Good morning. This is Kasey Jenkins, Vice President of Investor Relations. Thank you for joining today’s call for a discussion of McCormick’s Third Quarter Financial Results and our current outlook for 2017. To accompany this call, we have posted a set of slides at ir.mccormick.com. [Operator Instructions] With me this morning are Lawrence Kurzius, Chairman, President and CEO; and Mike Smith, Executive Vice President and CFO. During our remarks, we will refer to non-GAAP financial measures. These include adjusted growth margins, adjusted operating income, and adjusted earnings per share that exclude the impact of transaction and integration expenses related to the Reckitt Benckiser Foods or RB Foods acquisition and special charges, as well as information in constant currency. Reconciliations to the GAAP results are included in this morning’s press release and slides. 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 2, our forward-looking statements also provide information on risk factors that could affect our financial results. It is now my pleasure to turn the discussion over to Lawrence.

Thank you, Kasey. Good morning, everyone. Thanks for joining us. Our third quarter performance led by sales growth was incredibly strong with results which continue to differentiate McCormick. We drove double-digit adjusted operating income growth and expanded our adjusted operating income margin that makes seven consecutive quarters of margin expansion. The strengthen in our base business drove adjusted earnings per share growth of 9% versus the third quarter of last year and our results are not the only great news of the quarter. In the third quarter we had an important and exciting milestone for McCormick. We announced and then subsequently closed on our acquisition of RB Foods on August 17. This is the largest deal in our company's history. The acquisition strengthens our flavor leadership with the addition of iconic French's and Frank's RedHot brands to our portfolio which are now our number two and number three brands respectively. This flavorful product portfolio with simple high-quality clean ingredients fits perfectly within McCormick as we continue to capitalize on the growing consumer interest in healthy flavorful eating. McCormick now has leading positions in categories to consumers use most when flavoring fresh foods. Our one-stop shop for condiment, spice and seasoning needs provides our customers and our consumers with an even more diverse and complete flavor product offering. This transaction reinforces our focus on growth, reflects McCormick's commitment to making every meal and moment better, and drives significant shareholder value. I’ll comment more on RB Foods integration and business in a few moments, and Mike will also address our updated fiscal 2017 outlook which includes the impact of RB Foods. But first speaking of our focus on growth, I'm pleased to further discuss our third quarter results and provide some business updates. McCormick's strong third quarter results continue our momentum for…

Thanks Lawrence and good morning everyone. I’ll provide some additional remarks and insights on our third quarter results, provide an update on our RB Foods financing activities and conclude with the details of our updated 2017 financial outlook. As a reminder, our third quarter results reflect two weeks of the RB Foods operations, and three weeks of acquisition related financing costs. Overall, the RB Foods impact to the adjusted EPS was neutral in the third quarter. As Lawrence mentioned, we're very pleased with our strong third quarter results and have good momentum heading into our last quarter of 2017. On a constant currency basis, we grew sales 8%, acquisitions pricing taken in response to higher material costs, and higher volume and product mix each contributed to the increase as seen on Slide 11. Both segments grew sales with the industrial segment being particularly strong. The consumer segment grew sales 5% which is a sequential improvement from the first and second quarter growth. On Slide 12, consumer segment sales in the Americas rose 7% at constant currency with 3% from pricing actions, as well as higher volume and product mix on the base business. Pricing actions were taken in response to commodity increases and the expected elasticity impacts were reflected at volume and mix on this slide. Additional sales were driven by new products, expanded distribution and increases in base unit consumption. Drivers of the sales growth include McCormick and Lawry's brand spices and seasonings, Gourmet Garden and Stubb's products, and McCormick brand recipe mixes. Partially offsetting this growth was sales weaknesses in Zatarain's products. The acquisition of RB Foods contributed 3% in constant currency growth. In EMEA, constant currency sales were down 2% from a year ago. Similar to the first half of the year, the primary decrease was in…

[Operator Instructions] Our first question is coming from the line of Robert Moskow with Credit Suisse. Please proceed with your question.

It's great to see a guidance raise of this size definitely but I have a couple of questions about RB Foods and how it's going in the first couple of weeks. We're looking at Nielsen data that shows at least in measured channels that the growth rate this year was a lot lower than its normal run rate. It looks like pretty low single-digit. So I want to know if you had noticed the same thing or if maybe there is some alternative channels that it's not capturing and whether that had any influence on the two week contribution? And then also on gross margin, there's a lot of scrutiny last quarter on your gross margin and I think a lot of us thought that it would pick up quite a bit in third quarter. Can you help us break out to the extent that RB Foods helped your gross margin in the quarter or was it no impact because I would've thought that would have been very accretive maybe you could help us with those elements? Thanks.

I'm going to start - I’ll talk about the RB sales trends. Then I'll pass it to Mike to talk about the margin question that you've got. First of all this is really early days for us. We have owned the business now, I believe we’re in the fifth week and so we’re really just getting into it. The scanner data that's being reported is in line with the trend that we saw in the business going forward and it reflects the operations of the business before we took ownership of it. We’re really more focused on what we’re going to do with the business in the rest of this year and going forward. So far the integration is going really well. We're making tremendous progress as you know this is something that we’ve done a lot with other deals. And we are increasingly confident about what we’re finding at RB mainly because we’re not finding any surprises. Our understanding of the business is that we thought we had before the deal close is being confirmed through our ownership of it. We're pleased with the strength of the fourth quarter plans that they had already put in place. We got our commercial teams together is really one of the very first things that we did and we continue to be a positive about the business which is what’s reflected in the outlook. Mike you want to talk about gross margin.

Yes, maybe step back talk about RB Foods impact on the quarter and as we talked about really from an EPS perspective there was no impact. The two weeks of operating results we had in there from an operating profit perspective were offset by the three weeks of the debt financing cost. So it didn't have much of an impact on most of the lines from the P&L. It was slightly positive on gross margins but not a whole lot. Our guidance for the year that we raised our gross margin target from 0 to 50 basis points to 25 to 75 basis points so that’s where you see - especially in the fourth quarter that will be coming through. For the base business gross margin, in the second quarter we were down 80 basis points and if you remember we talked about the FX transactional impact hitting us hardest in the second quarter that has eased in the third and you'll see it ease even more in the fourth as FX rates continue to go away. If you look at the gross margin in the third quarter we actually only down 20 basis points. We had sequential improvement and that was really driven by some of the segment mix where industrial - constant currency sales were up 14%. Consumer still strong up almost 5%, but you had some negative segment mix there but overall fourth quarter for the base business we think they’re really strong plans from a CCI perspective which we raised on this call. Our pricing is fully impacted in the fourth quarter and continued FX favorability will help us.

Maybe just one follow-up, is your gross margin in the consumer business from a core standpoint, is that kind of flattish because and therefore if we’re seeing dilution in gross margin it's really just mix or its gross margin and consumer weak as well?

We really only talk about at the adjusted operating profit level Rob, and you can see from our disclosures both consumer and industrial were up nicely this quarter. Our CCI efforts go against both cost of goods sold and SG&A too. So, and as you know we have some components that other companies have in cost of goods sold and SG&A like for in distribution which makes it little bit messy but both segments saw strong operating margin improvement this quarter.

Want to say something else about margins and that is that when we spoke on our second quarter call we talked about there's still some pricing action to come and to response - raw material cost increases. All of that pricing action was taken in the third quarter and is fully in place, so we got full impact of cost in the third quarter but only a partial impact from the pricing which like I said is now fully in place for our strongest quarter of the year.

Our next is from the line of Alexia Howard with AllianceBernstein. Please proceed with your question.

So I guess a couple of quick questions, firstly on the industrial business. It seems as though there was a big surge in profitability this time around, I guess partly because of the operating leverage and the cost cutting and maybe better mix. Is that something - have you just taken the business to a whole new level and we can expect this to be the new sort of base going forward so that’s first question. And then on the e-commerce side, it sounded from your comments I guess recently and so e-commerce is growing phenomenally well for you at the moment. How concerned are you with the Amazon acquisition of the 364 Whole Foods and hence the 365 brand. How do you expect that to play out over time, how confident are you that your market share online and your profitability online is going to be at least as good in the base business? Thank you very much and I’ll pass it on.

So we’ve been talking for the last two years about the work that we’re doing on the industrial business to shift the portfolio towards more value-added and technically insulated into the portfolio which would include flavor, seasonings and also branded foodservice. And we’ve made a number of investments there and some of them are quite visible externally like buying Brand Aromatics and Giotti flavors, others may be less visible on the outside but are quite significant on the inside. We’ve had important customer wins on the flavor side of the business. And so that has been an area of focus that is - we believe is going to drive a long-term improvement in the margin. I know we talked about that like the Investor conference and on other calls. I will say it is lumpy and so - the industrial business does not come in a straight line sometimes it comes in chunks, but that would be I think when you think about the trend in that business this is representative of the level that we’re trying to take the business to. And Mike if you want to comment on that further I’ll let you chime in. On e-commerce you were right that is an area that is a growing tremendously. We had over resourced e-commerce for the last several years because we just believe that it's inevitable that’s going to be an important part of the consumer buying behavior. And we just don't believe that consumers long-term are going to buy groceries any differently than they buy other products. So we leaned in pretty hard on e-commerce and we got some external recognition about it. You mentioned a particular customer. We are trying to get away from talking about that particular – whose name I’m not even saying, that particular customer specifically on the call that has been our policy not to talk about specific customers in the last several quarters just because of the focus on e-commerce, a very large e-commerce customer keeps coming up by name and so I’m going to try and get away from that. But I will say that we’re really positive about the trend line in our e-commerce business, the fact that we got in there early with important e-commerce customers that's given us a great partnership. If you try out some of these home devices for ordering and ask about ordering spices, you’re going to find out that that McCormick items come up at the top. And so we see more opportunity than risk frankly.

Our next question is from the line of Ken Goldman with JPMorgan. Please proceed with your questions.

One quick one for me and then a broader one. I just wanted to make sure I had my arms around all the special charges in particular there’s that 15.4 million of transaction and integration expenses included in other debt costs that I think we’re excluding. Is all of that debt issuance is there anything else in there I’m just trying to get a sense of what's being excluded because I know there is a lot of different moving pieces?

This is Mike. That was the cost setting up the bridge. We didn’t have to fund the bridge which is one of the - we got our debt financing in place that’s one of the reasons that number wasn’t higher but that is exclusively related to setting up the bridge.

And then it doesn’t seem in the numbers that the answer is yes, but have you had any difficulty at all passing along some of your cost inflation to some of your retail customers. I know the business you’re in is quite different I know you have tremendous brands and so again the proof would suggest that the answer is no. But some of your competitors or peers rather in the Food group have suggested that they have had more pricing pressure lately or difficulty passing it on. So just kind of wanted to ask you or take on that if you seen any increased challenges along those lines in the last few months?

There is always a healthy commercial tension and discussions about pricing with customers. And so I’m not going to say that it is easy but I will say that we've really got all over the place. And largely on schedule, we did have a real cost basis for taking the actions that we did. It was very clear to the customer in particular all their alternatives frankly - either had to go up as well, or not able to supply. So we were able to get all of the pricing away and really you know it's actually a rearview mirror thing at this point because the pricing actions that we intended to take were executed in the third quarter.

And there were primarily as you remember we had two large commodity shocks of vanilla and garlic. So those are very well known shortages of supply. Other suppliers couldn't supply vanilla for example. So in those cases very well documented. It wasn't an across-the-board price increase which in this environment is really difficult.

I’ll also say that we have taken several moves on vanilla as the cost of vanilla beans has moved from single digits per pound to well over $200 a pound and that's been well understood in the industry and so their price increases have been accepted. We also modeled a considerable amount of consumer elasticity, and you know some of the increases we took last year we saw less this year might have been a bit higher than we thought as consumers got used to the higher levels of pricing but right now we're actually seeing less elasticity than we've modeled.

Our next question is from the line of Brett Hundley with Vertical Group. Please proceed with your questions.

This is actually Brandon Groeger on for Brett Hundley. The press release noted the industrial business benefited from new products, it expanded the distribution customer intimacy. I was curious where the company is on the computation of creativity program for its industrial business. It’s been said earlier in the year that commercial application might be ready by the end of the year, I was wondering if that was still the case and what the biggest value of the program is, is it more to engage companies in becoming partners at the core maker or is it more related to innovation timing and competitive rate success?

I've got to say this is the first question on this topic that we've got and that’s fantastic. You know this is a game changer that we are very proud of. I think at our Investor Day we talked about this externally for the first time at any depth and we said we would be putting into use. We are actually - we actually do have the system up and running with one particular customer right now. I don't want to say too much about it just yet other than that is very exciting. We intend to talk quite a bit more about this next year at one of the major investor conferences.

And then quickly if you could, can you put any more parameters around the revenue and synergy opportunities related to RB Foods. I'm thinking about flanks, what does it take to get that five share globally or 10 share globally. What's realistic and can you leverage your experience and how long it might take to actually start seeing some material sales growth abroad. We see real opportunities related to this, just kind of looking for some more color on how it all comes together?

I’ll talk about the cost side, then we’ll talk about revenue, synergy in a second. Obviously the cost side we laid out the synergy level with $50 million which we feel comfortable with based on our historical performance with our acquisitions and our CCI program and in the cost of goods sold areas like procurement obviously or an SG&A across the business. On the revenue synergy side you're reading from our playbook, we did see a lot of – one of the challenges for RB Foods in the U.S. was growing internationally. They really couldn't utilize the resources globally. So we have a global infrastructure with over 40% of sales outside the U.S. So, we do see a runway for growth there that - already in U.K. and Latin America but China other areas of APZ, bringing those products both on a foodservice and a consumer side.

I’ll just add to that that our financial model was not dependent on growth in the international business. We did model growth in the international business and we saw there is an opportunity but the bulk of the financial return that - has to come from performance in the Americas and to our growth internationally is really upside to that model to justify the deal on the first place. We see the opportunity to make Frank's RedHot the number one hot sauce in the world as a real goal.

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

Wanted to ask you guys just one big picture question if you could just simply state what is the different pieces that have gone into the guidance change today. Since I’m getting a lot of questions about the impact of the acquisition and the real improvements that we’ve seen in industrial and the gross margin changes. But just like to hear from you how do you guys think about this increase in guidance for topline and bottom line and really just what are the factors driving the increase today?

And really - like I said before the RB business didn't have much impact on the third quarter. It is going to have a nice impact on the fourth quarter but what we’re really excited about is our core business. Through the three quarters you can see that the numbers on a net sales adjusted operating profit and EPS very strong. Our guidance for an EPS is 4.5 to 4.13 this is when the time of the year we normally narrow the range. And given the fact that we’re at or above our net sales targets and guidance our – adjusted operating income guidance for the year were above that and at the high-end of our EPS range. The core business we would have brought that up at the top of the range. So you can model that at 4.12 to 4.14. You can then do the math at the remainder of the call up due to the RB Foods business impact in the fourth quarter. The key point of RB Foods it's very seasonal business. 30% of the sales are in the fourth quarter, high margins in the fourth quarter just like our businesses at McCormick. There is a lot of holiday items have a higher margin which is good for us. So there is a nice impact in the fourth quarter for us. The interest expense as you know happens on a quarterly basis 25, 25, 25 so that accentuates the RB impact in the fourth quarter this year. On top of that too, we issued shares for this as you know 6.5 million shares based on average shares outstanding calculations only about a quarter of that gets into this year the whole impact is into next year. So what you see is while we’re still saying it’s a 5% cash accretive over a 12 month first year basis, that’s pulling some of that into the fourth quarter. So its little lumpy but we’re really pleased I hope I gave you kind of the color behind why the fourth quarter - what our full year call up is but I want to also emphasize the core underlying business is doing very well.

And just one detailed follow-up, I believe you said in the script that the amortization expense for the RB Foods transaction was reduced by, I think more than half. Can you just say what happened there caused that revision of that magnitude?

No, there were couple of things obviously - when an acquisition is big you use a lot of external people to help value things. A couple things we had initially when we thought there probably be a value on a non-compete with the previous owner. But based on analysis and the understanding we didn't have to put an intangible value on that. Also I think some of the other assumptions on the values of some of the brand intangibles or customer relationships and things like that moved around based on some of the modeling we did. So we’re a little conservative I think overall on that, but we wanted to make sure we corrected that as we learn more, more about the business to and Lawrence we only owned now for six weeks. And that is a preliminary valuation to as my controller is thinking right now. So I want to make sure of it, but $8 million to $10 million range is a good estimate for now.

Our next question is from the line of Adam Samuelson with Goldman Sachs. Please proceed with your questions.

So maybe following up on David's question on kind of the base business and I appreciate the kind of commentary that you would had your based guidance kind of moving like a 412 to 414 range or so based on the year-to-date performance for the organic. Would your base business sales expectations have actually changed or have they changed it’s somewhat unclear based on the revised guidance's?

They’ll be at the high-end of the range.

Okay.

They'll be at the high-end of the range on the base business and then if you do the math they have seem to have a really good fourth quarter and strong fourth quarter really and we talked in the past - back half of the year we’re going to have a strong new product sales, lot of launches in the U.S. market with liquid gravies and our breakfast platform. You look at industrial last year was a little weak we’re expecting a strong fourth quarter there and we’re laughing EMEA consumer some of that challenge we had earlier in the year. So we feel strong sales on the core business.

I wouldn't underestimate the sequential improvement that you’re seeing in our sales also because these are - not up against soft comparisons, these are up against strong comparisons from a year ago.

And that was the kind of the follow-up that was the understanding there is a mix between the different business. And so is it both consumer and industrial or is the confidence in some of the new product launches and momentum into the holidays on the consumer side specifically in the U.S. and maybe the comps on EMEA?

It’s confidence on both of our segments - it’s broad-based.

And then in the industrial business on the margin side clearly some very sizable year-on-year margin gains that drove a lot of the corporate EBIT growth. Can you almost think about – some of the more drivers – the Giotti mix and then – just the customer acquisition raw materials I mean just help us think about a little more of the variances there – it’s a sizable increase of that business?

I mean it’s all the above - we talked about I mean Giotti as we talk about strategy moving up the value chain higher end flavors do help us, strength of our branded foodservice business which is higher margin business again we talked about strength in North America for that so that that helps us, combination of CCI initiatives across those businesses help. So it seems like a big number but it's all those above and they seem to be firing on all cylinders now. It is lumpy as Lawrence said you got to be little careful to project forward all these great results but they had a good couple quarters now, we’re still confident with the visibility to new product pipeline and the margin increasing activities will continue.

I want to be clear that big driver especially over the taking the quarter out of a – but thinking long-term is the portfolio shift. There are different categories more value added then others we’ve really focused on the more value-added areas that have technology as an element or our branding as an element to create value.

Our final question is a follow-up from the line of Robert Moskow with Credit Suisse. Please proceed with your questions.

Actually for Mike, I think you were trying to be very clear that the fourth quarter for RB Foods will provide a lot of that first year accretion. It’s about $0.11 is the implication. And I think if you go by this 5% kind of accretion guide, I think that's about $0.20. So can I assume that the difference there this extra $0.09 would help your normal algorithm for 2018 kind of something a little extra to your normal algorithm for 2018, I know you don’t want to give 2018 guidance but can't blame you.

No I don’t want to give - you’re correct Rob. And I’ll be a little careful I mean that right to the 11 number if you do the math it's actually 7 to 11, you can range the RB impact based on what I said. But as similar to ours, it does have seasonality the first quarter just like our business is the smallest of the year but you're right we’re going to get to that 5% which you have to model in is getting - we’re going to have 133 million shares outstanding all of next year. The math the way it works this year is like 128.5 million or so. So you're getting that a little bit headwind in those first three quarters and actually the whole year from this. So just remember that.

Yes but I do want to lose the threat we talked about 5% accretion as we've gotten it we see no reason that we’re going to miss that 5% accretion and that was 5% accretion over the first 12 months not of fiscal 2018. So with this quarter and the first three quarters of 2018 this is as much guidance as I guess we’re going to give on 2018 at this point, but those things - that time period - is what we said we we’re going to get 5% accretion and we still believe we’re going to do so.

Just mathematically though it's got to help.

The CEO should not be talking about accretion I’ll give it back to Mike.

But mathematically it's got to help you in 2018 just in terms of the numbers.

Definitely. There is no question, it's incremental to our base business.

It plays a little bit with the percentage growth rates and then remember when these more shares are coming through - this 6.5 million shares full impact does create a little bit of headwind on a percentage growth base just from bottom line.

Thank you. At this time, I will turn the floor back to Lawrence Kurzius for closing remarks.

Well, thanks everyone for your questions and for participating in today's call. McCormick is a global leader in flavor, a growing and advantaged business platform which is now even broader with the addition of RB Foods. We're continuing to capitalize on the global and growing consumer interest in healthy flavorful eating, the source and quality of ingredients, and sustainable and socially responsible practices. We're aligned with the increased demand for great taste and healthy eating and are confident in our growth plans. With the steadfast focus on growth, performance and people, we're building value for our shareholders and are well-positioned to deliver even stronger financial results we've outlined today for 2017.