Good morning, ladies and gentlemen, and welcome to the PolyOne Corporation Fourth Quarter 2015 Conference Call. My name is Candice, and I will be your conference operator for today. At this time, all participants are in a listen-only mode. We will have a question-and-answer session at the end of the conference. As a reminder, this conference call is being recorded for replay purposes. At this time, I would like to turn the call over to Eric Swanson, Director of Investor Relations. Please proceed.

Thank you, Candice. Good morning and welcome to everyone joining us on the call today. Before beginning, we would like to remind you that statements made during this conference call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements will give current expectations or forecasts of future events and are not guarantees of future performance. They're based on management's expectation and involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statement. Some of these risks and uncertainties can be found in the company's filings with the Securities and Exchange Commission, as well as in today's press release. During the discussion today, the company will use both GAAP and non-GAAP financial measures. Please refer to the earnings release posted on the PolyOne website, where the company describes the non-GAAP measures and provides a reconciliation of them to the most comparable GAAP financial measures. Operating results referenced during today's call will be comparing the fourth quarter of 2015 to the fourth quarter of 2014, unless otherwise stated. Joining me today on the call is our President and Chief Executive Officer, Bob Patterson; and Executive Vice President and Chief Financial Officer, Brad Richardson. Now, I will turn the call over to Bob. Robert M. Patterson - President, Chief Executive Officer & Director: Thanks, Eric, and good morning to everyone joining us on the call today. For the fourth quarter, we delivered record adjusted earnings per share of $0.39, an 8% increase over the prior year. This marks our 25th consecutive quarter of year-over-year EPS growth and brings us to $1.96 for the full year, an increase of 9% above last year. While we just missed…

Thank you. And our first question comes from Frank Mitsch of Wells Fargo. Your line is now open.

Hey. Good morning, gentlemen. Hey, Bob, I just wanted to share the excitement that I had when the issue of Guns & Ammo magazine hit my doorstep and I saw that you guys won Ammo of The Year award. So that was certainly something that warmed the cockles of my heart. I wanted to see what else has happened within PolyOne. If I think about where the earnings come in, this is a bigger miss relative to consensus than we've seen before. And I know that Brad mentioned that Europe was weak in global Specialty Engineered Materials in December. Was there anything else that happened within the fourth quarter that turned out a little bit more negative than you had originally anticipated? Robert M. Patterson - President, Chief Executive Officer & Director: Well, on balance, the results for Designed Structures and Solutions fell short of our expectations, Frank. And that obviously has been a theme throughout the first three quarters of the year, but got worse in the fourth quarter. One of the observations that I made in my previous remarks was that we have observed some losses with larger customers and had one in the second half of the year or actually towards the – in the fourth quarter. And these larger customers have had the ability to in-source production. As we have talked about earlier in the year, we knew about one or two of those. One of them took place before we bought Spartech, one was ongoing, and we knew that some of these could take place. We've been working diligently to try to effectively present our value proposition to these customers and we were unsuccessful with this most recent customer. And so, I would point to those DSS results as being the single largest disappointment and/or difference vis-à-vis our expectations and would say that's the largest reconciling item probably to the Street expectations as well.

All right. That's very helpful. And you mentioned in your closing remarks that you are anticipating double-digit growth out of the legacy PolyOne businesses to more than offset lower earnings at DSS. Were you implying that 2016 for DSS is likely to be below the $13.8 million in 2015 EBIT for DSS? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. With this recent in-sourcing discussion that we just had, that's certainly going to be the case for 2016. I do think that we have growth opportunity in the latter half of 2016, but in the first half, we will see a year-over-year earnings decline and my sense is that even with an uptick in the second half, we'll still have lower earnings overall for DSS.

All right. I appreciate the candor. Thank you. Robert M. Patterson - President, Chief Executive Officer & Director: Yes.

Thank you. And our next question comes from Mike Sison with KeyBanc. Your line is now open.

Hey, guys. Good morning. Robert M. Patterson - President, Chief Executive Officer & Director: Hi, Mike.

Can you maybe walk us through some of the drivers of generating double digit growth from global Color, Engineered Materials, and I guess, I'm assuming PP&S and Distributions to play a part into the growth in 2016? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah, my comments about our expectations here, one is that we expect double-digit EPS growth from all of our segments. I mean, that's our goal. And on a consolidated basis, the same is true. When I look at the components of that here in the near-term, I obviously just outlined that we have to overcome lower earnings in DSS. I expect Color and Engineered Materials to continue on the trajectory that they have been for the last six years, and I can talk about some specific drivers for that. For PP&S and Distribution, we still have some pricing influences to overcome with respect to where hydrocarbons are. And if you look at the start of the year, they are lower than where they were in 2015. So we've got some level of that to overcome, but believe that we will. We're seeing positive trends already from a volume standpoint in both of those two businesses going into 2016, so see that as a positive. Look, with respect to what's going drive growth in Color and EM, it's going to be a continuation of our focus on winning new business in specialty applications. Oftentimes, those are singles and doubles, Mike, as you know. There isn't one large win that I would point to. But as I look beyond 2016, we are particularly excited about the new Fiber Colorant technology that we just introduced, which has the potential to be a real game-changer for PolyOne.

Okay. Great. And just a quick follow-up, and I guess the double-digit EPS growth from the $1.96 pins you somewhere in the $2.15 range, is that kind of the way to think about it? And then, I guess, I'm just little bit confused on the DSS commentary. I think, in the last quarter, the expectation was maybe hitting in the low 20%s (34:40), and you lost one, kind of, big contract that sounds like a $5 million, $6 million, $7 million, $8 million in terms of the hit, is that the way to think about that one, sort of, hit? And I guess maybe – sorry I'm piling the questions on. But what do you think needs to happen to get profitability where it needs to be for DSS longer term? Robert M. Patterson - President, Chief Executive Officer & Director: Well, the most – like, the transformation here for DSS really needs to follow the same transformation we experienced in both EM and Color and our legacy businesses in its very early days. And if you recall, back then, PolyOne struggled with its identity in terms of who we wanted to be and what we were going to do in the marketplace. We quickly learned and transformed away from large volume-oriented commodity applications and moved towards specialty applications, which are often lower volume. In the short-term, that has been an earnings hit for DSS. Certain of these have been larger customers who have in-sourced their production, meaning they're just manufacturing this for themselves. That is a big disappointment for us. And categorizing sort of the composite impact of that going into next year is lower earnings, primarily in the first half of the year. And I guess that's the best way that I would categorize that. The remaining opportunity is to reduce costs in DSS. When we first bought Spartech, we announced a certain number of plant closures, said that we would continue to evaluate our asset base and we do that with the underlying business that we have. And with this larger loss, we expect to close the facility that I mentioned today as well as take some broader cost actions across general and administrative expenses. That's the best way I can really characterize for you, Mike, what we're seeing in DSS and what our focus needs to be on these specialty, smaller applications, and in improving the profitability of them.

Okay. Great. Thank you.

Thank you. And our next question comes from Bob Koort from Goldman Sachs. Your line is now open. Ryan Berney - Goldman Sachs & Co.: Good morning. This is Ryan Berney on for Bob. Robert M. Patterson - President, Chief Executive Officer & Director: Hey, Ryan. Good morning Ryan Berney - Goldman Sachs & Co.: I just had a quick question on the acquisition of Kraton, was that – was kind of the EBITDA number you quoted, something that's kind of TTM number, was there may be a negative LIFO impact included in there that might make that multiple kind of excluding that a little bit cheaper? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: No LIFO impact. I mean there is a certain level of working capital that we acquired that I guess you could look at as a good guide that was included in the purchase price. As I said earlier, we do believe it's EPS accretive. That's probably around $0.02 to $0.03 a share here in 2016. Ryan Berney - Goldman Sachs & Co.: Okay. Great. And then, in the medium run, do you think that – do you feel like deal multiples are now falling to a level that you're comfortable with now with both Magenta and this acquisition being closed in the last couple of months? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Well, I mean it's – obviously, there were a number of high multiple deals last year done by other companies. When I look at what we paid for Magenta at around 7.5 times and Kraton, the TPE business at 9 times, I think that's more reasonable than what other companies paid in the previous year. For us, when we focus on these smaller specialty niche…

Thank you. And our next question comes from Kevin Hocevar of Northcoast Research. Your line is now open.

Hey. Good morning, guys. Robert M. Patterson - President, Chief Executive Officer & Director: Hi, Kevin.

Wondered if – I think you've talked in the past about sales, total top line sales potentially turning positive sometime in the first half of 2016 with all the added sales force and everything. Just wondering your take on that now given the developments in Spartech and if you think that can still turn positive sometime in the first half of the year or if you think that's pushed back a bit? Robert M. Patterson - President, Chief Executive Officer & Director: I think we've still got a chance to get there exiting the second quarter, inclusive of this acquisition we just completed. When I look at where DSS results landed in Q4 and the challenges that we just talked about, Kevin, those certainly have to be overcome to accomplish that. So – and I see that being more of a second half story than first half.

Okay. And then, when I look at PP&S segment, you grew gross margins pretty strong, up 400 basis points in the fourth quarter, making that by far the best performance in terms of the margin profile of that business for the year. And seasonally, this tends to be the lowest margin. So, wondering if you could go into a little more detail on what allowed that to happen? Was there any one-time benefits or any price rise (41:20) or anything like that and kind of how you expect that margin profile to carry forward into 2016? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. There's no one-timer to point out. Inside of that segment, we really have two different businesses: our historic vinyl business, the Geon brand, and our contract manufacturing as well as what we acquired from Spartech. And it's kind of a mixed story there with the Geon vinyl business doing very well and the contract manufacturing being down. So, on a net basis, just continuing to improve our mix and Geon is probably the best and single largest influence I could point to of 2015 over 2014.

Okay. Great. Thank you.

Thank you. And our next question comes from Jason Freuchtel of SunTrust. Your line is now open.

Hey, good morning. Robert M. Patterson - President, Chief Executive Officer & Director: Hi, Jason. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Hi, Jason.

Just touching on the acquisition a little bit more, can we assume the margin profile of the business is similar to the margin profile of your Specialty Engineered Materials business? Is the supply agreement for hydrogenated SBCs or unhydrogenated SBCs? And have you previously had a relationship with Kraton or did you source SBCs from other producers? Robert M. Patterson - President, Chief Executive Officer & Director: Well, first of all, the EBIT margin is a little lower than where EM is right now. Interestingly, it's actually very close to where, I would say, GLS was when we first acquired them. With response to your question about a relationship with Kraton, they have been a supplier for ours for many years, and a supplier to GLS well before PolyOne acquired GLS. We've had an ongoing relationship with them in terms of some of their product lines and some of their supply, and for the most part, what they would be supplying into us, their HSBCs.

Okay. Great. And so far in the first quarter, are you seeing any softness in any particular geographies for any of the segments? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. It's always hard to draw a conclusion from either December or January. I really like to see how the quarter evolves to do so. December was not as strong as we were expecting it to be. I'd say January is probably right on par with where we thought from an expectations standpoint. There is certainly a lot of uncertainty in the marketplace. And customers routinely cite that in terms of ordering in smaller quantities, and lower volumes and shorter periods of time and less lead time. So there's definitely a lot of uncertainty out there. There isn't one conclusion I would draw on a specific end market that I could share with you from my experience so far in January, however.

Okay. Thank you.

Thank you. And our next question comes from Ben Kallo of Robert Baird. Your line is now open. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Hi. Good morning, guys. This is Tyler Frank on for Ben. Robert M. Patterson - President, Chief Executive Officer & Director: Hi, Tyler. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Hi, Tyler. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Quick question, just wanted to touch on the cost reduction programs that you have in place. When we think about the acquisition and then also the closing of the Wichita facility, how should we think about SG&A costs in 2016 compared to 2015? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. The cost reductions, first of all, with respect to the plant closure that we discussed, that obviously will take some time to affect, and we will start to see the benefits of that in the second half of the year. Everything held equal, as I look forward into 2016, we do expect SG&A to be up, but not in the area of general and administrative costs. I see that coming down. However, as we've said a number of times on the call, we've increased our sales force by 9%, and see that trailing into the next year to give us an overall uptick in SG&A for 2016. You will see some of that in the first quarter and more of that coming in the second half of the year, I mean, with respect to the DSS savings. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Great, and then, can you discuss the on-time deliveries that you guys saw in January? Obviously, December was a very strong number, but did you carry that forward into January? And do you expect to carry that forward throughout the remainder of Q1? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah, we did. I mean, we continued to show improvement. I think that was a DSS specific question, but it's true for PolyOne as well that we continue to have improving performance for DSS and at or near 95% for the balance of PolyOne's businesses in January. Tyler Charles Frank - Robert W. Baird & Co., Inc. (Private Wealth Management): Great. Thank you. Robert M. Patterson - President, Chief Executive Officer & Director: Yes.

Thank you. And our next question comes from Laurence Alexander of Jefferies. Your line is now open.

Good morning. Can you just clarify two things? First, can you walk through any non-operating items that affect the cash bridge to free cash flow in 2016? And secondly, your comment around offsetting the weakness in DSS, is that true for Q1, i.e., should earnings be positive in Q1? Or is that just more true for the full year? Robert M. Patterson - President, Chief Executive Officer & Director: I'll take your second question, Laurence, and then Brad can comment on the cash flow expectations for next year. So my comment on DSS is we are going to immediately see lower earnings here in the first part of the year. So that was an observation I am making about Q1 and Q2, with an opportunity to start to show some improvement in the second half of the year. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Yeah, Laurence...

Just to be clear with that, lower earnings for the entire company or lower earnings in DSS? I guess... Robert M. Patterson - President, Chief Executive Officer & Director: I was talking about – sorry, DSS. DSS. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Yeah, and Laurence, regarding your question on kind of non-operating items that might impact the free cash flow in 2016, I mean, right now as we sit here, the announced restructuring actions that we took in the fourth quarter, there will be an additional $10 million worth of restructuring charges in the first half of 2016. And then, we'll have our ongoing, kind of, environmental costs. So, I expect the overall special charges, if you will, to be about $15 million. Of which, about half of that is cash. Those are – that's the only really significant what I call non-operating factor impacting our free cash in 2016.

Any working capital relief apart (48:41) from lower input costs? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: No, I mean, I would expect the working capital this year in support of the second half as we begin to move the top line. I expect the working capital to be a slight negative.

Okay. Thank you.

Thank you. And our next question comes from Dmitry Silversteyn of Longbow Research. Your line is now open.

Good morning, guys. This is Matt Skowronski on for Dmitry. In your PP&S segment, you guys did a good job of expanding – going off of Kevin's question – margin during the quarter on year-over-year basis. Was there any hit from the Canadian dollar slide during the quarter? I know you guys are pretty heavily exposed to it? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: No. We have – it's not a material number by any stretch. Yeah, we do have, I think, 5% to 6% of our sales in Canada, preponderance, of which is in POD and in PP&S, but nothing that I would point to as any level of significance.

Okay. All right. Thanks. And you mentioned a slowdown in Specialty Engineered Materials within Europe in the December quarter. Can you talk about the end markets and whether that was, kind of, a macro thing or you think it was just customer specific? Robert M. Patterson - President, Chief Executive Officer & Director: I think it's too early to determine whether or not it's a macro thing. Like I said, I try not to draw too many conclusions from what happens here in December and/or January. In February, I think we'd start to get a clearer picture on what to conclude for the year. And so, at this point, I don't know that it was macro as much as it was probably just a hesitation to advance orders in December versus the beginning part of this year. And as I look at where things are in January in Europe, I see that trending a little bit better than what we saw in December. So, hopefully that plays out to be a little bit of momentum that are going into 2016.

That's all the questions I have. Thank you. Robert M. Patterson - President, Chief Executive Officer & Director: Thank you.

Thank you. And our next question comes from Mike Harrison of Seaport Global. Your line is now open.

Hi, good morning. Robert M. Patterson - President, Chief Executive Officer & Director: Hi, Mike. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Hi, Mike.

Bob, I was wondering if you could give just a little more detail on exactly what you're getting from Kraton. Are you purchasing plants there? Or is it more technology and customers? And that is going to go into the Engineered Materials segments, correct? Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. That's going to go into Engineered Materials, more specifically, the GLS business. And we are acquiring certain technologies. We are acquiring certain assets, but no plants. So, the ultimate goal and objective is to ultimately transition manufacturing into one of our existing PolyOne facilities. That's the easiest way to think about that, Mike.

And do you have any sense of what that's going to look like, what the transaction multiple would look like on a post synergies basis? Robert M. Patterson - President, Chief Executive Officer & Director: I think, certainly, once we have those products up and running on our lines that there is some synergy benefit, when you consider what that is on a multiple basis that probably takes a couple of turns off of it. It's – candidly, it's sort of a small part of the deal. And I really look more at the commercial aspects in growing the business. We will invest in additional resources to help support that, which is offsetting some of that benefit. So I wouldn't draw a significant conclusion or benefit from the consolidation itself.

All right. Then, for Brad, I was just looking for some guidance on below the line pieces; the tax rate interest expense and share count, if you can maybe talk about what the repurchase plans might be for 2016? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Yeah. So, I think, in terms of the tax rate question, we probably average about 32%, which is in line with how we've kind of closed out 2015. In terms of the interest costs with the refinancing that we've done, I would expect that our interest cost year-over-year would be down $5 million to $6 million, that's a substantial savings from the outstanding work that we did on the refinancing. And certainly, the share count, as we've always been, we'll look for opportunities in the market to repurchase our stock, but I'm not ready to announce what that is. Again, we ended the year with about 86 million shares outstanding.

All right. Great. Thanks very much. Robert M. Patterson - President, Chief Executive Officer & Director: Sure. Thanks, Mike. We have time for one more question.

Thank you. And our final question comes from the line of David Stratton of Great Lakes Review. Your line is now open.

Good morning. Thanks for taking the question. Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Hi, David.

Can you tell us about those large customers in DSS? Are there any others that have the ability to switch over to in-sourcing? And if so, is that forecasted into your 2016 earnings? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: I mean, the short answer as to that is that I don't see any additional customers making that same decisions. In terms of the types of products and services that we're offering, again they're smaller niche applications that are getting closer and closer to what we do well with Color and EM. So I don't see that as a risk in the future, to answer your question, and look, with respect to what I view as the future or forecast for DSS, I've been pretty clear on what I think the earnings impact is going to look like in 2016, and that really incorporates everything that I know today.

All right. Thank you. And then, can you give us any guidance on what your CapEx for 2016 looks like? Bradley C. Richardson - Chief Financial Officer & Executive Vice President: Yeah. I think this year we spent about $90 million and I think that's a good – between $85 million and $90 million is a good proxy for 2016.

All right. Thank you very much. Robert M. Patterson - President, Chief Executive Officer & Director: Yeah. Thank you. And I just want to say thanks for all of our investors and analysts who joined us on the call today and your continued interest in PolyOne. We look forward to speaking with you again at the conclusion of the first quarter results. Thank you.