Good morning and welcome to the Mondelēz International second quarter 2016 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Mondelēz management and the question-and-answer session. I'd now like to turn the call over to Mr. Brian Gladden, EVP and CFO of Mondelēz International. Please go ahead, sir. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Great, thank you, Paula. Good morning and thanks for joining us. Before we get started, I wanted to take a moment to thank Dexter Congbalay for his many contributions to our company throughout the years, including most recently running both Treasury and Investor Relations. As most of you know, Dexter will be leaving us this month. He's been a trusted partner. We'll wish him the very best both personally and professionally. I'd also like to introduce Shep Dunlap, who has joined us as our VP of Investor Relations. Shep brings a great set of skills and experience, and I'm sure you'll enjoy working with him as he settles into his new role here. With that, let me turn the call over to Shep to get started. Shep Dunlap - Vice President, Investor Relations, Mondelēz International, Inc.: Thanks for the introduction, Brian, and I'm happy to be here. Earlier today, we sent out our earnings release and presentation slides, which are also available on our website, MondelezInternational.com. As you know, during this call, we will make forward-looking statements about the company's performance. These statements are based on how we see things today. Actual results may differ materially due to risks and uncertainties. Please refer to the cautionary statements and risk factors contained in our 10-K and our 10-Q filings for more details on our forward-looking statements. Some of today's prepared remarks include non-GAAP financial measures. You…

Your first question comes from Chris Growe of Stifel. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Hi, good morning. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hi, Chris. Irene B. Rosenfeld - Chairman & Chief Executive Officer: Hi, Chris. Christopher Growe - Stifel, Nicolaus & Co., Inc.: Hi. I had just two questions for you, if I could, to start off. And the first question I wanted to ask was just in relation to your developed versus developing market growth. This quarter seemed to show a little softer growth in developed markets actually. I had expected a little bit of pressure in Brazil and some of those markets, and you certainly cited those. But overall emerging market growth was about consistent with where it was in the first quarter. Do you expect that to weaken a bit as it goes to the second half as some of these markets are more challenged? And is it developed markets then pick up a little bit in the second half of the year from where they are currently? Irene B. Rosenfeld - Chairman & Chief Executive Officer: Actually, I think, Chris, you have to separate – I think your assessment about emerging markets is correct. Obviously, we're feeling like – having watched what's happening, particularly in Brazil, we're seeing more softness there than we had anticipated. But I'd say in our developed markets it's really all about North America. And Europe is actually continuing to improve sequentially. We're seeing strong vol/mix performance. We're seeing nice performance on share. And so the big change is really on our U.S. biscuit business, whereas we mentioned we saw some very aggressive trade spending from some of our competition. It is not helping to grow the category, but we certainly are responding.…

Your next question comes from Bryan Spillane of Bank of America.

Hey, good morning, everyone. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hey, Bryan.

Just wanted to ask, I guess, a more broad question about capital allocation, and completely understanding that you can't talk specifically about Hershey. But one question that we've fielded quite a bit over the last few weeks has been just from a broader perspective, Irene, that you're at a point now where you're considering doing a relatively good-sized acquisition. Can you just talk to how you get to that point? Is it because the company is at a point now where you feel like you're ready to make a – can take on a transaction like that? Does it make a statement about what you think maybe the medium or longer-term outlook is for some of the categories, given what's changed in emerging markets? Just some context or color in terms of how you got to the point where you're ready to at least contemplate potentially making a large transaction. Irene B. Rosenfeld - Chairman & Chief Executive Officer: So, Bryan, our capital allocation strategy has not changed. And as I said in my remarks, we have no additional comments on the Hershey situation.

Okay; thank you. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Thanks, Bryan.

Your next question comes from Andrew Lazar of Barclays

Morning, everybody. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hey, Andrew.

Two things for me. One, the move into China with the Milka brand -- I guess my question there is following on to Bryan's really is more about timing. I guess why is now the right time for something like that? Are there capabilities now that you didn't have before that you have now? Is it there's more clarity on productivity efforts that enable the investment at this point? I'm really trying to get a better read on the timing of this announcement because obviously the white space here in China in chocolate has been around for quite some time. Irene B. Rosenfeld - Chairman & Chief Executive Officer: So we have been planning this for some time, as you said. And one of the most important poles in that tent is local production. And so we have a factory now up and running in Suzhou, and it's ready to go. We have continued to monitor the marketplace to understand the opportunities, both in terms of our portfolio as well as in our channels. And obviously, e-commerce is an important channel for us in China, and our partnership with Alibaba is a critical piece of our launch plan. So it was, frankly, just the opportunity to get all the various elements together for the launch plan. But we think it is quite representative of the growth opportunity that we see in a number of our emerging markets.

Okay. And then 2Q gross margin came in I guess a little below what we had been modeling. I realize there was less of a benefit from mark-to-market, but I think gross margin comps do get tougher in the back half. And I know this is supposed to be a very big year with respect to supply chain efforts, and we're seeing some of that come through. So I guess is 2Q the way we should be thinking about gross margin expansion for the next few quarters, or are we likely to see the rate of year-over-year change for gross margin improve moving forward? Brian T. Gladden - Chief Financial Officer & Executive Vice President: Look, I guess, Andrew, I would say if you look at the quarter, maybe I'd start with year-to-date gross margins up 150 basis points ex-mark-to-market, the quarter ex-mark-to-market up 70 basis points. Developed markets have been very strong on gross margins. I think in the quarter, you would have seen some challenges in terms of keeping up with currency-driven inflation in a couple markets. Brazil is a good example. EEMEA is a bit of a challenge in terms of volume leverage. So I would tell you, as we've said and as we shared in the conferences, this is going to be primarily a gross margin driven continued margin expansion. The supply chain work that we're doing is still significant. We feel great about that. The net productivity was very strong. And I think gross margin will continue to be a driver of the margin expansion for us.

Okay, thank you.

Your next question comes from Matthew Grainger of Morgan Stanley. Matthew C. Grainger - Morgan Stanley & Co. LLC: Good morning, everyone. Thanks for the questions. Brian, I guess I wanted to ask first about your revenue management efforts. My sense is that you're still in the relatively early stages of analyzing and starting to unlock some of those efficiencies. So as you talked today about the need to reinvest back into trade in the U.S. and a few other markets, should we really expect trade optimization to have a meaningful impact on price/mix dynamics or margins this year, or is it something that you're looking at over more of a multiyear timeframe? Brian T. Gladden - Chief Financial Officer & Executive Vice President: I wouldn't really change anything from what we've said. It continues to be a large spend for us and a big opportunity. We've mobilized resources and analytically are better understanding our trade spend now on a global basis. And I would say we continue to look for opportunities to more effectively manage that spend. In some cases, it's going to allow us to reinvest those dollars in important markets where we think that's necessary to drive growth and good margins. Really for us, it's about balancing share and customer relationships and margins, and that's going to be an important part of how we manage the overall growth of the business and the margins of the business. So nothing's really changed in terms of what we're doing. The activity and the initiative is on track. And I think you'll always see us selectively reinvest trade spend where we have to where we think that's a prudent decision with good ROI. Matthew C. Grainger - Morgan Stanley & Co. LLC: Okay, thanks, Brian, and just one follow-up on…

Your next question comes from Robert Moskow of Credit Suisse. Robert Moskow - Credit Suisse Securities (USA) LLC (Broker): Hi, thanks for the question. I think this is the second quarter in a row where you've said that you're increasing A&C support. But I'm having a little trouble understanding quantifying that and then figuring it out as a percentage of sales. Is it going up? Because – and then you also said you're increasing trade promotion in certain areas. So just in terms – maybe I could break it out this way. Internally, are you telling the organization that you're putting more money into marketing than you thought in the beginning of the year, like consumer marketing, and at the same time also more into trade promotion simultaneously? Thanks. Irene B. Rosenfeld - Chairman & Chief Executive Officer: I guess, Rob, it varies a little bit by market. But I think overall we are getting good returns on the A&C investment, and that's why we continue to make those investments. Our A&C is above 9% of revenue. You won't have visibility to that right now, but we continue to see A&C as a critical driver of our brand equities. And certainly as you start to see the recovery in places like the UK, Germany, India, Australia, EU biscuits, it's all reflective of the investments that we're making. And so those are the kinds of places that we will continue to make investments as well as in digital marketing. That said, there are selected hot spots that we've talked about, particularly markets like U.S. biscuit and Brazil where our price gaps are not where we want them to be. And so we are going to invest some trade back in that business, but that's not going to be without A&C support to continue to drive the longer-term brand equity. So net-net, we are increasing A&C in those places where we feel we're getting an adequate return, and that's an important part of our algorithm going forward. Robert Moskow - Credit Suisse Securities (USA) LLC (Broker): Okay, thank you. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Thanks, Rob.

Your next question comes from David Palmer of RBC Capital Markets.

Thanks. Good morning, everybody. As a follow-up on that trade promotion question and also throwing in SKU rationalization, can you provide any specific examples of changes that you've been making? And have your expectations around trade promotion spending changed for this year given the competitive environment you just laid out? Brian T. Gladden - Chief Financial Officer & Executive Vice President: For sure, David. I think the reality is we are seeing a little bit different environment where not only we're a bit weaker in terms of category growth in some markets, but seeing how competitors play. And a couple examples we called out in the discussion are North American biscuits and Brazil, where we've seen more aggressive competitive trade spend that's affected our shares and our growth. So that's clearly a place where we're redeploying trade spend. And I would say we're finding, to the first part of your question, we are finding opportunities to free up some dollars in other trade spending we do across the business and realign it in those markets, which is going to be important given the environment that we're seeing.

Are there any specific examples that you can cite in terms of bigger buckets that have changed with regard to trade promo spending and SKU rationalization? Brian T. Gladden - Chief Financial Officer & Executive Vice President: SKU rationalization has been ongoing. That's a contributor as much to what we're doing on net productivity and supply chain reinvention. So without getting into specific details on where we might be cutting trade spend or specific accounts, I'm not going to probably get into that.

Thank you.

Your next question comes from Jason English of Goldman Sachs. Jason English - Goldman Sachs & Co.: Hey, good morning, folks. Thank you for the question. I wanted to circle back to Rob Moskow's question in terms of A&C spend. Can you give us the specifics in terms of what advertising within SG&A has done year to date and what your expectation is for the full year? Irene B. Rosenfeld - Chairman & Chief Executive Officer: Jason, we'll give you that number at the end of the year as we always do in our 10-K. But again, advertising is an important component of our overall brand equities. We will continue to look to make sure that our share of voice and share of market are well aligned. And I've been very clear about where the key markets are where we're making those investments. But we will continue to monitor the returns that we're getting on those investments, both near term as well as over the longer term. Jason English - Goldman Sachs & Co.: Okay; let me try another one then. Let's talk price real quick. I appreciate that vol/mix has gotten better. Comparisons certainly are more favorable going forward. But price is sliding a little bit. It sounds like the trajectory on the forward is even weaker, which isn't inconsistent with what we're hearing from other companies. Is that consistent, though, with how you're looking at the world right now? Irene B. Rosenfeld - Chairman & Chief Executive Officer: Look, covering costs with our pricing is critical to our algorithm, as you know. And so it is our intent to continue to price to offset higher input costs, particularly those that are common to industry. And currency in particular continues to be a headwind for us in most markets…

Your next question comes from David Driscoll of Citi.

Great, thank you and good morning. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hey, David.

Brian, just a minor, minor thing -- apologies here. You said $0.08 on the FX impact. I think your slide actually says minus $0.09. Did you just misspeak, or is it – which one is it, $0.08 or $0.09? Brian T. Gladden - Chief Financial Officer & Executive Vice President: It's $0.08, and if the slide is wrong we'll get it fixed.

No worries; it's minor. Just want to make sure I'm writing the right things here. The big picture, I'd just like to go back to the capital allocation and just at least give it a try, see what you think of this question. But if the margin upside is as good as laid out and if there is more to come after 2018, why not just take the capital and buy back stock and execute the margin improvement program? Wouldn't a large acquisition require the sale of equity, which is presumably under-earning right now? And then I just want to say, Irene, that I'm really trying to make this not a Hershey question, and I totally understand your sensitivity. I'm really trying to focus on the margin potential side of this and how big is that margin potential over time. And then lastly, I'd just note this builds on the big margin changes that we've seen at the peers with some announcement for bigger margin expectation having just gotten rolled out. So it's incredibly topical. Thank you. Irene B. Rosenfeld - Chairman & Chief Executive Officer: So, David, we really believe our point of difference versus other companies is our ability to grow on both the top and the bottom line. We have an advantaged set of assets both in terms of our brand portfolio, our routes to market, as well as in our overall geographic footprint. And we will continue to invest in those assets to drive long-term growth. In the near term and frankly over the longer term, the funding source for those investments will come from continued margin expansion. And as you rightly point out, we see opportunity, as you've heard from us this morning. We continue to see opportunities to deliver margins in the 17% to 18% range in 2018, and certainly we will continue to see opportunities beyond that. So margin remains the source of expansion to the bottom line as well as a source of funding for us to continue to invest in our brand franchises. Even as our global categories have slowed, snacking categories are growing at a much faster rate than other food, and we continue to see the long-term potential of investing in that growth opportunity.

Okay; I'll leave it there. Thank you. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Thanks, David.

Your next question comes from Alexia Howard of Bernstein Research. Matt Romariz - Sanford C. Bernstein & Co. LLC: Hi, this is Matt Romariz standing in for Alexia. Good morning. Thanks for the question. And I was just wondering if you could give us a brief update on your China business. You mentioned the initiative of launching chocolate there now. Basically, it's broad-sized within the APAC segment. Is its profitability broadly in line with the segment profitability we see? Just general color in the China business would be nice. Thank you. Irene B. Rosenfeld - Chairman & Chief Executive Officer: China is an important market for us. We have some of the most attractive gross margins in that market of any of the emerging markets in the world. But there's no question that the economy has weakened, and that's contributed to slower growth of our categories. And so we have continued to selectively invest in marketing support in our power brands and in particular in e-commerce, as the fastest growth in e-commerce is occurring in China. And we actually see close to 10% of snacks being purchased online, and it's one of the drivers of the partnership that we struck with Alibaba. So we really believe that strong programming we have on our core franchises, biscuit and gum, together with the launch of China will help us to continue the momentum in that market. But near term, we do remain cautious, given the economy. But there's no question as we look at the long-term profile, the growing middle class, the urbanization of the population, and the opportunity for continued distribution gains, China will continue to be an important part of the growth story. Matt Romariz - Sanford C. Bernstein & Co. LLC: But any ballpark numbers for profitability that you can share? Irene B. Rosenfeld - Chairman & Chief Executive Officer: We are not providing profitability by country. Matt Romariz - Sanford C. Bernstein & Co. LLC: All right. Okay, thank you.

Your next question comes from John Baumgartner of Wells Fargo.

Good morning, thank you. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hey, John. Are you with us, John? We lost you.

Okay, he may have got disconnected.

Can you hear me?

Okay, John. Go ahead.

I'm sorry, sorry about that. I'd like to ask about the power brands and that the rate of growth there has really moderated from solid mid-single digits the last two years down to 3% this quarter. Can you walk through what's behind that deceleration? And maybe specifically the extent that you've already realized some of the easier distribution gains, and now it's just a slower build going forward, or is it really just tied back to biscuits and the macro issues in general? Irene B. Rosenfeld - Chairman & Chief Executive Officer: I would say it's the latter, John. There's no question that if you think about our overall share performance, we're only down 0.3 points of share in the U.S. biscuit. But given the size of that market, it has a profound impact on our overall performance. And so there's no question that getting that U.S. biscuit business back growing again more significantly is a critical piece of our overall performance. But our power brands will continue to be the growth drivers of our overall portfolio. They carry higher margins. They grow at a faster rate. And we expect that we are now over time continuing to put them on advantaged assets through the work we're doing in supply chain reinvention. And so the Q2 numbers were largely impacted by the U.S. biscuit situation. Brian T. Gladden - Chief Financial Officer & Executive Vice President: And there are big power brand exposures in some of the emerging markets that have slowed, John, so it's really the macro.

But the white space opportunity is still just as strong as it's been going forward? Irene B. Rosenfeld - Chairman & Chief Executive Officer: Absolutely, absolutely.

Great, thank you.

Your next question comes from Kenneth Zaslow of BMO Capital Markets.

Hey, good morning, everyone. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Hey, Ken. Irene B. Rosenfeld - Chairman & Chief Executive Officer: Hey, Ken.

I have two sizing questions in terms of the new markets. When you think about China and the chocolate market, you said that gum is growing to about a $200 million business over a four-year period. Is that the right metric to think about it and how big this white space opportunity is? Is it bigger than that? Can you just size the opportunity for us? Irene B. Rosenfeld - Chairman & Chief Executive Officer: I'm not going to give you our business proposition. But again, we see it as a very attractive market. And frankly the opportunity, many of the players in that market have not performed particularly well of late, and so we see it as a real opportunity for us to take some leadership and get the category growing faster.

Okay, all right. And then the second question that I have is when you think about the online business, I think you said $1 billion in 2020. Is that all incremental? Does that take away other business? How much of that do we actually think of as truly new business? Is there a way to parse that out as well? Irene B. Rosenfeld - Chairman & Chief Executive Officer: Obviously, it's early days, Ken, and so I think it's hard to tell you exactly how incremental it is as consumers shift their behavior from more traditional channels. It's not going to be 100% incremental. But there's no question that we have the opportunity as we look at the kinds of items were offering in those channels as well as the nature of the consumption occasions that the consumer is using those channels for, be it gifting or subscription opportunities, that clearly will be incremental to our base business. And so it's one of the reasons we're so encouraged about that opportunity and have chosen to invest significantly behind it.

Okay. I guess what I'm trying to get at is I understand that this year is a little bit weaker in terms of sales growth relative to your long-term expectations. But are there other legs to the stool like these that you expect to see acceleration? Is that the way to think about it? Is that how you see white space opportunities in these growth algorithms, and that's how you're going to get back to that higher level of growth? Is that the way to think about it? Irene B. Rosenfeld - Chairman & Chief Executive Officer: I think the opportunity is both white space in terms of our category participation as well as our channel participation. As we look at emerging markets, for example, we still see growth in the traditional trade. And so part of our investment in route-to-market in areas like Brazil or India or even China as we think about getting outside the main cities is designed to access those consumers and that consumption that we don't cover with our participation in the modern trade. So it's both white space with respect to brands and innovation opportunities as well as with respect to channel.

Great, I really appreciate it. Thank you. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Thanks, Ken.

We have time for one more question. Your final question comes from Jonathan Feeney of Consumer Edge Research.

Good morning, thanks for getting me in, just a couple quick ones. First, if you look at what Hershey did recently in China, it actually extends the milk chocolate Hershey brand to a lot of different places. They've recently had to significantly retrench their growth expectations. So looking at that and maybe how much penetration and competition there is in the chocolate business, what it is about Milka that makes you think it's a good time right now to launch in China? And secondly, if I can, what is it about just this fascinating 10% or so of snacks being bought in China via e-commerce? What is it that's going on in that market that makes that consumer want to buy snacks through your Alibaba partnership, e-commerce in general? And can you bring that to North America, to Latin America, other markets in a way where Mondelēz can well outpunch the competition in that channel? Thanks very much. Irene B. Rosenfeld - Chairman & Chief Executive Officer: So, Jon, let me answer the second question first, which is absolutely we see the opportunity. There's no question. There are different models within e-commerce. Alibaba is much more of a single-item model versus some of the models that we see with some of our traditional retailers in the developed markets that are more just a market basket approach to a way to buy their normal purchases. So we see every opportunity to learn from the experience we're having with Alibaba and bring some of the unique items, some of the subscription opportunities for brands like belVita, for example, to the online space and to drive our growth. And that is the big opportunity that we see. We are certainly learning a lot from the various partnerships that we have around the world. With respect to chocolate in China, we have studied this for quite some time. The Chinese consumers love brands with personality. We've done a lot of testing with the consumer, and our Milka bundle is a very unique bundle. The purity of Alpine milk together with some of the assets that you're familiar with, the Lila cow, for example, are really positive with the Chinese consumer. And we have every expectation that we can actually bring growth back to this market with the launch of Milka.

Great, thanks very much. Brian T. Gladden - Chief Financial Officer & Executive Vice President: Thanks, Jonathan.

Thank you for your participation in today's conference. This does conclude today's conference call. You may now disconnect.