Good morning. This is Joyce Brooks, Vice President of Investor Relations. Thank you for joining today's call for a discussion of McCormick's Second Quarter Financial Results and 2014 Outlook. We've posted a set of slides to accompany our call at ir.mccormick.com. At this time all participants are in a listen-only mode. (Operator Instructions). As a reminder, this conference is being recorded. With me this morning are Alan Wilson, Chairman, President and CEO who will begin with comments on the latest financial performance and a business update; and Gordon Stetz, Executive Vice President and CFO, who will provide a more detailed review of second quarter results and our latest financial guidance for 2014. As a reminder today's presentation contains projections and other forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or other factors. As seen on slide two our forward-looking statement also provides information on risk factors that could affect our financial results. It is now my pleasure to turn the discussion over to Alan.

Thank you, Joyce. Good morning everyone and thanks for joining us. Our second quarter results included solid sales growth and strong cash flow, as well as earnings per share that exceeded the outlook that we shared with you in March. While the results varied by region, the overall performance demonstrated progress with McCormick's growth strategies and gives us increased confidence in our ability to deliver our 2014 financial outlook. We grew sales 3% in local currency. Both our consumer and industrial businesses contributed to this increase. Growth in our international markets was particularly strong, including incremental sales from WAPC, an acquisition that we completed in May of 2013. We also drove international sales with pricing actions and with higher volume and product mix driven by product innovation, distribution expansion, and brand marketing support. In our Americas consumer business, sales declined this quarter due to competitive pressure that began to impact our U.S. results in 2013. Also we are comparing to robust year-on-year sales growth of 5% in the second quarter of 2013 for our Americas consumer business. We are addressing the competitive environment in this market, and I'll provide an update later in my remarks. We improved gross profit margin in the second quarter by 60 basis points with our comprehensive continuous improvement program, CCI, which is generating cost savings throughout the company. In addition, our industrial business team increased margins in the product portfolio this period. Sales growth, higher gross margin, and our diligent expense management led to a mid-single digit increase in operating income. While the increase in operating income was in line with our expectations for the quarter, we exceeded our earnings per share projection. This was a result of a lower tax rate and our share repurchase activity. The reduction in shares outstanding through the first…

Thanks Alan and good morning everyone. As Alan has described our second quarter financial results included solid sales growth in many parts of the business, greater than expected earnings per share driven by our growth strategies along with a favorable tax rate and share repurchases activity and excellent cash flow. I'll begin with a closer look at sales and operating income for each segment. Let’s start with the consumer business. As seen on slide 12 we grew consumer business sales 4% in local currency. In the second quarter of 2014 sales from WAPC accounted for six percentage points of the increase and higher pricing contributed three percentage points. These were offset in part by a 5% decline in volume and product mix. In local currency this compares to a 5% year-on-year increase in the second quarter of 2013 which had no impact from acquisitions. In the Americas region sales were down 4% from the year-ago period in local currency, a 2% increase in pricing, following a late 2013 pricing action was offset by lower volume and product mix. In comparison consumer sales in this region rose 5% year-over-year in the second quarter of 2013 from the second quarter of 2012, an increase mainly attributable to higher volume as product mix. As Alan described competitive inroads have affected our U.S. consumer business and we have actions underway to drive performance. Along with early indications of improvement the category growth remains healthy for spices and seasonings and recipe mixes based on the latest consumption data. To a lesser extent we had some second quarter impact from a later start to the grilling season and the timing of our trade promotion activity which will be more skewed toward the second half. In Europe, the Middle East and Africa, EMEA we grew consumer sales…

Thank you. We'll now be conducting a question-and-answer session. (Operator Instructions). Thank you. Our first question is from the line of Ken Goldman with JPMorgan. Please proceed with your question.

Hi, thanks for the question. Alan your Nielsen numbers, they showed a decline but not to the degree you reported domestically. So I guess I am curious if you could help us understand that disparity a bit. Gordon touched on a later grilling season, so I am curious if it was a shipment timing issue or may be channel issue or non-measured, maybe doing a little bit less impressively than measured, I am just trying to, I guess, understand that dynamic a bit better?

It's pretty hard to calibrate all the different sources of information. We use IRI and we have a custom database, so from our outlook I'll talk more generally without trying to get into specifics of the data as to what's happening. From our view, what we saw was less of a decline in share than we saw in the fourth quarter of last year. Partly, we think that some of our efforts at retail are starting to have an impact. It's going to be -- it's going to take some time, and we expect that we will win. But in terms of getting to the data specifics, it's really hard for us to get. There was a later start to the grilling season. The weather was not favorable for grilling. We're expecting a pretty good grilling season as we go through the summer, and we're planning to extend it through the third quarter and even through Labor Day and to tailgate season, so we're pretty encouraged. Most of our new products are going to hit in the second half of the year, and we're pretty excited about those as well.

Thank you. And then if I can ask one more, Gordon we're seeing a good number of packaged food companies thinking about rationalizing production and overhead in the U.S., even mills right, which has an ongoing cost savings program just like yours, I think is going this route. So curious if you guy are considering going down this road or if are you comfortable with your cost structure I guess at the moment?

Well, you always need to challenge yourself to be competitive, and that’s the whole nature of the CCI environment, and the idea behind the program, as you know Ken, when we developed it a few years ago was to keep looking at those opportunities on a go forward basis, and you can never stop. I will calibrate it a bit though in that if you recall a few years ago in the North American businesses in particular, we did some significant rationalization, particularly in the consumer side where we did reduce a number of plants , and so therefore our footprint is pretty consolidated here at the U.S. in our consumer business. In the industrial side, our plants tend to be more specialized for customer service needs, and having said that, we constantly look at our network and the best way to organize ourselves. So we still look for these opportunities all the time.

And we have adjusted our SG&A and headcount for the volumes that we’ve seen in -- both in manufacturing as well as in our headquarters.

Thank you.

Our next question comes from the line of Alexia Howard of Sanford Bernstein. Please proceed with your question.

Good morning everyone. Can I just ask for a little bit more granularity on the share losses? Could you remind us, is it concentrated in a particular region with a particular type of retailer? Is it private label you are losing shares to or value brands or premium brands? And do you know which consumer segments you are losing share to, is it a Hispanic group, is it millennial consumers, or older consumers? Just a little bit more detail on how you are seeing the development of about share changes? Thank you.

Yeah, it has changed a bit in the more recent periods. Private label is more flat. Most of the -- we have one larger branded competitor and that competitor is relatively flat. And so what we are seeing is very small inroads from a number of small and regional competitors that are gaining one-tenth of a share point or two-tenths of a share point. Their overall share base is still less than 1% or 2%, I think as I looked at the most recent period, and of the ten brands that gained share, no one other than McCormick, by the way, our core A to Z actually gained a slight bit in the most recent period, but nobody had more than 2% share in all that. So it's pretty -- what’s happening is the consumer and the retailers are pretty fragmented and some of that’s from the value end, some of that’s from the premium end. We compete across both of those segments. And so we’ve got different tactics that we are using to compete with the super-premium, and in some cases even bag spices that are finding their way into measured markets, and then on the premium end with what we are doing with our innovation.

Great, thank you very much. I’ll pass it on.

Our next question is from the line of Robert Moskow of Credit Suisse. Please proceed with your question.

Hi, thank you. Hey Gordon, I was trying to reconcile the guidance with the operating income being up 6% to 8%, the tax rate down, share count down, we are getting a number that seems to go beyond the high end of your range for EPS at $3.29. I just want to make sure I am doing this right. So is the 6% to 8%, is there -- are we supposed to reduce that for currency or is that 6% to 8% absorbing the currency?

It's getting pressure from currency, I’d say that. But I don’t want to be more specific than that. Obviously currency is going to put some pressure on that number. The other thing on the operating income line, as you heard Allen talk about is, we are supporting our business in the back half of the year. We’ve spent year-to-date $11 million in advertising promotion, and we’ve said at least $25 million in the back half. So that’s going to be a factor impacting those numbers as well. And then just to help calibrate the tax rate, that tax rate un-favorability as you know is very much weighted towards the back half of the year. So that’s also -- something else needs to be factored in, because that all starts to occur, I think our last year’s rate for the second half was a little north of 25%, and at 29.5% that’s quite a drag on the EPS in the back half of the year.

Okay, Gordon I get that, but just to be more clear, your sales guidance is in constant currency. So I know what to do with that and you have a 1% hit for ForEx on the top line. Is it also a 1% hit on the operating income line, does is it flow through and is it 6% to 8% ex-currency or not?

The 6% to 8% is not ex-currency, that's all in. So it would reflect whatever pressure that currency drops through to the bottom line. And generally it's not a one for one relationship but there is certainly a negative hit on that 6% to 8% from currency.

All right, I got it now. So last question, in fourth quarter that's your biggest quarter, especially in the U.S. for seasonal reasons. Are your market share -- do you expect your market share to be down again in fourth quarter in the U.S. Alan or are you going to have lapsed those market share losses by that time, and if we can expect kind of a normal growth pattern for fourth quarter?

We expect to stabilize and start to grow our share but certainly in the fourth quarter we think we will lapped the impact in share from last year.

Okay. So you expect like a pretty good seasonal time period this year. Have gotten initial sell-in already for how much inventory your customers are looking at for the seasons?

Yeah we're selling in right now. The display programs are the easy things for us to track. The turn orders are a little more difficult but we're encouraged by what we're seeing with our holiday sale-in at this point.

Great, thank you.

Our next question is from the line of David Driscoll of Citigroup. Please proceed with your question.

Great, thank you and good morning.

Good morning Dave.

Want to go back to the question that Rob was asking a moment ago about the guidance. I am going to try it differently though. So if all the numbers are unchanged, except we have a nice lower tax rate, 100 basis points of tax if I go from the midpoint of what the prior range was to the new one, that’s worth like a nickel. So the other observation is that the segment results are coming in especially this quarter weaker than what we had modeled. So is it fair to say that within this range of operating income of 6% to 8% that you are now towards the lower end of this and then the tax comes in to give you the confidence to reiterate the range. Is that a correct way to look at these pieces of guidance?

It's certainly from the operating results from the quarter we had puts and takes. We had the strong growth in the international markets and then we had obviously the U.S. consumer results that you saw as we reported. It's too early for us to be that specific. I think all we are saying at this stage is really that we acknowledge that the tax rate is more favorable so that gives us more confidence in the upper end of the range. As we progress through the year, I think our statements around that operating income range we firm those up as we see the traction in the U.S. consumer business and how the programs are playing out as we progress through the year.

All right. I guess I was hoping that you might give me confidence that you actually can hit the upper end of that operating income because of course the second quarter numbers would may be give most people the opposite impression given the declining consumer, I mean which is obviously very concerning.

While we certainly are encouraged as you heard in Alan's comments, by all the programs and activities that we have lined up for the back half of the year. So I don't want to convey that we don't believe we're able to certainly return to a growth mode in that business. But at the same time as you know the third and fourth quarter start to be the biggest parts of our year. So we just have to see how it plays out for the rest of the year.

Okay. Last question just on the tax rate. This is a little specific so apologies for it but it's important, the lower tax rate is it a function of specific discrete benefits or would you describe this as more of a mix issue because obviously when you have the U.S. business under performing it fundamentally has a mix effect on the tax rate. But I would like to understand the difference between the discrete benefits and the mix issue?

Yeah there is some minor discrete benefits and by the vast majority of the adjustments reflects the mix of the geographies across tax jurisdictions.

Okay, thank you.

Our next question is from the line of Jonathan Feeney with Athlos Research. Please proceed with your question.

Good morning, thank you very much.

Good morning Jon, how are you?

A couple of questions. First on WAPC benefits, as you lap the closing the transaction, May 31, do you anticipate still getting kind of desk distribution benefits and then as we go forward will that be reported -- won’t be reported separately but is that going to lift the same store results, I guess of the business? Is WAPC growing on a same-store basis right now?

Yeah WAPC is growing on a same-store basis and we do expect that to continue. It's continuing to expand both geographically and in penetration. And the other thing that we are working and starting to do is to develop some synergies between our core selling force from the coastal region where they sell more of the WAPC items, and the WAPC sales force which will sell more of the McCormick items in the central region. So we are encouraged by the growth rate there and pretty bullish on that business.

Thanks Alan. And one other thing I want to follow up on you had a comment in your prepared remarks about being pleased with the ROI you are getting on the ad spending and media spending you are doing in the, I think that was a U.S. market you are referring to. Could you give us more clarity on how you measure that? And if you are getting positive ROIs does that mean we’ll see more of spending in the U.S. market to sort of turn things around second half of the year?

Yeah, and that’s exactly what we’ve said as well. The way we measure that is with the classic marketing mix and we are looking at the impact on that marketing in the short term. Where we are spending our money is about half in TV half in digital and PR and so we are encouraged by what we are seeing. What you’ll see in the back half is additional support for our big programs like holiday, fall cooking and also some digital initiatives that will help to drive some of our new product sales.

Great, thank you very much.

Thanks, Jon.

Our next question is from the line of Andrew Lazar with Barclays. Please proceed with your question.

Good morning everyone. Thanks for the question. Alan you talked about the market share losses in the quarter, spice and seasoning business not being as significant as they were compared to the fourth quarter. And how did they compare I guess sequentially versus the first quarter? Because I think as of the last conference call you certainly sound relatively optimistic tone at least from an early days preliminary perspective on the reaction to some of the things you are trying to do in the market place. And in this call obviously suggesting making progress but of course still have a ways to go. So I am trying to get a sense of anything has changed from the first quarter? And if so what led to that?

No, I wouldn’t say that anything has changed from the first quarter this year. Results are pretty similar. I will say if there is anything there is a little bit of optimism because we grew share in recipe mixes and have started to see some growth there. But I wouldn’t say that there is a dramatic change from the first quarter.

Okay, and then in terms of seasonal selling and such, I guess the last year or two I may have it wrong, you sort of pushed forward or pulled forward the time frame in which you will sell in a lot of seasonable displays because you found that the sooner those kind of get in store the more folks are charged up around the seasons and end up coming back and such. Is that a program that you are staying with around the timing and for those reasons, or has it already changed based on last year or so?

Yeah we still have the holiday program which we’ve had for, I think about eight or nine years now which is to get the specific displays in the store it is early as possible. Obviously year-on-year we have a lot of fluctuation based on the timing that some specific large customers take their holiday shipments. Sometimes they will be in the third quarter sometimes they’ll be in the fourth, last year because it was also combined with the price increase we had a fairly heavy buy in on that and saw the impact in the third quarter and then the resulting hang over in the fourth. But we're still offering that program. We don’t think it will be as significant this year as it were last year when we are having a price increase.

Got it, right in terms of the shift between quarters.

Yeah. We expected to be and this year actually does look like more of a normalized pattern and we are seeing some of that with our shipments in the second quarter versus the third that are going to be close into consumption.

Thanks and very last thing. This updated sort of ideal shelf set, gold standard shelf set, are there certain -- what are the certain timeframes in which your sales team is able to sort of get this sold in and more importantly that those shells would get reset, either there are certain one or two time frames through the course of your fiscal year where you can really expect once they are sold in for them to start actually happening in store?

Yeah most customers have their own timing. So it's not a there is not a specific time across the country where that happens. Some customers reset generally most customers who want to reset prior to the fall specifically in our category. But we're cutting in new items in January and we're cutting in new items in June. So it's hard to say that this is specific time for that. But where we are, and we're seeing progress in helping customers understand that this is a very, very profitable category for them that our interests are really aligned and the more they sell premium branded products the higher the level of their profit. And we bring consumers to be the shelf and that's the thing that we are working with them on it.

Thanks very much.

Our next question is from the line of Eric Katzman of Deutsche Bank. Please proceed with your question.

Hi, good morning.

Good morning Eric.

I have two questions first top line related to focus on EMEA for a second, is it -- I mean it sounds like the industrial side of things continues to go well there but it almost sounds like from your comments around the UK which is such an important market for you that things have gotten a little bit worse? Is that accurate and if so kind of what are the plans to try to improve the UK?

Yeah the UK market is specifically tough market. There has been a lot of press on the large customers there and some of their challenge is specific to what we're doing in our business. It's very similar to what we're doing in the U.S. with new products and with supporting our brands with advertising. In the short term what we saw was a fair amount of competitive activity and a recipe mix category in the UK we're responding pretty aggressively with our own promotional plans.

All right and then to kind of switch over, I think you've been calling for somewhat inflationary trends in your -- input cost base for a bit but can you update us on that, is there any more concern? It seems like there is just generally a little more inflation than everybody expected. And then related to that you took the price increase last fall I think in retrospect you said may be it wasn't the right thing to do or the right time. And given all the competition even with input cost pressure are you unlikely to take pricing on the consumer side going into '15?

Yeah we're not anticipating any near term pricing, any new near term pricing in our consumer business at this point. We may have some adjustments in our industrial business to reflect changes in commodity costs but we're not anticipating near term that we will be doing that. There is some upward cost inflation specifically in commodities like pepper and vanilla and we're working with our CCI programs to help to try to offset those. Obviously if it gets excessive then we'll readjust our thinking. But certainly we're not anticipating anything before the end of 2014.

Okay and Gordon just remind me what inflation level are you assuming for the year again?

We said it was in the low single digits, 2% to 3%.

Okay. I'll pass on, thank you.

Thanks Eric.

Thank you. Our next question is from the line of Akshay Jagdale with KeyBanc. Please proceed with your question.

Good morning.

Good morning Akshay.

So couple of questions just on the end demand and what you see as it relates to your consumer business, because I think you get some good read through on what's happening with packaged food customers and then QSR. So the first question in the U.S. could you talk a little bit about the innovation pipeline for your packaged food customers as you see it? I think a little bit ago you had said that you’re pretty optimistic about that high price and it doesn’t seem to have played through. So perhaps you could just give us your perspective on what’s happened there with the little bit of history as to why it hasn’t played through if I am correct about that. And then the second question is on the state of demand or state of things in the QSR segment in China if you can help us to understand from your perspective where we are relative to all the issues that have taken place from a food security perspective. So those are my two questions. Thank you.

Yeah, sure. On U.S. foods we are seeing a bit of a mix with our customer base. Our snack customers are continuing to do pretty well and continuing to innovate and we’re seeing that reflected. Our packaged food customers are struggling with core volume and part of the way that they are trying to overcome that is with new product innovation that we are working with them on. Now so what we have was packaged foods or with our consumer food manufacturer customers so far in the U.S. at least is relatively flat; snack are -- co-processed foods, kind of down a little bit and new product not quite offsetting those. We have a stronger innovation pipeline this year than we had at this time last year. So we continue to have a good outlook on that obviously as customers adjust their thinking and focus more on promotional spending or on driving different core products, they may change that. Our innovation pipeline is stronger this year than last year in our U.S. business. In China what we are seeing is a recovery in QSR, driven I think a lot by our customers having an increased frequency promotions and limited time offers to bring consumers back to the stores. They’ve historically been pretty resilient and they are obviously up again some weaker comparisons from last year. But we are encouraged by what we are seeing with both new product activity in China as well as the increased food traffic that they are getting to the stores and we are seeing a renewed confidence in new store openings there as well. So we are optimistic on the outlook there.

And just on India if I can. So can you I know it a smallish percentage of your overall business but it’s one of those rare things where you acquire business and it doesn’t grow as well as you plan. So can you just give us a sense of where we are in that process? And if and when the distribution gains will again start to take effect because the way I understand what’s going on is - you have bought the business, there’s has been some obviously commodity related inflation that you are passing on and you don’t have -- or your distribution gains have sort of paused for now and then you’re also recalibrating your product mix right. I mean the whole idea there is to do recipe mixes and other things such as that under the McCormick brand using this distribution. So just give us a longer term sort of where are we in the journey with this acquisition and your expectations there?

Yeah we think India is certainly a longer term play. We’ve made good progress in stabilizing our supply chain and continuing to drive distribution, obviously the significant inflation we’ve seen in the price of Basmati rice has impacted our volumes there. We’ve again taken the philosophy that we generally take in a market like this that we pay as we go. So as the business earns its ability to invest then we’ll make the investment. So we are focused now on driving profitability in the business and we’ll -- and we are also introducing new products but more on driving the profitability of the business. We still believe as India develops in modern trade, as the infrastructure develops so that would be a very good market for us. It’s taken a little more time than we anticipated as we went into it.

Perfect, thank you. I’ll pass it on.

Thank you. (Operator Instructions). Our next question comes from the line of Chuck Cerankosky with Northcoast Research. Please go ahead with your question.

Good morning everyone.

Good morning.

In looking at your guidance you are talking about an incremental brand marketing spend of at least $25 million. Gordon did I hear you say $11 million of that increase was in the first half already?

That's correct.

Okay, now does that $25 million include consumer promotion activity or is it strictly more what we would call advertising?

The bulk of it is weighted more towards consumer facing advertising. Any traditional promotional around price et cetera would be between gross and net. So that's primarily that is -- that's not primarily -- that is consumer facing increases.

So promotion expenditures would be in addition to it?

Yes, that would be in addition.

And how do you expect that to track this year, the promotion?

From a year-over-year basis not too differently but as you heard in my remarks and some of Alan's remarks some of it is weighted a bit more towards the back half of the year.

All right, thank you.

Our next question is from the line of Ken Goldman of JPMorgan. Please go ahead with your question.

Hey, thanks for the follow up. I don’t think anyone had asked this yet so forgive me if they had. But Alan you talked a little bit about working with customers to get price gap right between branded and private label. I am just curious whether this gap had grown to an unusually wide level and you are just sort of getting back to normal or whether the gap that historically existed may be didn't function as effectively as it used to right? So curious if it's going to narrow to a range that’s smaller than usual or just sort of get back to normal and maybe I am not [inaudible], just curious how you think about that?

That’s actually a really good question. The gap itself hasn't changed that much. I mean it does over periods where we tend to lead with pricing and private label takes a little bit longer to catch up and as do our competitors. So we tend to see a three to six months gap in that. The impact that we're dealing with right now is more where some customers have chosen to take price threshold movement, not necessarily a percentage gap but more price threshold. So for instance they may have crossed from 297 to 309 which is a more significant impact for customers. So we're working to also get price points right so that we maximize the volume and the profit for the customers. The percentage gaps haven't changed that much over the last seven years. They do from time to time but not -- it's not anymore significant. In fact what we've seen in the most recent periods is a little more aggressive pricing on private labels than we've seen on the brand. So by aggressive I mean the price gaps had narrowed a little more.

Great, thanks very much.

Thanks, Ken.

Thank you. I will now turn the call back to Alan Wilson for closing remarks.

All right. Thank everyone for your questions and for participating in today's call. As I wrap-up I’d would like to recognize Chuck Langmead, President of our Global Industrial Business. As previously announced Chuck's retiring at the end of June following 38 years at McCormick. Under his leadership annual sales of our industrial business have exceeded $1.5 billion and profits are up nearly 40% in the last five years. I want to thank Chuck for his service his dedication and his contributions and I wish him all the best. McCormick's 2014 fiscal year is on track to be a record year in sales and profits. Our strategic imperatives around people, growth and performance are driving sales, delivering CCI cost savings and generating higher profit and strong cash flow. We bring the joy of flavor to everyday at McCormick and we believe that we're well positioned for future success. Thank you.