Welcome to the Q4 and Full Year 2015 Stanley Black & Decker Earnings Conference Call. My name is Stephanie, and I'll be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to the Vice President of Investor and Government Relations, Greg Waybright. Mr. Waybright, you may begin. Greg Waybright - Vice President-Investor & Government Relations: Thank you, Stephanie. Good morning, everyone, and thanks for joining us for Stanley Black & Decker's Fourth Quarter and Full Year 2015 Conference Call. On the call in addition to myself is John Lundgren, our Chairman and CEO; Jim Loree, our President and COO and Don Allan our Senior Vice President and CFO. Our earnings release which was issued earlier this morning and the supplemental presentation which we will refer to during the call are available on the IR section of our website as well as on our iPhone and iPad apps. A replay of this morning's call will also be available beginning at 2 p.m. today. The replay number and the access code are in our press release. This morning John, Jim, and Don will review our fourth quarter and full year 2015 results and our 2016 outlook followed by a Q&A session. Consistent with prior calls we are going to be sticking with just one question per caller. And as we normally do, we will be making some forward-looking statements during the call. Such statements are based on assumptions of future events that may not prove to be accurate, and as such, they involve risk and uncertainty. It's therefore possible that actual results may materially differ from any forward-looking statements that we might make today…

Thank you. We will now begin the question-and-answer session. Our first question comes from Nigel Coe with Morgan Stanley. Your line is open. Nigel Coe - Morgan Stanley & Co. LLC: Thanks. Good morning, guys. Just one question in line with the rules. Obviously, the Tools & Storage performance in 2015 was exceptional. A big part of that was SFS 2.0 and the innovation pipeline. I'm just wondering how does the NPI look for 2016? And maybe just comment on the share gains in Europe; any categories to call out there? James M. Loree - President & Chief Operating Officer: Sure. It's Jim. The innovation pipeline for Tools & Storage is as robust as it has been at any time since the merger. And what we've been focusing on, if you rewind to 2010 when we put the companies together, there was a lithium-ion problem, they were losing share, we inherited that. Fortunately, they had done a fair amount of corrective action that began to manifest itself shortly after the merger and we started regaining share. And then we, after a year or two of that, really came out strong with the DC brushless, a complete redesign of the DC brushless products. And that became the fastest-growing segment of cordless, and we were growing at about 2x and still are growing at a very rapid rate vis-à-vis competition. And then at the same time, there was a lot of, call it, incremental innovation going on in Hand Tools & Storage in revitalization of the Black & Decker brand and product lines, the Consumer Products and accessories as well. So there's been a lot of, I'd call it, broad-based but relatively small-scale innovation in addition to the lithium-ion gains and then the DC brushless gains. So that's all really what's driven…

Our next question comes from Shannon O'Callaghan with UBS. Your line is open.

Good morning. Hey, in terms of Tools & Storage, the outlook for U.S. construction still positive. Maybe there and just for the broader company that we're getting this offset now from Industrial, can you sort of frame and provide a little more color on the magnitude of the drop-off you saw there in 4Q and what are your expectations for the drag from Industrial in 2016? John F. Lundgren - Chairman & Chief Executive Officer: Yeah. Shannon, this is John. Industrial markets are slowing down. That's the bad news. The good news is, it represents about 20% of our total business, 25% I guess with Industrial Hand Tools within Tools & Storage. But if I can kind of address, I'll say, the elephant in the room, you're very polite or diplomatic about it, but I think I can answer your question quite helpfully. We strive to grow at two times the rate of the market in our Tools & Storage business over the long term. And we've met or exceeded that objective over the past two years, as Jim just described, as the SFS 2.0 growth initiative started to gain traction. And this being said, I don't think it's realistic to plan such outsized growth each and every quarter from any global diversified industrial. So in the fourth quarter, organic growth was lower than we planned, but the shortfall was in areas you'd expect, and a lot of information from Jim and Don, but to try to summarize it, we did have lower industrial channel volumes in Tools & Storage and Stanley Engineered Fastening. That was a full point of organic growth relative to our expectations, and that's globally across the company. Another full point was lower customer-specific volumes and it's been well in the public domain from a large…

Our next question comes from Mike Dahl with Credit Suisse. Your line is open. Matt A. Bouley - Credit Suisse Securities (USA) LLC (Broker): Hi. This is Matt, on for Mike. Thank you for taking the question. I just wanted to ask on the Engineered Fastening business. Wanted to get your thoughts on the customer challenges you mentioned just on the electronics side, specifically. So, how you may be addressing that, how you think that dynamic plays out in 2016, and how that is embedded in your organic guidance. John F. Lundgren - Chairman & Chief Executive Officer: Don will give you exactly how it's embedded in organic guidance, because it's pretty much arithmetic. But as you would expect, it's a large customer. We don't – we just have a policy not to mention customers names on our call. But I think it's quite clear who it is, and that's their choosing, not ours. That being said, strategically, it's to diversify our customer base just as we've done over the years in global Tools & Storage, where there was a point in time where the two largest North American big box retailers represented 40% of our business. Today, they're huge customers but they represent about half that amount. The same thing with Engineered Fastening, and then will turn it over to Don. Less than three years ago, OEM automotive was more than 70% of the business. So, it was a conscious decision to diversify the verticals we serve, particularly with a focus on electronics, to a lesser extent, aerospace. And we've done that and it's been pretty successful. So, we've had tremendous growth and then a step back relative to one customer's end market product sales being down. Simply said, within Consumer electronics, we need to diversify our customer base. We think we have as good a product offering as anyone to accomplish that. Of course, it doesn't happen overnight. And then continue the strategic push, as Jim and the business leaders talked about in May, to serve more verticals. But Don can talk to you about the specifics of the one issue in Consumer electronics as it relates to our guide. Donald Allan - Chief Financial Officer & Senior Vice President: Yeah. So, our electronics business within Engineered Fastening, as John mentioned, was down substantially in the fourth quarter. They had about an impact of a full point across the entire company, which equates to about $25 million of revenue. And that was a percentage decline versus prior year of close to 30%, 40% with that particular piece of the Engineered Fastening business. We expect that type of pressure to continue into 2016, and we formulated that into our guidance. And that's clearly one of the pressure points that we are anticipating and it's a headwind against the organic growth of 3%. And so, it's one the reasons why the organic growth is at that number versus maybe original expectation, closer to 4%

Our next question comes from Tim Wojs with Baird. Your line is open. Timothy R. Wojs - Robert W. Baird & Co., Inc. (Broker): Yeah. Hey, guys. Good morning. I guess my question is just on construction. Curious what you're seeing in the market and kind of what you're embedding around non-res and residential construction in 2016. James M. Loree - President & Chief Operating Officer: I'll take that one. So, we obviously have a view that's positive related to construction overall and we think that is an appropriate perspective for 2016 at this stage. And when you look at point of sale information from some of our major customers, we're seeing rates that – we ended the year with very strong growth rates and what we're seeing and expect that to continue here in 2016. As far as the break between resi and non-res, I think the non-res market continues to show a little bit of life. We watch that closely in a portion of our Security business, in particular, our mechanical lock business is a good indicator of that. That business is demonstrating kind of mid- to high single-digit organic growth over the last year. We expect that type of trend to continue. So, we're not looking for a dramatic increase in that space, but it's a relatively small part of our company, roughly $250 million, 300 million of revenue annualized but it's a good indicator of the non-resi market.

Our next question comes from Jeffrey Sprague with Vertical Research Partners. Your line is open.

Thank you. Good morning, gentlemen. Hey, I want to come back to currency more from a strategic standpoint if you can kind of address kind of the question. Looking at what's going on, obviously, there could be a debate on whether this is now just a cyclical phenomenon or a secular phenomenon. And I just wonder where you stand on that. And really the essence of my question is if you believe it's more secular, what does the investment look like to further reposition the footprint of the company geographically to respond to that on a longer-term basis? John F. Lundgren - Chairman & Chief Executive Officer: Yeah. I'll start, Jeff. You used the caveat, if you believe it's secular, and I'm not sure we do. We could have a long debate about it. But even if it – we're going to do the same thing irrespective of cyclical. On cyclical, Jim, Don and I have been doing this a long time. You want to talk about the euro; everybody worries about it being on parity. I've done business when it was at $0.85 and we've seen it approach $1.50. That's fairly cyclical. Irrespective whether it's cyclical or secular, what we can do the most, I think two things. We're not going to double down where the risks are high, but we're also not going to walk away from our investments. We're going to stay positioned particularly in emerging markets and 50% of our revenue is outside the U.S. in those markets which will continue to grow albeit slower from a lower base to be in a position to leverage our share and leverage our volume when and if it turns around. But the biggest thing affecting us and I think Don touched on it, we always talk about both…

Our next question comes from Rich Kwas with Wells Fargo Securities. Your line is open.

Hi. Good morning, everyone. Two quick questions; one, John, what are your thoughts about asset prices now for potential acquisitions in terms of what you're seeing out there given some of the broader weakness in the global economies? And then second question, on Industrial margin, I think calling for relatively flat, Don, does that assume – how much of a decline does that assume in electronics? It sounds like you're assuming a pretty steep decline year-over-year within the guide. But I just want to get the puts and takes and the risks to upside or downside to the Industrial outlook for margin. Thanks. John F. Lundgren - Chairman & Chief Executive Officer: I'll take the asset price. They're becoming more reasonable just as is Stanley Black & Decker. As I think Jim could not have been more clear in his pitch, Rich, that we are open for business in terms of growing this company by a thoughtful strategic acquisition that meets both our strategic goals and our financial hurdles as well as fits within our organizational capacity. And I'll simply say, as multiples come down, I think, and valuations come down, there's more out there that could be attractive to us both domestically and outside the U.S. I don't think – there's so many bargains out there as we speak that we need to rush to buy something because it's never going to be at a lower price. But our view is always to buy good companies at a fair price. We've had a hard time meeting or exceeding valuation expectations in the last six months, but we see that – we see it, I think, as you might expect coming more into line, which is that and the fact that we think we have our Security business on the…

Our next question comes from Robert Barry with Susquehanna. Your line is open.

Hi, guys. Good morning. John F. Lundgren - Chairman & Chief Executive Officer: Good morning. Donald Allan - Chief Financial Officer & Senior Vice President: Good morning.

I was wondering if you could just talk a little bit about what's assumed for price in the outlook? And specifically, perhaps if you could unpack some of the moving pieces say price to offset currency, price to get paid for all the innovation versus maybe having to share some of the commodity deflation with the bigger customers. Thanks. John F. Lundgren - Chairman & Chief Executive Officer: Sure. Fair question. Fairly complex to say the least. Donald Allan - Chief Financial Officer & Senior Vice President: Yeah. I'm not sure I can give all that level of granularity for a variety of reasons, but I will give you a little bit of color on this area. We do expect a modest positive in price in 2016, and there's really a makeup within that number. We do see more positive price in emerging market actions. So as we deal with this currency pressure, in particular in Brazil and some of the other Latin countries, but then also in Canada as well, which is obviously not an emerging market, we expect some price increase there. So those are positives. Some of the negatives, we will see a little bit of price pressure in different parts of the mature markets, because we have dealt with some significant commodity deflation; that's been a benefit to us. We don't expect that to be significant, but those are very kind of surgical strategic decisions that our Tools & Storage team is very savvy at managing and working through as part of the overall offering to our customers. John F. Lundgren - Chairman & Chief Executive Officer: I guess I'll just add to that. I think it is important because the very end of your question was more than fair in terms of getting paid for…

Our next question comes from Stephen Kim with Barclays. Your line is open.

Hi, guys. It's John Coyle filling in for Steve. Can you maybe talk about the pace of activity over the course of the quarter? Did you see a deceleration as we got later into the year? And then maybe any thoughts on what you see now thus far in January? Donald Allan - Chief Financial Officer & Senior Vice President: Yeah, this is Don. I would say that we didn't see anything that was really indicative of significant market trends. When it comes to our retail business in Tools & Storage, there's a lot of ebbs and flows in the quarter that are really dependent on when customers want products, refilling orders after the holiday season. So from a general market trend, we didn't see anything dramatic within the kind of consumer side of Tools & Storage. On the Industrial side, it was pretty much a consistent trend throughout the quarter, other than electronics. Obviously, electronics shifted to the negative dramatically in the month of November, and that held into December and is holding into the first quarter. So we're not necessarily taking anything as far as market trends in the fourth quarter as a big indicator to the first quarter and beyond, beyond some of the things that we've already discussed such as electronics and general industrial. But you know, I think the only thing that really shifted within the quarter would have been the electronics business with Engineered Fastening. John F. Lundgren - Chairman & Chief Executive Officer: Yeah and the other thing I'll add to that that I think most of us are aware of, as it relates to our retail customers and the retail business in general, one of the reasons Don said that between 18% and 19% of our earnings take place in the first quarter. January is always a very slow month. As I know you understand, and most people on the call do, our largest customers' fiscal years end in January. It's post-holiday season. They have a very appropriate objective of reducing or minimizing inventories as the year closes. So simply said, whatever happens in January, we don't ever think of it as a good predictor or indicator of how the year is going to start. We need pretty much a full first quarter, particularly on the retail side for that reason to get a flavor for where we are and where we're going. Importantly, Jim pointed out, I think, most important. POS was good in the fourth quarter, so inventories are in a good place. So nothing to suggest dire straits, but it's very early days.

Our next question comes from Mike Wood with Macquarie Securities Group. Your line is open. Mike Wood - Macquarie Capital (USA), Inc.: Hi. Good morning. Can you talk about the progress you made in North America Security margins related to the vertical markets' learning curve? And where are you maybe just give us an update on the evaluation of the overall Security portfolio within Stanley? Thanks. James M. Loree - President & Chief Operating Officer: Okay. I'll answer the second question first, and nothing's changed since we communicated in May of last year at our investor meeting that we would be doing an evaluation that would take about a year. And that we would during that period of time we were going to evaluate the operational performance as well as the strategic issues and opportunities related to the Security business and then we would come out with some sort of a position in the middle of 2016. And that continues to hold. As far as the North American Security business, I mean, I think we're finding that in the verticals, the healthcare vertical is doing absolutely fabulously. It's achieved mid-double digit margins, mid-teens. And the issue with that now is how to grow it faster. So we'll be making some investments to grow it faster, and it could be a substantial contributor to organic growth. The retail vertical I think is still kind of in the early days in terms of trying to figure out exactly where the value proposition could be and how big we can make that, how profitable it can be. And so I'd say we're probably in about the third or fourth inning with the retail. But I would expect by mid to late 2016, we would make a lot of progress on that front as well. I think the other verticals – and those are the two verticals that we're going to be emphasizing this year, and really get them right, get the healthcare one growing, get the retail strategy fully engaged. And then at that point, we'll decide do we want to add another vertical to our main area of focus.

Our final question comes from Jeremie Capron with CLSA. Your line is open.

Thanks. Good morning. And congrats on a very solid year. I wanted to ask you, Don, about the free cash flow. I mean, it's coming somewhat below initial expectations a year ago. And I wanted to understand what exactly drove the shortfall here. I suspect that forex trends were a significant contributing factor here, and so I'm wondering if we should expect even more of a headwind on cash flow in 2016 given the transactional effects that you called out earlier. Thanks. Donald Allan - Chief Financial Officer & Senior Vice President: Sure. Yeah, I mean, as I mentioned in my comments, the free cash flow for 2015 came in a little bit lighter than we anticipated. And it was primarily due to less working capital liquidation as a result of the lower organic growth that we saw in the fourth quarter. And it's interesting, the timing of how it played out is usually what happens in our Tools & Storage business in particular is that we have high levels of revenue in October and November preparing for the holiday season as well as doing kind of refill orders after Black Friday. And then we collect a lot of that by the end of December. Because we saw a different trend occur in that particular business and obviously a lower organic growth number than our expectation, the result was that we didn't get the working capital turn that we were anticipating. We were anticipating turns of 9.5 times to 9.7 times. It came in at 9.2 times which are actually fantastic. And at this stage, working capital turn improvement becomes harder and harder. The other dynamic is as we grow organically and you saw the significant organic growth we had in 2015, you have to improve your working capital turns…

That concludes the Q&A session. I will now turn the call back over to Greg Waybright for closing remarks. Greg Waybright - Vice President-Investor & Government Relations: Great. Thanks, Stephanie. We'd like to thank everyone again for calling in this morning and for your participation on the call and obviously please contact me if you have any further questions. Thank you very much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.