Ladies and gentlemen, thank you for your patience and holding. We now have your presenters and conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of today's presentation, we will open the floor for questions. And at that time, instructions will be given as to the procedures to follow if you would like to ask a question. It is now my pleasure to introduce today's first presenter, Mr. Paul Alexander.

Thank you, and good morning, everyone. Welcome to Kimberly-Clark's First Quarter Earnings Conference Call. Here with us today are Tom Falk, Chairman and CEO; Mike Hsu, President and Chief Operating Officer; and Maria Henry, CFO. Here's the agenda for our call. Maria will begin with a review of first quarter results. Tom will then provide his perspectives on our results and the outlook for the full year. We'll finish, as usual, with Q&A. We have a presentation of today's materials in the Investors section of our website. Now, as a reminder, we will be making forward-looking statements today. Please see the risk factors section of our latest Annual Report on Form 10-K for further information. Lastly, we'll be comparing 2017 results with 2016 adjusted results, which exclude certain items described in this morning's news release. The release has further information about these adjustments. And now, I'll turn it over to Maria.

Thanks, Paul. Good morning, everyone. Thanks for joining our call today. Let me start with the headlines for the quarter. Total sales were even year-on-year with organic sales down 1%. We achieved strong cost savings which helped us improve our margins and grow earnings per share. And we're on track with our overall capital plan. Now let's take a look at the details starting with sales. Our first quarter net sales were $4.5 billion. That's even year-on-year, with a 1-point benefit from currency rates. Organic sales fell 1% in the quarter and Tom will provide more color on our top line results in just a few minutes. On profitability, gross and operating margins were each up 30 basis points year-on-year. First quarter gross margin was 36.9% and operating margin was 18.6%. The margin improvements included good progress in developing and emerging markets. Our FORCE cost savings for the quarter were $110 million. So we're off to a good start relative to our full year savings target of at least $400 million. Commodities were a $35 million drag that was mostly offset by currency benefit. On the bottom line, first quarter earnings per share were $1.57, up 3% year-on-year, while our equity income reduced earnings by $0.02 per share, offset by a lower effective tax rate. Now let's take a look at cash flow. Cash provided by operations in the first quarter was $436 million and in line with our expectation. Cash flow was down compared to $553 million in the year-ago quarter, driven by higher tax payments this year. On capital allocation, first quarter dividend payments and share repurchases totaled more than $600 million. That includes $300 million of share repurchases. We continue to expect that for the full year dividends and share repurchases will total between $2.2 billion and $2.4 billion. Looking at the segments; in Personal Care, organic sales were even year-on-year. Organic sales increased 6% in developing and emerging markets, but were down elsewhere. Overall Personal Care operating margins were 21.4%, up 110 basis points. The improvement was driven by cost savings, higher volumes and favorable currencies. In Consumer Tissue, organic sales were down 3% driven by North America. Consumer Tissue operating margins were strong at 18.9%, that's up 20 basis points. In K-C Professional, organic sales in the quarter were even with prior year. K-C Professional operating margins were 19%, down 70 basis points. The comparison was impacted by cost inflation and strong results last year. So let me recap. We achieved significant cost savings and improved our margin. We delivered bottom line growth in a challenging environment. And we continue to allocate capital in shareholder friendly ways. I'll now turn the call over to Tom.

Thank you, Maria, and good morning, everyone. Since Maria covered the financial details for the quarter, I'll focus my comments on our organic sales in the quarter and then on our full year outlook. As Maria just mentioned, our organic sales were down 1% in the quarter. So, in January, we said that growth would be higher in the second half of the year compared to the first half largely due to comparisons. That said our first quarter organic sales were somewhat below my expectations, most of that coming from North America. In North America, our organic sales fell 3% in our consumer businesses, and that reflects the combination of category softness, greater competitive activity, and lower promotional shipments. Overall category growth across all channels, including e-commerce, was about 0.5% in the quarter, and that's about 1.5 points below what it was for the full year 2016. In terms of our key businesses in North America, our Personal Care volumes were off by 1%. In infant and child care, our volumes overall were down low-single digits, which is probably in line with the mega category. Category consumption continues to shift out of diapers and into training pants, and volume growth in e-commerce is continuing to accelerate. Our market share overall was even year-on-year and up 1 point sequentially in infant and child care. In Consumer Tissue, our volumes were down 7%, mostly in bathroom tissue. Results were impacted by competitive activity and lower promotional shipments than last year. We've got a stronger promotional calendar scheduled for the balance of the year. We expect better performance going forward in North America particularly the back half of the year when our comparisons get a little easier. Our planned product innovations will also help drive our growth in the near term. That includes…

Our first question comes from Lauren Lieberman with Barclays.

Thanks. Good morning.

Good morning, Lauren.

I just had a couple of questions, not surprisingly, on North America Personal Care. So first was just overall from a category perspective. Does it feel to you like there's been some sort of tipping point in terms of where consumers are shopping in these categories? Meaning the Nielsen tracked versus untracked, because the data obviously looked, from a category perspective, looked far worse than what you've said in terms of what you guys are seeing on category growth. And it looks like it's dramatically different since the start of this year versus end of 2016. So that was my first question.

I'll let Mike Hsu give you a little bit more color on that, but we've certainly seen a pretty strong uptick in e-commerce. And that's a trend that's happening in lots of places, but it did seem to accelerate in the U.S. in the last couple of quarters.

Yeah, Lauren, I do think maybe a shift upwards in e-commerce sales and other channels that are not scanned by Nielsen. I think if you look at the diaper category specifically, in Nielsen xAOC, you probably would've seen a high-single digit decline in volume, but across all outlets that was probably down about low-single digits across all outlets. And so, you are seeing maybe an increasing shift to e-commerce. I will say there's probably a lot written about this topic, but our relationships across all channels are strong. Our strategy is not just manage (11:58) or pick winners across retailers, and so we do fund customers on the same program across all channels, and then we tailor our execution support to support our customer-specific strategies.

Okay. Okay. And then, also the data that Tom cited on category performance and actually market share performance for the infant and child care business, just sort of discussing what wasn't mentioned, it feels like then perhaps adult and fem care is where the sort of more material under-performance versus the categories were. So if you can just talk about that and the outlook on those businesses it would be great.

Yeah, go ahead, Mike.

Yeah, in adult care, I think I'd say our volumes overall year-on-year are about similar versus year ago, and our comparisons were actually probably impacted by the base period year ago where we had strong double digit growth. We are affected a little bit I would say by strong competitive activity in the category. Price promotion remains elevated in adult care. Our market share is strong at 54%, but that is down 2 points versus where we were a year ago. The category overall is up mid-single digits, and we expect mid-single to high-single digit growth for the balance of the year, so we still think adult care has a lot of growth in it both in the short term and the long term. We've got a strong innovation plan. We're launching a boy's overnight pad this year that's great. And then we'll continue and invest to make sure we're competitive in the marketplace.

And, Lauren, fem care was down, I think, mid-singles, and part of that's timing of launch. We've got the fem care U by Kotex Fitness launch coming. That starts in the second quarter. So we expect to see a little stronger calendar in the back half of the year.

Okay. And do you have pretty good visibility on that in terms of shelves estimate? Feels like there's been some de-listings of other fem care brands. So is that freeing up space for you guys or is it coming out of your own existing space?

I'd probably say it's a bit of a mix, but obviously, for us, our goal is to get incremental space. And we're launching U by Kotex Fitness, it's got some pretty good traction and excitement from our customers, and so we're getting the right shelving and space for that. It's a very innovative product. From our side, the product is very tailored for fitness or exercise with real product differentiation there, so we're excited about it.

Okay, great. Thanks. I'll pass it on.

Thanks, Lauren.

Our next question comes from Wendy Nicholson with Citi Research.

Hey, Wendy.

Hi. Hi. Good morning. Two things just following up on Lauren's line of questioning on the online stuff; can you tell us at this point, specifically your U.S. Personal Care business, how much of that is online versus through traditional trade? And second thing, I'm having a little bit of trouble understanding why there would be sort of some inflection point January 1, 2017, all of a sudden, online really starts to grow that much faster because, as Lauren said, the tracked channel data just kind of fell off a cliff. Was there more promotional activity online? Was there greater assortment online? Is there anything that you can speak to specifically either about your business or about the category, and I'm really thinking about Personal Care specifically that would represent such a shift just over the last few months?

Yeah, Wendy, I guess a couple of things I would say. Number one, giving you an accurate e-commerce or online versus off-line share is pretty tough for us to do because there's a lot of our traditional brick and mortar customers that do quite a bit of click-and-collect. And so we don't really have any visibility of that because it goes into their existing distribution system and into their existing stores and they take off their shelves. So Amazon will be a big one that isn't in the tracked data that probably is the gap. And maybe – and again, they've had a strong quarter across lots of businesses, including ours. And I don't know, Mike, if you want to comment any more about anything that you're seeing in that specific space?

Yeah, I think, Wendy, the only thing I would add is that, obviously, the resellers have decided that mom is very important to them, and there's a strong battle to win mom. We have seen some retail price competitiveness across channels both from bricks and mortar and online, and that's probably driving some price competition and price decline into the market, which has accelerated the shift to some degree this year. Just to give you an example, I think in the diaper category, infant/child care mega category across training pants, diapers, infant care and child care, the category volume overall across all outlets is down 1% in volume, but down 5% in net sales. So that gives you an indication of the price deflation.

Okay. But there's been a lot written about, oh, with all of the shift in terms of where people shop, Walmart's going to be coming back and putting pressure on the manufacturers. Is there any – I know you said, hey, we treat all our customers equally, but in terms of incremental promotional spending that you are planning, I know you said for the back half you'll be spending more on promo, but that's been in the plans for a while. That's not a specific function of Walmart coming back and saying, hey, you need to be more friendly to us given the changing dynamics and where people shop. Is that right?

I guess I would just call it – if you look at the North American price was pretty neutral quarter-on-quarter. So that would be an indication that we're not funding additional competitive spend activity.

Got it. Okay. And then I just had a quick short question on China. I know, Tom, you said specifically that you are hoping that in 2017 pricing in China won't be as negative as it was last year. Is that a statement about something you're already seeing in the market? Or is that your confidence in sort of what's going with the Chinese consumer? Or what's driving your optimism about the Chinese pricing environment? Thanks.

Yeah, if you look at the pricing in Q1 versus fourth quarter last year was pretty similar. So we didn't really see further degradation. All the price decline was a carryover effect of things that happened in the first half of last year. So we would feel like it seems to have stabilized at this point in time. And the good news is you're still seeing really strong category volume growth. And so, our pricing comps will get a lot more favorable in the back half, which gives us some confidence on our organic top line outlook.

Terrific. Thank you.

Thanks, Wendy.

Our next question comes from Ali Dibadj with Bernstein. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. A few questions from me too. One is, so just from a short-term perspective, at least for the next 12 months short-term, your organic guidance range just really ticks down a little bit, so that 1% to 2% relative to the about 2%, which really just suggest that the rest of the year will be kind of what you had anticipated when you gave the guidance the first time around at the start of the year. And I'm still having kind of trouble understanding that. It feels a little optimistic to me. And at least, very simplistically, we look at things like even in the D&E markets, sequentially looks a little better, but the two-year stack just keeps looking like it's getting worse. The North America business, clearly, as you said yourself, a little bit worse than expected. Pricing competition, maybe you're not driving the competition yet, although looks like in Nielsen just recently you start to match, but a lot more competition in the U.S. So, look, I'm not (19:46) accuse me of being generally optimistic, but it looks like you guys are being relatively optimistic that nothing is going to get worse, and it's just going to go back to what you anticipated before this less than expected quarter. So, I guess, can you help me quantify how that gap will be closed?

Yeah, I guess I'd say, Ali, the year started out a little slow. Jan, Feb and March was much better. When we look at that and the plans that we have rolling forward with some of the innovation that we've got coming, that's what gives us some confidence. Our comps get quite a bit easier in the back half. So we knew the first half was going to be a tougher comparison to deliver organic growth. And we've got good momentum in a lot of markets around the world. I'd say the two factors were probably – and the call down of the top line was a little slower start in Consumer Tissue in North America, and then some price rollbacks in markets where there was pretty big price recovery last year and no other currencies have strengthened. So Brazil and Russia in particular have been places where the currency was pretty weak last year, and we took a lot of price and some of that snapped back. But we'll give you an update as the year progresses. We call it, as you know, down the middle of how we see the fairway, and we'll keep updating as we go through the year. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. And just on the, I guess, shape of the fairway, (21:15) a little bit on North America, clearly, that looked pretty tough. And you talked about some things that seem like they might get better, including March, but it just seems like there's a lot more competition in the space, whether it be, again, some of that private label stepping in, whether it be Procter & Gamble directly, it does feel like some retailers like Walmart are reacting a little bit to preemptively stopping the ALDIs or the (21:43) are coming through. Although that's small, they don't want to get them to be too big, a bigger tilt towards Amazon, where I think at least in the U.S. your shares are lower, you said before publicly versus off-line. So I guess I'm trying to figure out more broadly why there won't be more secular challenges? And this maybe not just impacting you guys, but just overall in the sector, what do you guys see from those elements, again, competition getting tougher, retailers clearly struggling to gain share from each other, tilt towards Amazon going forward, and how do you think that actually impact you guys and the sector broadly, because it does feel like those are secular challenges?

Yeah, I guess we would say that 1% to 2%, we still feel like relative to our long-term goal of 3% to 5% reflects some of those secular challenges.

Yeah. And Ali, I think while I certainly acknowledge that the North American environment's gotten more challenging than it was last year. I don't think our first quarter Consumer Tissue is how we planned to perform for the balance of the year. We are expecting our execution to improve. We recognize that it's gotten a little bit more price competitive and we will be competitive in the marketplace. But a lot of it comes down to how we execute in the stores. And I think we are expecting to improve our execution of the stores. Ali Dibadj - Sanford C. Bernstein & Co. LLC: And so just my last question on that flows right in there, which is just your 3% to 5% long term, do you think – it used to be that you guys are delivering 3% to 5%, and then really toward the high-end of that. Emerging markets clearly slowed down, competition clearly picked up, and now we're in this kind of low-end, obviously, below that low-end of that guidance for this year. Any kind of views on the 3% to 5% sustainability over long-term? Do you still think that's sustainable?

Yes. We do. In fact, Mike, maybe will comment on this because he's taking a refreshed look at the long-term strategic plan, which we won't unpack all the details for you this morning, but I'd say we still see strong category growth potential, particularly in a lot of the emerging markets. So maybe, Mike, do you want to comment just a little bit on that?

Yeah, definitely, Ali, strong potential long-term, particularly D&E. If you think about it with continued household formation, wealth creation, emergence of the middle class in a lot of these countries, our categories are still, I think, fairly early in our growth cycle, particularly if you think about fem care, diapers, adult care especially, and so we do see long-term growth. Now, what we see near-term volatility or cyclical volatility as we're experiencing over the last year and a half or so, yes, that's probably the case. But I think right now, we are building plans to kind of keep us in that range. But, obviously, with some of these new conditions, we haven't fully analyzed what just started happening in North America this January. So I think our analysis will continue to evolve. But, right now, we are still shooting for 3% to 5% range. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. Thanks very much, as usual, guys.

Thanks, Ali.

Our next question comes from Kevin Grundy with Jefferies.

Thanks. Good morning, guys.

Good morning, Kevin.

Just to come back to the guidance and the acceleration there, Tom, how reliant is the improvement in the back half on category improvement? And is that something you can put a number on for us? And then I have a follow-up.

Yeah, I think as you look at some of the price competition in China that's rolling off, what we're seeing is the underlying category has been robust from a volume standpoint. It's just been masked by some of the price challenges, and so we feel pretty solid that that's going to continue and flow through. There are other markets like Brazil, Argentina, where the economy hasn't yet really turned substantially. There's still a fair amount of price recovery to go in Argentina to get back to a more equilibrium state, and so there's probably some question marks there. On the other hand, Russia and other parts of Eastern Europe still seeing actually strong category growth there even though the economy hasn't fully recovered. And North America, I'd say it's a mixed bag. On the Personal Care front, we still see good category growth in adult care. We've got good innovation coming in fem care. Actually, the growth in the training pant category and out of diapers favors us given our share with Pull-Ups, so we feel pretty good about that. And Consumer Tissue is one where we just got to step up our execution a bit and make sure we're getting our fair share of that category. So I wouldn't say it's dependent on improvement in category growth, it's more sustaining what we see happening and then executing against it.

And Tom, just to stick with that for a moment, if I may. So, in North America, your slide suggests overall category growth of about 0.5% in the quarter. That was down 150 basis points relative to 2016. So, more specifically, the improvement in North America embedded in your guidance, which implies like 1.5% to 3% for the balance of the year from down 1%. So, specifically, and maybe you don't want to put a number on it and that's fine, but is that something you can put a number on for us?

Yeah, I don't think we could probably give you an accurate read on that specifically. And I think we'd probably say we're still trying to exactly figure it out what happened with the consumer in North America in the first quarter. There's been lots of theories. You've seen a little bit of category weakness across lots of places. So how much of it is broader economic slowdown, which you don't seem to be seeing in other areas? The job report was a little weak but not substantially so. So that's still probably what we're trying to dial in a little bit more precisely.

Okay. Thanks. So just one follow-up, if I may, and some of this has sort of been discussed, but maybe I'll ask it a little bit differently. So some of the commentary and what's been written around Walmart and the pricing posture and them looking to sort of solidify their lead as the price leader along with sort of underscoring an emphasis on private label, Tom, are those discussions, and, Mike, are those discussions different now? And maybe don't comment on Walmart specifically. I wouldn't expect that. But, just broadly, are you feeling more pressure on the manufacturers at this point? That would be number one. Number two, all this promotion that we're seeing, which is not just unique to your categories, there's a number of others of course. How much of this, in your sense, is being funded by the retailers versus that which is being funded by – I'm sorry. How much is being funded by the manufacturers versus how much is being funded by the retailers? And then, lastly, are you seeing greater emphasis on private label at this point? Or is that a bit over-emphasized or overdone in terms of what's being written? Thank you.

It's a pretty long question, Kevin. We'll do the best we can with that.

Sorry.

I guess I would start. Price competition among retailers is not a new phenomena and it's maybe heating up a bit. Ultimately, finished product selling prices are retailers' responsibility and you didn't see a lot of price change in our North American numbers. So our trade programs are pretty much intact and maybe I'll let Mike comment a little bit more if you want on private label trends or the general nature of discussions there. I will say this though that when you've got good innovation and strong brands (29:14), it leads to a different discussion than if you don't have those things, it becomes more of an item price discussion.

Yeah, I'd say the private label trends, I think they're category specific. And so I would say, in diapers, probably the brands are holding up pretty strongly. In Consumer Tissue, maybe there's a slight improvement in private label on the (29:38) side. So I think it varies by category. Certainly, I think given the kind of the conditions we're given, we talked about with increasing penetration of online, I think price has gotten – come more to the forefront. And we're having discussions with our customers, but they feel similar to discussions we have most years. And our job is to make sure we provide our customers with the right support. As I said, we do try to fund our customers on similar programs, and what we do tailor is how we support them execution only with promotions and through their own marketing tactics.

Okay. Thank you very much.

Thanks, Kevin.

Our next question comes from Olivia Tong with Bank of America Merrill Lynch.

Thanks. Good morning.

Olivia.

In terms of first on – hi – your revised price mix outlook, sounds like it's primarily just currency related. Currencies are coming in a little bit, so some of the pricing you would've expected to take in emerging markets is no longer justified. But you also talked a lot about some of the things you need to do in North America Consumer Tissue and some other categories. So is that embedded into your outlook? Was that already in the outlook? Or is there something that's – or are you expecting more price mix, price promotion associated with that? And perhaps also where does pricing against incremental commodities inflation stand relative to your whole price mix structure? Thanks.

Yeah, I guess I'd say, and maybe Mike can comment a little bit more on North America, but I'd say our overall plan in North America hasn't changed much. We just didn't get it all executed in the marketplace in the first quarter, particularly in Consumer Tissue, and so our plan for the year hasn't changed in terms of what we plan to spend broadly. I don't know, Mike, is there anything else you want to add to that or?

Yeah, I think both in baby and child care and in Consumer Tissue, we are seeing increased promotion intensity. Our goal is to be competitive in the marketplace and we may need to increase our spending in some areas, but again, we have a pretty well established trade promotion effectiveness program, and we try to be very analytical in our approach and make sure we get the right returns on our investment trade.

And then on the commodities inflation, it's not enough to drive finished product selling prices in most places, and particularly, when you see many of the international markets, the currency turning favorable, it's not a calculus that would lead to a lot of price in markets like that. We are getting some pricing in – where secondary fiber has gone up quite a bit in K-C Professional, we're getting some price recovery. I think there's been more broad price increases across the industry that have been announced recently and so that will give us some benefit. But that's about the only one that I can think of that there's maybe a direct commodity driven price change that we'd see coming this year.

Got it. Thanks. And then in terms of margins, those have held up fairly well despite the top line slowdown and Personal Care was the particular stand out. And given the level of competitive activity there...

(32:54), Olivia.

No, no, no, I mean they've actually been pretty decent, but just trying to understand some of the key drivers of the improvement there and how you think about the sustainability of that.

Well, we would say brilliant leadership would be right at the top of the list, but jokes aside, we had a great cost savings quarter. $110 million in FORCE cost savings, a great way to start the year. And then that certainly was a driver of that. Good mix of negotiated material savings, pretty good productivity, some of this material specification changes, then an increasing element of that bucket is in some of the distribution and logistics related savings. It's encouraging. I know Maria's a fan of this to see our inventories keep coming down and that not only delivers cash, but also delivers cost savings as we've got less stuff to store and handle. I don't know, Mike, if there's anything else you want to build on that?

Got it. Thanks. And then just last question. Your thoughts on sort of the deal environment; growth has obviously slowed first in emerging markets, now a bit more in developed markets. And are there any areas you think where you could expand that could help your growth? And then broadly, what's your view on the M&A environment as a whole right now, given some of the chatter and some of the attempts that have been made not too long ago in the broader HPC space?

I would say there aren't that many tuck-ins internationally, but there are a few in a few places, but we did a lot of that in the 1990s and really bought up a lot of the market positions that we wanted and we've been able to consolidate some joint ventures into being 100% owned over time. And so it's a relatively light calendar of M&A activity. And yeah, we read all the same chatter that you guys read and, quite honestly, we're more focused on running our own business every day and stay pretty focused on that and don't play too much with the speculation process on what might happen. So, I think so far that's served us well.

Great. Thanks, Tom. Appreciate it.

Thanks, Olivia.

Our next question comes from Andrea Teixeira with JPMorgan.

Hi. Good morning, everyone. Thank you. I was wondering if you can please elaborate on the inventory levels in North America and China. And we benefit from your comments, but with the shift to online, and I know we discussed a lot of the call, but are you seeing inventory levels increase at the bricks and mortar? And how can – specifically in North America? And how about China? Have you cycled most of the levels of inventory there? I would appreciate. Thank you.

Yeah, in terms of retailer inventories, we didn't see a big shift anywhere really, and we have pretty high cube, high velocity categories, particularly in a place like China, where so much of it is e-commerce. Often the e-com players really aren't even holding any inventory. They'll pick up at our distribution center and deliver the same day. And so there's not a lot of inventory in those systems, and I know we've seen some minor shifts in inventory across other channels, but nothing that was significant enough to call out in the quarter.

And if I can ask – thank you. This is very helpful. If I can ask on the FORCE program, I know you did not update much, the numbers are still there and you tracked well on the quarter. But how much of it is related to FX and also the commodities environment? Like you see some potential upside there or actually the opposite given that you did translate some of this cost savings might be – as it translates, might be higher, but if you look at the commodity outlook, how you can track that number?

Yeah. Sure. As Tom mentioned, we did have a strong first quarter and $110 million of savings. And those savings came from across all the areas that our team looked to deliver against. Only one of those areas has to do with sourcing savings, which would be affected by the commodity environment. The tougher the commodity environment, the tougher the negotiations are, but we were very pleased with our team's ability to negotiate that – to continue to negotiate well in the first quarter and we would expect to see that continue through the remainder of the year. In terms of the other areas, though, we expect that we'll continue to drive productivity in our manufacturing operation. Our global supply chain team is partnering well with the regional supply chain teams and the in-country teams to really be focused on driving the manufacturing programs, driving waste out of the system. We've got some momentum there. We continue to build supply chain capabilities in that area, so we feel good about our number of $400 million for the year. One thing that I will note is if you look at our cost saving last year, we will have tougher comps on cost savings in the second half of this year because our cost savings really built throughout last year. But I think with the capabilities we're building and the execution and focus of the teams, we still feel good about that $400 million number for the year.

All right. Thank you, Maria and Tom.

Thanks, Andrea.

Our next question comes from Eve Powers (sic) [Steve Powers] with UBS.

Or Steve. So, first, just a couple of cleanups from your original guidance; I think originally you expected interest expense to come down slightly this year versus 2016, but given how you started the year, should we rethink that? And I guess, maybe as a potential offset, you've maybe guided the buybacks to $800 million to $1 billion, but started off ahead of that pace, so is there some offset there?

Yeah, interest expense, we still expect to be down slightly. We've got a refinancing that's coming up. We have a bond that comes due for $950 million in August, and that's at 6.125%, so we'll replace that with cheaper financing, which will help us. In terms of share repurchases, we're still expecting to do between $800 million and $1 billion this year. We started out a little stronger. As you'll recall, we finished last year with a little bit more cash on hand. We had very strong cash flows last year, so we started out a stronger in the first part of this year.

Okay. Cool. And then one more cleanup, which is just on the commodity backdrop, just what you're now assuming full year for oil and pulp and where you expect each to exit 2017? That'd be helpful. But, broader question, maybe this is for Tom, but I was hoping you could comment a bit more on market share trends globally really, because I think you mentioned flat shares in North American Personal Care, but clearly, you under-shipped in Consumer Tissue versus consumption. And overseas, it seems like a mixed bag as well. So just maybe more specific comments on where you're seeing relative market share strength versus weakness? And given that you're not really expecting category improvement going forward, are you embedding improving market share trends instead? Or is it simply sell-in versus sell-out timing that will drive sequential improvement over the balance of the year? Thanks.

Okay. I'll do the best I can with that, Steve, and we'll see, Steve, what I leave left for you to follow-up on. In terms of pulp and oil, we'd say for pulp we're probably up $40 to $50 a ton versus our original guidance in terms of we expect in terms of market pricing for eucalyptus. So we're calling euc at $870 to $900 a ton. And I know the current price is above that, but that's kind of our outlook for the year. Oil we're kind of in the $50 to $60 a ton still, and there may be some upside for us on that depending on where oil shakes. In the meantime, though polymer has actually gone up a bit, as there's been some supply challenges on polymer. And we don't have a lot of direct oil. We do a lot more polypropylene and oils short of the long-term proxy for that, but in the short term, they can go different directions. Swinging to the market share front, if you looked at shares sequentially in North America, they're pretty flat; up in a couple, flat in a few, down in a couple. Year-over-year, particularly in Consumer Tissue is where we had the most negative share comparison. So that was probably a high watermark for Consumer Tissue last year. As you travel around the world, I'd say you'd see relatively stable share positions. Brazil is up in fem care, down a little in diapers; similar story in Argentina. China shares were, I think, pretty flat to down 1-point; Korea, kind of a similar story. Positive shares in Russia, Ukraine, other parts of Eastern Europe on diapers in particular. I don't know, Mike, if there's any other ones that jump out for you? Fem care has probably been our star and that we've had very strong share performance in most markets on fem care.

Yes. The only thing I'd add, I think, certainly, I think in China, holding on pretty very good and doing a good job out there. Central and Eastern Europe, I think we are seeing a pretty good share growth. I think Latin America, as Tom said, pluses and minuses, but we know we need to get our shares pointed in a stronger direction. And then certainly, North America, I think BCC (43:05) or infant child care, shares about flat in the quarter, but most of the other categories a little softer year-on-year versus what we expect. So we know we need to perform better there.

Okay. I just want to – I think it was in response to Kevin's question earlier, you had said over the balance of the year you weren't really expecting much category improvement, but obviously, you're going to sequential improvement. So if shares are roughly neutral, which is what I gather from all of those comments in aggregate, but you're expecting improvement, it seems like you're expecting to be gaining share if you're not expecting the categories themselves to improve. Is that fair or am I missing something?

I think that's a fair statement. When we get done with this call, Mike and I are going to go in and talk to our team leaders around the company. And one of the things we're going to tell is we're not satisfied with our market shares in the first quarter. So we'd expect to do better as the year progresses.

And Steve, this is Paul. Just remember, similarly to our organic growth trends from last year, the market share trends follow suit. So the comparisons get easier on both metrics as we get into the back half of the year.

Yeah. That's fair. Thank you.

Thanks, Steve.

Our next question comes from Nik Modi with RBC.

Yeah. Good morning, everyone. So just a couple for me. Globally, maybe you can just provide some perspective, Tom, on the promotional environment. If you're looking for market share gains to accelerate or improve as the year unfolds, do you expect the promotional environment to moderate as well? Is it getting worse? Did you see that in the quarter? And then the second question is my understanding is that you've taken a price increase or a list price increase on Kleenex. And I'm just curious if you've seen Procter follow at this point? Thanks.

All right. Maybe I'll have Mike comment on both of those, so on promotional environment broadly and then facial pricing.

Yeah, I think the promotional environment is, as you've heard us discuss, I think it's gotten more challenging, and our exception is at this point is that that environment will continue. And so we're going to be prepared to operate in that environment. And I think what we need to do is be competitive with our promotions and the right price points, but be disciplined about how we spent. And so that's the emphasis going forward. With regard to Kleenex, we did do a list price increase beginning of the year, and that has flowed through. I probably won't comment specifically on the profitability impact.

Oh, I was asking on P&G, if P&G has followed in the market?

I'm not aware that there's been any change on their end.

Yeah, I don't believe so.

Yeah. I think the other point, Nik, would be, as we've got innovation coming, you want to use your promotion along with your other strategic marketing tools to drive that. So we've got a pretty strong calendar coming, and so that wouldn't be unusual for us to put more money behind those ideas either.

Great. And just one more thing. I know you guys talked about March getting better versus Jan and Feb, and it just seems like no one really knows what happened in January and February. And I'm wondering if maybe you have any thoughts outside of just a macro comment? Was there anything specific to your business that you saw that really caused the weakness like a dislocation between consumption and inventory or just higher crate spend? Anything you can give us to just get us some perspective around that?

No, I wish I could tell you the clear answer, because then I would have done something about it before now. But it was – and I think everybody was talking about retail store traffic was down broadly. They can't point to weather. There was theories about late income tax refunds. Again, I don't know why that would necessarily affect our category. But, on the other hand, if you're not in the store shopping, you definitely saw that in terms of retail traffic. Now there was some uptick in e-commerce that balanced off a part of that. We are seeing probably, I don't know, Mike, if you want to comment on this, just a little bit less in terms of the fill-in trips may be part of it as some retailers unpacked that. But I think it's still pretty early to figure out exactly what happened.

Yeah, I think when you have this much going on, which is maybe consumer confidence, the e-commerce shift, and then these theories around the tax. I know that perhaps a lot of – we had debates internally about how farfetched the tax refund timing affect is, but certainly in conversations with retailers, I think many of them believed that with strong conviction. And so, I think there's multiple factors that we don't have enough analysis to be able to tease out exactly what happened, but I do think there was some softening that we saw particularly in January and February, and we came out in March a little bit better.

Great. Thanks so much.

Thanks, Nik.

Our next question comes from Bonnie Herzog with Wells Fargo.

Thank you. Good morning.

Good morning, Bonnie.

I just have a couple of quick questions on two of your key markets, China and Brazil. So, first on China, I guess I was hoping you could drill down a little bit more on the pricing dynamics in the market. In the past, you guys have called out currency dynamics versus some of your peers as a key driver behind lower pricing. But I guess it now feels that some of this is also due to general competitiveness in the market. So could you help us better understand the dynamics there? And then on Brazil, could you comment on some of the volume strength you saw during the quarter, which seems to be an improvement versus last quarter? So, curious to hear if you're seeing any improvements in the underlying consumer in Brazil or is this more a reflection of you guys lapping easier compares? Thanks.

Yeah, I think on China, a lot of the pricing was really led by some of our other international competitors over the last couple of years almost, and some of that was probably funded by a weaker yen. But I think that seems to have normalized. In the meantime, this is one of the fastest growing markets in the world, and it's not surprising to see everybody chasing after that consumer growth. And so right now, you've got two big U.S.-based players and two big Japanese-based players all chasing growth in the Chinese market. And I think the good news is that pricing seemed to have stabilized in the quarter, although it was down year-on-year, reflecting some of the things that happened in the first quarter last year. On the Brazil front, part of it was we had a lousy start last year in the first quarter, so our comp was easier in that market, and that was why our volume uptick was there. I'd say the shares we've seen in that market are just Jan, Feb, and we had a stronger March, so you could've had a situation there, where maybe shipments were even a little bit ahead of category consumption. But we'll see when we get the next share data. I don't know, Mike, if there's anything else you want to add on either of those markets?

Well, in Brazil, I think the Q1 Personal Care sales were up high-single digit. And as Tom was saying, we were cycling on a 5% decline in the base period. So volume up, and the net sales price is down slightly. FX obviously contributed a little bit. But the team has really done a nice job, I think, fine-tuning their price pack, competitiveness and getting the right price points on shelf. And I think that's making a difference. The macro factors, I think they are improving slightly, but the environment is still tough. And GDP is still contracting, but maybe at a slower rate. Inflation's a little bit lower than it was this time a year ago, but the consumer, I think, is still pretty well under stress. And then back to China, I think, we are encouraged by I think the performance Q1 on China. I think organic was up low-single digit, but volume was up strong double digits, somewhat offset by lower net selling prices. Pricing environment, as Tom says, has stabilized, but it's consistent with what we've been planning. So we think we still have – we're encouraged about what's happening this year, and think our performance will be good this year in China.

Okay. And then just one final question, if I may, on the promotional environment; a lot of discussion this morning about it, but just wanted to touch on something or hear from you how you think that's going to evolve throughout the remainder of the year or into next, if you think about what's going on with some of the channel shift going to e-commerce. And as these brick and mortar retail partners of yours are feeling increased pressure, how much more pressure ultimately will there be on retail pricing and greater promotions?

So if you have slower growth and you've got lots of competitors facing it that sometimes results in higher promotional environment. And so you're also seeing retailers get creative across the space in terms of do more with click and collect and there's a lot of innovation happening, not just around price, but also around service and how shoppable the categories are in different environments. And so I will expect that that will continue as we roll forward. I don't know, Mike, if there's any other color you've got on that?

No, we've seen this shift occur in other markets, China and Korea particularly, and we've adapted pretty well, in some cases, led that change. And so we need to be as nimble and responsive to the market conditions that we plan to be.

Yeah, and e-commerce does cause great price transparency. On the other hand, retailers have been comp shopping each other's stores in bricks and mortar for 100 years. So it's not a new phenomenon.

All right. Thank you.

Our next question comes from Jonathan Feeney with Consumer Edge Research.

Good morning. Thanks very much. So just two questions and one detail. Tom mentioned lower promo shipment in North America Personal Care and Tissue. And I know you talked a whole bunch about execution. Just what specifically – a lot of it seems like it's category and competitive landscape. So if you can give us like an anecdote or two of what the kinds of decisions you made in Q1 in North America that you'd like to change over the course of the year, independent of and maybe where some of those types of decisions have worked. Second question is, nice volume improvement in China diapers, and do you think maybe some of these lower prices in your clearly premium diaper business are maybe enabling more trade up? And if you could comment on price gaps with mid-lower tier products there and just the details. Tax rate was better this quarter. I didn't see any real change to guidance for the full year. Comment around that. Can you tell us a little bit how that flows over the course of the year? Thanks so much.

It's a pretty comprehensive list there so, on the promo front, maybe Mike can comment a little bit on that.

Yeah. I think, with regard to North America, I think the promo timing, we had a few major events with large customer shift out of our quarter that we knew going into the year, and so we had assumed that. So that explains a bit of the shift. Probably, what was new news to us was probably the more aggressiveness in promotion activity and promotional price points, and that's the one that we're adapting to right now. And again, we're going to manage our business with discipline, but we want to be price competitive in the marketplace. With regard to China, the – oh, sorry.

On China, I think the question was, have you seen any kind of trade up in e-com and I think, broadly, that is the case. We've just launched a super-premium diaper pant in China that we're really excited about. And moms that tend to shop in e-com tend to skew a little bit higher income and so that should be a positive for us. And then the last question...

Thanks. And just tax rate?

...was tax rate, which Maria can comment on.

Yeah. Our tax rate, as we mentioned coming into the year, will be variable by quarter because of the various tax planning initiatives that we do. Our tax rate this quarter was slightly below what we had last quarter before the – I'm sorry – last year first quarter. The full year though we still expect the tax rate to be similar to the full year that we delivered in 2016.

Thank you very much. Comprehensive answers.

Our next question comes from Ali Dibadj with Bernstein. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hi, guys. Thanks for the follow-up.

Hey, Ali. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Just wanted to follow-up specifically on the free cash flow on the quarter being much lower and then you mentioned tax (55:55) to understand a little bit more, but also each element of working capital looks worse too. Can you just talk a little bit more about that and whether even on the inventory being so high, whether we should expect some idling or anything and whether we're that level? So taxes and then working capital. Thanks.

Sure. We expected that our tax payments would be higher this year versus last year not only in the first quarter but for the total year. The driver of that was actually tax benefits that we had last year, which lowered our overall cash tax expense. This year, in terms of cash taxes it's a much more normalized level, so we'll be impacted by that year-on-year. On working capital, working capital was actually good for the quarter; our cash conversion days for 2018 (56:50), which is down four days from the average of last year. The primary benefit there is in payables. In terms of inventory, we clearly have room to continue to optimize our inventory. And both our supply chain teams and our finance teams are very focused on this. We made really good progress on that last year. There'll be some timing effects as we go through the year, but that's an area where we're very focused on it to drive down inventory as part of our overall working capital program.

One difference though. You might be looking just that fourth quarter only working capital number. We tend to compare to the full year average, because there is a bit of cyclicality as the year rolls through. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Yeah, I was looking at Q4, so I didn't quite get that answer, but okay. Okay. Thanks.

Yeah. We were very, very low in the fourth quarter last year. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Okay. Thanks.

Our next question comes from Jason English with Goldman Sachs. Jason English - Goldman Sachs & Co.: Hey, guys. Thanks for letting me on.

Hey, Jason. Jason English - Goldman Sachs & Co.: We obviously cover a lot ground so I just got a couple of quick questions I'll try pound through quickly. First, Mike, I think you mentioned that some promotion shifted out of this quarter. Was that a shift into the fourth quarter of last year or is that a shift into second quarter?

Well, one, I think part of the shift was out of our plan entirely for the year, and then part of it was shifting into the second and third quarters of this year. Jason English - Goldman Sachs & Co.: Okay. So it's a little more programming, as you mentioned, kind of in the second quarter and back of the year, but a lot of comments also in terms of cadence and comparisons. As we look forward through the remainder of the year, as you've highlighted, second half comps get easy. The second quarter comps get really tough, particularly in North America Tissue and Personal Care. And it sounds like the environment's pretty darn challenged. Is it fair to expect the second quarter to look sort of comparable if not a little more challenged than what was seen in the first quarter?

Jason, we don't give quarterly guidance as you know, so I think you can do the math as easy as we can and you're correct in assessing that the comps get tougher in the second quarter. But, beyond that, I'm probably not going to give you any more color on quarterly guidance. Jason English - Goldman Sachs & Co.: Fair enough. And in China, encouraging to hear that sequentially prices are sort of holding pretty consistent with what we're seeing in admittedly limited scope Nielsen got out of that market. As we go into the back half and we comp the price decrease assuming we hold, obviously, year-on-year pricing looks better from there. Should we expect year-on-year volume to decelerate at the same time? In other words, are you seeing the volume lift because of this year-on-year price degradation that's going to abate once the price degradation is no longer there?

No, not at all. The volume actually has been pretty strong throughout and so is it's been more of a function of innovation and category growth and consumer spending power and that we expect those stronger results to come through more clearly in the back half of the year.

Yeah, I'll give you, Jason, a couple of factors why we believe that. One, we do have news, as Tom mentioned, great new innovation in super premium tier 6. Second, the birthrate is increasing. Two years ago, I think the birthrate was about 16 million live births. Last year, we estimated around 17.5 million. And this year, it could be as high as 20 million. And so that's kind of in our favor. And then we're also are expanding our penetration of cities, and we'll continue to add cities in distribution this year. Jason English - Goldman Sachs & Co.: Good stuff. All right. Thanks, guys. I'll pass it on. I know we're out of time.

Thanks, Jason.

At this time, we have no further questions in the queue. Thank you.

All right, we appreciate everybody's time today. We we'll wrap up with a comment from Tom.

Well, once again, we are continuing to execute our Global Business Plan and allocating capital in shareholder friendly ways. And we appreciate your support of Kimberly-Clark. Thanks very much.

Have a good day. Thank you.

Thank you. Ladies and gentlemen, that concludes this morning's presentation. You may disconnect your phone lines, and thank you for joining us today.