you track more in line with the broader market on Cabinets? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yes. It's a combination of things. I think we have been growing in those segments of the market that we're targeting, so in-stock cabinets, vanities, some parts of the builder business, the value part of the business, the West and the South have been quite strong, so all that is underlying, at the same time, kind of pulling back from some of this mid-tier business, which hasn't been as strong. So, we're down that road. You will see better revenue performance in the second half out of the Cabinet group, and so that is part of what the plan is and is flowing through as we're looking at orders in the first part of the quarter. July orders look strong. So I think you will start to see that flow through very much consistent with what we laid out in May as the overall pivot, which is focusing on those parts of the marketplace that we see growing. Lining up ourselves against that, we've already got a good portion of that business. We're expanding some capacity there and we're expanding some capacity in Mexico in some value parts of our supply chain so that's got very strong leverage. And there's good profitability in those segments of the market. There's more automation, more kind of a cost supply chain or standardization. So we get great leverage in that part of the market. So, yes, you'll see good commercial…

That's great and, Chris, you touched upon this a little bit already, but with the potential tariffs, can you talk about the potential impact you could see on your different businesses, whether it's Plumbing or Cabinets and how can you manage that? And does that potentially make your product a bit more competitive relative to imports, particularly on the Cabinet side of things? Thanks. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah. I guess things will unfold as they'll unfold. We've dealt with what's come at us already and we've already had some hits in terms of plywood and some steel and other things that have been input costs to us. And we've dealt with that through a combination of pricing and supply chain. And I'd say, in general, from a – we're a big U.S. manufacturer. We're a big North American manufacturer. And so we've got a good North American set of capabilities. We add value in North America, we add value in the U.S., we're a big assembler; we do fully integrated manufacturing in parts of our business. So that works to our advantage across big chunks of the portfolio, especially in Cabinets. I'd say other parts where you've got components coming in, there is a China element to our supply chain and we'll see how that unfolds and we'll react to it as it unfolds. So, beyond that, we've been able to deal with what's come at us in a pretty significant way already and we'll see how this plays out throughout the fall. But I think, relative to those who are making a lot of finished goods in China and shipping them in, we're in a better place because we can move some componentry around and continue to add a lot of value in the U.S. as part of that supply chain. There's also a bit of a lag in terms of how this plays through the businesses. Supply chains coming out of Asia are longer, so you've got a bit of time to react to how they're flowing through.

Your next question comes from the line of Susan Maklari with Credit Suisse. Christopher J. Klein - Fortune Brands Home & Security, Inc.: Hello. Susan Maklari - Credit Suisse Securities (USA) LLC: My first question is – yeah, can you hear me? Christopher J. Klein - Fortune Brands Home & Security, Inc.: Yeah, I can hear you. Hi. Susan Maklari - Credit Suisse Securities (USA) LLC: Okay. Perfect. My first question is around there's been a lot of talk around the elasticity of demand in building products and, certainly, your results this quarter show that you can continue to get price while keeping the top line pretty healthy. But it'd be great to get your perspective on that. How do you think about your – looking out, your pricing power and ability to continue to cover some of the inflation that could come through? Christopher J. Klein - Fortune Brands Home & Security, Inc.: I think it depends on the parts of our business. I'd start by saying we're leaders in our category, we've got strong brands, we've got strong positions in our markets, and so we're already in that strong leadership position. I think then you can move through the categories. I think, in Plumbing, you've got really strong brand position, a lot of innovation coming through, and so we can take price and we have taken price. It isn't unlimited. I think there is a point where you'll get pushback to the channels, which is why you've got to be also working supply chain in concert with that and you've got to be deliberate and take a little bit along the way as opposed to just taking big bites all at once. And so that's what we've been trying to do across that business. I think in the…

Unfortunately, we have run out of time for questions. We thank you for your participation in today's conference call. You may now disconnect.