Ladies and gentlemen, thank you for standing by and welcome to the Ingredion First Quarter 2015 Earnings Conference Call. At this time, all the participants are in a listen-only mode. There'll be an opportunity for your questions and instructions will be given at that time. As a reminder, today's call is being recorded. I'll turn the conference now over to Ms. Heather Kos. Please go ahead.

Good morning, and welcome to Ingredion's first quarter 2015 earnings call. Joining me on the call this morning are Ilene Gordon, our Chairman and CEO, and Jack Fortnum, our Chief Financial Officer. Our results were issued this morning in a press release that can be found on our website, ingredion.com. The slides accompanying this presentation can also be found on the website and were posted about an hour ago for your convenience. As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties. Actual results could differ materially from those predicted in the forward-looking statements and Ingredion is under no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from those discussed during today's conference call or in this morning's press release can be found in the company's most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Now I'm pleased to turn the call over to Ilene. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Thanks, Heather, and let me add my welcome to everyone joining us today. We appreciate your time and interest. As we communicated a few months ago, we expected headwinds this year with foreign exchange and slowing economies in South America, but felt our strong business model and management team could deliver solid operating results. I am pleased, our first quarter results were up on a year-over-year basis and in line with our expectations just as we signaled. We ended the quarter with growth in our volumes, operating income and earnings per share. Organic volumes grew 3%, while Penford volumes added two percentage points. North America delivered a good quarter and lapped…

And first from the line of Ken Zaslow with BMO Capital Markets. Please go ahead.

Hi. This is Patrick Chen for Ken Zaslow. I have a question regarding specialty products. You had previously mentioned that some of your products will become more commoditized over time. How long do you expect these prices to become or to stay specialty until it happens, particularly, in regions such as Europe, where it's primarily specialty? Ilene S. Gordon - Chairman, President & Chief Executive Officer: This is Ilene. Our specialty product portfolio is very robust and it's made up of products that are focused on consumer trends. And, so we do not – have not stated that we see them tapering over towards become more commoditized. In fact, many of our specialty products as an example, our NOVATION products, have a really barriers to other people transitioning over to them and that they really deal with consumer trends such as Clean Label. And so, it takes a while for customers to switch from one product to another, so there are some barriers there to switching. And so – and these products have higher than average margins. They have features that customers cannot get somewhere else, they are part of recipes that are drilled into products that have specific consumer textures and tastes. And so, we think our specialty portfolio, which if you recall in 2014, was 24% of our sales and that our strategy is to grow that to 28% to 30%, should continue to be – remain very robust. Jack, I don't know if you have something else you want to add to that? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Just the nature of the food industry as well, the products have a long product lifecycle, and we've seen our products have a very durable longevity to them from a historical perspective. And while the trends continue to evolve in – throughout the world actually in terms of the different components, I think we continue to evolve our offerings as well. And so, I think that's all from a positive perspective, and we are very excited about the portfolio. Ilene S. Gordon - Chairman, President & Chief Executive Officer: I guess, the other thing I would add to that is, our portfolio is very broad and serves many customers with many products. We've talked about specific consumer trends that we're focused on. And therefore, we become entrenched and an important part of the recipes of our customers, but again with a very broad offering and a broad customer set.

Great. Thanks. I guess I was more concerned that you had mentioned during CAGE that these products become more core over time, implying margins will kind of decrease whenever they become more core? I guess, separate question, you had mentioned that you will continue to keep adding pricing outside of U.S., how long is that – how sustainable is that? I assume local competitors will not have increased price given they don't really have an FX translation impact? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Well, I think, how you have to look at things is from an input perspective particularly in our core business components. If you think about the raw material being primarily corn and tapioca, it's largely a U.S.-denominated type of raw material, in addition to that energy costs and the investments are primarily derived from a U.S. dollar base. So, both us and our competitors face those same headwinds. And, in addition to that, the inflation in the country is obviously your competitors are faced with the same type of issues there. And so, the pricing really is just a natural extension in terms of how we will increase our price from a competitive perspective. And, I think the other side of the equation is, is how we continue to drive for low delivered costs in each one of our regions and focus on our continuous improvement program to really deliver the value to our customers in these challenging times, so that we can be competitive in the region.

Great. Thank you. I'll pass it along. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Thank you.

Our next question is from Farha Aslam with Stephens. Please go ahead.

Hi. Good morning. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Good morning. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Good morning.

Looking at your commentary, you have highlighted cost savings program, could you just kind of put a square around it and tell us where you're getting those cost savings? And, probably, what the cost savings are in the core business that you plan to achieve kind of this year and what ongoing cost savings could be for Ingredion? Ilene S. Gordon - Chairman, President & Chief Executive Officer: Farha, this is Ilene. And we are having trouble hearing you clearly, but I believe that your question was about cost reduction opportunities. And, I'll answer that in general, and then, if you have something more specific, we can talk about it. But when I talk about our continuous improvement, we have a very good process that we rolled out originally in North America to drive costs and this could be anything from energy efficiency to yield improvements, some of which uses capital, other is focused on methods. And what I've said before, we continue especially in challenging economic times in South America, we continue to roll this out in South America. And we train our people in solving business problems with specific issues and so in South America as an example the opportunities would also be in energy efficiency and yield improvement and productivity. So there is opportunities globally and one of the best parts is that we're able to transfer best practices from one region to another, with our operating excellence background, we're really a leader in this area and I know, Jack, do you want to add something to that? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Yeah, I think there's the component pertaining to a continuous improvement within facilities and then there is the entire global network that we continue to foster our improvement through. And I can use Europe as a good example even during the quarter where we were importing a lot of products from the United States in the past and our previous investments, so that they could become much more self sufficient within Europe, has really paid off in terms of their competitiveness within Europe even though it's a specialty product. Effectively we're sourcing most of that product or a greater percentage of that product from Europe now. And we continue to look at our North American blueprint in terms of how we're organized from a plant perspective and optimizing that. And then I would say that just even in South America as we look through our manufacturing footprint from a network optimization, we continue to explore opportunities how we can be more efficient down there too. So there is both the micro in terms of how you produce the product and run very efficiently and then the macro, how you source product between our different locations the most effectively.

Great. And just one follow-up. Could you just share with us the competition you're seeing in Asia. Do you – have you seen it sort of mitigate over the last month as U.S. has heated up in both the sweetener, the specialty starches and ethanol markets? Have you seen any declines in competition in Asia? Ilene S. Gordon - Chairman, President & Chief Executive Officer: I'll start out. Well, first of all, in general, our Asia portfolio as an example in China is really in specialty starch ingredients. We are not in the sweetener business. So, I couldn't comment on that. But certainly we have competition with the local competitors in China and it's obviously a very good market for us to be able to be one of those suppliers that is thought of as very reliable and high-quality. If you look at something like Korea, which is again a localized market and there are four competitors, the competition has been pretty similar and again delivering value in sweeteners, but also for us as I mentioned, we've been focusing on specialty sweeteners and starches and have done well in terms of growing that in Korea. Thailand, obviously, we have very successful business there, both local and we use it for export for tapioca, and again, being a leader there, we've been able to continue to be very successful. But I would not say there's new competition in the businesses that we're in. I don't know, Jeff, do you have anything else you want to add? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Farha, I think you make one valid point though is we have seen because of some of the capacity reductions in North America, the market tightening up in North America. And I guess, we haven't really seen the impact of that directly in Asia at this point in time, but certainly the market in North America appears to be robust as you can tell by our volume improvements in the current year – current quarter.

Fantastic. Thank you very much. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Welcome.

And we will go to Rob Moskow with Credit Suisse. Please go ahead. Robert B. Moskow - Credit Suisse Securities (USA) LLC (Broker): Hi. Thank you. Just a couple questions. One is, can I read the outlook correctly that you're raising your fundamental outlook by about $0.10? When I strip out the FX impact and then the acquisitions, it seemed like you're raising your fundamental outlook a little bit. And then the second thing is, for LatAm, your pricing is up 8% and I get the three month to six month kind of lag in pricing, but your customers like Mondelez and others, I mean, their pricing is up 20% or more in these types of markets to offset all of the currency impacts on their costs. So, if – I guess, my – if your customers are raising price to that degree, what is the challenge of going to them and raising pricing a lot faster? Thanks. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Bob, let me start and if there's anything else to add. Let me start with your second question first, where you indicated that South America's pricing – pricing is up 8%. I would put it into a couple buckets. One is, corn prices are down and traditionally you would see your price mix down anyway. And so, using Asia-Pacific or North America as a benchmark for that, you've seen the price mix ratio both down around that 4% to 5%, which have very similar type of marketplaces. And so, South America would have been down just because of the pass-through of the lower corn cost to a certain extent anyway. So, we are – we're actually fairly pleased with the pass-through of pricing into our customers at this point in time…

We'll go to David Driscoll with Citi Research. Please go ahead.

Great, thank you, and good morning. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Good morning. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Good morning.

Yeah, I wanted to go back to the guidance for a second. So, when I look at your segment comments, there's a little bit of a de-linkage I think for me on the fact that you raised the full-year number. But in your segment commentary, it seems like operating income for North America has not really changed. Your South American comments are now in line to slightly up, but you had previously thought it was going to be a modest improvement; I take that as slightly worse. Asia, a modest improvement versus the increase comment from last time; again, modestly worse. And EMEA in line versus 2014 versus your last time comment of increase; again modestly worse. So if I'm reading these words right, it's always a difficulty of reading these little words, if I am reading these words right, it seems like the segment commentary on balance got worse. The FX numbers and the Penford accretion would seemingly be offsetting one another. So, Jack, could you try it again and what am I missing here such that you raised the guidance? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Well, David, first of all, we held the guidance, because the impact was being offset as you know. And the second piece is really, I think, if you go by region, I would say we're a little bit more optimistic in North America, because that's really driving a big piece of our business. And if you think even in the current quarter, I know that we had commented on the $20 million of lapping from last year and things, but there was still very solid improvement in North America. And so I would say the clarity we're seeing is in our North American business where we're seeing…

Two quick follow-ups, on North America, in last year's second quarter results, did last year's second quarter see any significant volume benefits because of the difficulties in the first quarter? So, you had all kinds of shipment issues and logistic problems. Did some of that vol slip into the second quarter and does it make it a harder comp? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: No, I just – we didn't see the volumes down that robustly in the second quarter. Second quarter was an okay quarter, but it was almost the contrary, David, I think if – and I'm going by memory a little bit, we still had some trailing issues, as the supply chain freed up, because the rails were still kind of backlogged, and we were using more trucks and things. And so, we had a little bit of supply chain issues, even trailing into the second quarter there, as supply chain got normalized. And so, we didn't really – I don't really perceive to be a big issue in terms of the comps this year, where we got some big windfall last year in our second quarter.

And the Mexican fourth quarter co-product issue, that did not reoccur in the first quarter, nor would you expect it to have impact in 2015, is that fair? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: That's absolutely fair. As I mentioned in the last quarterly call, what happened was, it was a pricing issue and adjusting to the currency, the devaluation as quickly as we could in terms of U.S. dollar equivalency. And so, we have put actually processes in place to put our pricing out in a shorter window, I'll call it. And so, I don't think that should occur. Obviously you can never predict whether there is some sort of major devaluation or something like that, where we get hung out with some prices, but I would say that was a one-time fast devaluation type of issue.

Nice start to the year. Thank you.

Our next question is from Brett Hundley with BB&T Capital Markets. Please go ahead. Brett Michael Hundley - BB&T Capital Markets: Hey. Good morning, everyone, and let me offer my congratulations on some nice execution this quarter. Good morning. Ilene, I have two kind of higher level questions for you. The first is on your product portfolio, which we have discussed a little bit on this call and I sometimes get questions on just the net effect of some changes that are occurring within the food industry. And obviously from what we're seeing, added sugar is becoming a big issue, companies are talking about removing ingredients that consumers don't have in their pantry or aren't easily recognizable. McDonald's talked a while back about taking maltodextrin out of its Grilled Chicken recipe. So, you have the withdrawal here of some legacy CPO products, some of those more core commoditized products and then you have the replacement hopefully of some National Starch products and other things that you guys bring to the table. And so, I'm just curious kind of from a high level, how you see this paying out for Ingredion, whether it's a one-for-one swap with margin benefits for the company or is it an opportunity to win business, is it a threat? If you kind of just talk qualitatively about that. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Sure. Well, as we talked before about our R&D portfolio, we're very much focused as a texturizing leader to being the go-to company for texture and that our knowledge of sweeteners is helpful in formulating those recipes, and so we've expanded it in our R&D area to make sure that we address the different trends. So I would say that the texture is even accelerating even more the…

Our next question is from Akshay Jagdale with KeyBanc. Please go ahead.

Good morning, and congratulations on a good quarter. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Thank you. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Thank you.

So, I'm just trying to understand better the situation in North America. Can you help me put into context your optimism relative to your guidance range, which still is – the range is pretty large still. And, also, maybe relative to history, because everything we're hearing from your competitors, et cetera, points to a very good situation in corn, wet milling in North America, Mexico doing well, capacity came out of the market. So, a lot of good things are happening. So, I'm trying to put that into context relative to your guidance range, and perhaps relative to North America's performance EBIT-wise historically. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Yeah, Akshay, I guess when I look at North America, it's set up fairly well and while – you talk about capacity and things, I think the industry is running at a fairly high rate of capacity utilization based on our estimates. We used to say in the mid-80%s and with some of the capacity coming up, it's probably much higher than that. And so, but some of that capacity came out very late. So, it didn't necessarily impact contracting in the current year. So, I wouldn't get – don't extrapolate very, very large margins in there. Some of the things that we've seen though is, is that with the higher utilizations and things, we've been able to sell out many of our specialties and continuing to drive that specialty growth in many categories. And I did mention some of our network optimization, where we were supplying more to Europe and things in the past from on our – of our specialties and we became much more self-sufficient in Europe, which then freed up some of our specialty capacity in North America, which helps the margins there as well. And, again, Mexico continues to be one of our bright spots in terms of continued growth, as Ilene mentioned earlier. I think the North American picture, it's interesting because people didn't see the growth there, but I think the changing food trends and things are right on target with some of the things we're trying to execute upon. And North America is one of the fastest growing economies right now. It's interesting from that perspective because for so long, we didn't see growth in North America and now we're starting to see it again.

So, that's helpful. But can you – maybe asked another way, what will it take to get to the high end of your guidance? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Sure. I think the high end of the guidance will be predicated on both, in North America, it will be driven by volume improvements that we didn't have factored in and several mix improvements with more growth in our specialty categories. And then, the real high end of the guidance comes from the fact that around the world, can we price in the devaluations that we've seen, because I still think that that's probably the – we have upside and downside in our guidance because of that. It's the timing of the pricing and how it correlates to those devaluations. Can we get those through at this point in time? And obviously, the raw materials, there's plentiful supply of corn and things in North America. South America crops are good. And so, we don't see – we see fairly stable raw material costs going forward. So, it really comes down to those two components. Outside of North America, it's a pricing issue in terms of can you price through the devaluation, particularly in slow moving economies, slow growth economies. And then, in North America, it's really volume growth.

Okay. And so, regarding the pricing relative to devaluations, over the last three years, including your guidance for this year, it's been like a $0.82 headwind, if this year's number comes out to what you've guided to. So, clearly, you're lagging that, right, and part of that is just the South American business perhaps was over-earning by $0.25 or so. But do you expect that you, over time, you'll get a large majority of that headwind in FX back? Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Yeah, I do think that – particularly, if you're looking at the South American environment, I do think that it will take some growth in the economy, because there's still a supply/demand issue there and the demand just hasn't grown as quickly as we've seen. And so, what we've seen is, is the elections in Argentina are going to be in the fall of this year and so that's going to be another probably transitional government, into 2016 type of range. And, the Brazilian numbers, you've probably read quite a bit about the macro environment in Brazil right now being relatively soft. They've had to increase their interest rates even today to combat some of the inflationary pressures. And so, that environment is going to be challenging in the short term as well. And so, I would say that it's getting back those prices from a historical perspective will take us probably into that – not just 2016, but into 2017 from that perspective.

Okay. And then, just on specialty and Penford, specifically, what we've heard is, their specialty portfolio, they were sort of on the brink of commercializing some products. Now, you obviously own – completed the acquisition, own the asset fully for a little less than two months. But can you give us some insights? I mean the food ingredient business was over $100 million for them, right, and just trying to get a sense of the specialty portfolio that you've bought from Penford and what you're excited about there. And maybe give us some context as to how excited you might be of that portfolio? Ilene S. Gordon - Chairman, President & Chief Executive Officer: Yeah, no, I'll handle that. We – two months in, we continue to be very excited, and you're right, the portfolio – the food portfolio, which obviously had some corn and is very much focused on potato starch. As I said earlier, non-GMO, gluten-free, great portfolio, a lot of opportunities there to grow. And, as I also mentioned, we're excited about the biomaterial solutions business, which there are a number of opportunities that are being funded and we're beginning to learn about those and look at different opportunities. As we said, the synergies, the $20 million of synergies that we're committed to and feel good about will initially come from procurement, supply chain optimization, some of the overhead G&A costs from not having a public company, et cetera. But that we are excited about the portfolio and bringing the two companies together in the R&D sense. And I'd say the other aspect is the hydrocolloids side, which is a small business that was bought by Penford a little over a year ago called Gum Tech and, again, it's a business where it's very much focused on the non-starch texturizers to deliver different type of special ingredients to customers in the texturizing field. So, again, it's not quite two months, but we continue to be very excited about the products and people and capabilities of Penford and integrating it and growing.

Okay. And, last one on just the overall specialty portfolio. In the past, I think long-term, you've said that, that business is, overall, that category is high-growth. Can you help us understand like today, what do you think a good organic growth rate for your specialty portfolio is because it does change and move around with economic conditions, regions, so on and so forth. But what's a good organic growth rate for the portfolio that you have today, and maybe if you were to guess what the overall category is growing at too, that would be great. Thanks. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Okay, Akshay, this is Jack. I think the – when we look at the specialty growth rates, we've always said that it's probably in the high single-digits, which is two times our core growth rate, or more than two times of our core growth rate, I would say. And so, I still see those trends continuing. I do see probably maybe an acceleration of some of the trends just because of them taking place. But it's still takes a fair length of time to get the products in place, and things, so the execution time is still there. So, we're – I think Ilene summed it up very well is that we're trying to move our specialty portfolio to 28% to 30% of our portfolio from the 24% we have today. And, effectively, that will – if you keep your core growing at that, let's say, one to low single-digits, that means that we have to have significant growth in those specialty ingredients. And then, I do think that that's kind of where we're seeing the industry growing at as well. Ilene S. Gordon - Chairman, President & Chief Executive Officer: And if you look at some of the capacity additions that we've announced when we announced $100 million of capacity for specialty products, that's supporting the growth with the right features, where we have unique capabilities or technologies. And so, the category, when you ask about, well, how fast is the category growing, I think certainly the specialty food demand by the consumers is growing two times to three times the core, but it's a new category and that's why we had to add capacity to have those specific features, but again, we're a leader in that area and certainly in the texturizing field.

Okay. Thank you. I'll pass it on. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Okay.

And we have a question from Adam Samuelson with Goldman Sachs. Please go ahead. Adam Samuelson - Goldman Sachs & Co.: Yeah. Thanks. Good morning, everyone. First, maybe on that – following up on the question on Penford, Jack and Ilene, the 10% return hurdle, maybe help us think about the path and the timeline to actually exceeding that on Penford? I mean, I look at the business even post synergies based on what they earned in the past, and it looks like you're starting at about a 6% to 7% return on capital employed, if the 10% return hurdle is going to be hit with growth in specialty, you're talking about a more than 50% increase in the profits at the company level let alone the specialty business. Help us think about the timeline to actually hit that benchmark. Jack C. Fortnum - Chief Financial Officer & Executive Vice President: Adam, and just a couple of clarifications on your calculations there. We commented on the cost synergies only and there is further network optimization, because we do think that some of their business was sub-optimized in terms of how they were supplying their customers and things. So that really wasn't factored into those numbers. In addition to that, we see good growth opportunities outside of the U.S. with some of these product categories, which will accelerate the growth as well. And so, we have – I'm not going to lay out exactly which year we'll be breaking the 10% hurdle rate on there, but I do think that within a two year to three year time horizon, we should be well above our return on capital employed on the valuation that we acquired Penford at, and I think that's a reasonable perspective to take in terms of how we're…

And to the presenters on the call, we have no further questions in queue. Ilene S. Gordon - Chairman, President & Chief Executive Officer: Yeah. And so, let me just sign off. I just want to reiterate our confidence in our business model, strategy and long-term outlook. We remain keenly focused on shareholder value creation and we're committed to delivering shareholder value. So, that brings our first quarter 2015 earnings call to a close. Thank you again for your time today.