Good morning and welcome to the Newell Brands fourth quarter 2016 earnings conference call. At this time, all participants are in a listen-only mode. After a brief discussion by management, we will open up the call for questions. As a reminder, today's conference is being recorded. A live webcast of this call is available at the newellbrands.com on the Investor Relations home page under Events & Presentations. A slide presentation is also available for download. I will now turn the call over to Nancy O'Donnell, Vice President of Investor Relations. Ms. O'Donnell, you may begin.

Good morning. Thank you for joining us. During our call today, we'll discuss fourth quarter and full year 2016 results and provide an update to our full-year outlook for 2017. On the call, we have Mike Polk, Chief Executive Officer; and Ralph Nicoletti, our Chief Financial Officer. Before we begin, I'd like to point out that we will make certain forward-looking statements about our expectations for future plans and performance. Actual results may differ materially due to a number of risks and uncertainties which are described in our press release and in the Risk Factors section of our SEC filings. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances. We will also refer to certain non-GAAP financial measures. We provide a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures in our press release and in the slide presentation on the Investor Relations section of our website. And finally, I'd like to ask that you help us stay within the time schedule for the call by limiting yourself to one question during our Q&A section. Thank you. And now, I'll turn it over to Mike.

Thank you, Nancy. Good morning, everyone, and thanks for joining our call. I'm very pleased to have the opportunity to update you today on our work to transform Newell Brands into one of the leading consumer goods companies in the world. We've made great progress in 2016 and have very good momentum on a number of different fronts as we enter 2017. We achieved solid fourth quarter and strong full-year results. Full-year core sales growth of 3.7% was at the high end of our original 2016 full-year guidance range of 3% to 4% with excellent results on our Writing, Baby, food, beverages, appliances, and Waddington businesses. We delivered nearly 4% core sales growth in both North America and EMEA and over 10% core sales growth in Latin America for the full year. Full-year normalized earnings per share was $2.89, also at the high end of our original 2016 full-year guidance range of $2.75 to $2.90; an increase of nearly 33% compared to prior year. We have aggressively deleveraged the balance sheet, paying down over $2 billion of debt in the nine months since the creation of Newell Brands. Importantly, over the summer, we completed a comprehensive strategic assessment of the company and have driven into action a new corporate strategy that strengthens the portfolio through both acquisitions and divestitures; focuses resources on the categories with the greatest right to win; invest in broadened growth capabilities like insights, design, and innovation; and creates an enterprise-wide ecommerce division that will have responsibility for our ecomm growth across our total portfolio. The flexibility to invest in these new capabilities and behind our brands is enabled by our commitment to drive down the cost structure of the company. In 2016, we delivered over $210 million of incremental cost savings through synergies and Project Renewal,…

Thanks, Mike, and good morning, everyone. As Mike noted, we made significant progress throughout 2016 in transforming our organization. We achieved 3.7% core sales growth while delivering over $210 million in synergies and Project Renewal savings and progressed deleveraging the balance sheet. We also refined our portfolio with some strategic divestitures and acquisitions. Our fourth quarter results were solid and in line with guidance. Fourth quarter reported net sales were $4.14 billion, a 165% increase versus last year, which was largely attributable to the Jarden transaction. Core sales increased 2.5%, driven by strong results from the Writing, Baby, Home Solutions, and Outdoor Solutions businesses. For the full year, core top line increased 3.7%. The year-over-year improvement in operating results down the income statement was driven by a number of overarching themes: strong operating income growth on the legacy business, the profit contribution from the Jarden and Elmer's acquisitions, and Project Renewal savings and synergies on the positive side. Partially offsetting those positives were the impact of increased advertising and promotion investment, negative foreign currency, increased amortization of intangibles, and higher interest expense, tax rate, and share count. Reported gross margin was 36.8% compared with 38.3% last year. Normalized gross margin was 37.2% compared with 38.5% last year. The declines in reported and normalized gross margins were driven by the negative mix effect related to the Jarden transaction, the deconsolidation of Venezuela, and the unfavorable effect of foreign currency, which more than offset the benefits of synergies, productivity, and pricing. We reported SG&A expense of $976 million, or 23.6% of sales, a 710-basis-point decline versus last year despite higher acquisition and integration costs. Normalized SG&A expense was $861 million, or 20.8% of sales, a 400-basis-point decline. The improvement in SG&A to sales ratios both on a reported and normalized basis is…

Thanks, Ralph. Let's now turn to a discussion on 2017 guidance and the outlook for the year. This morning, we updated our 2017 full-year guidance for core sales growth and normalized EPS and provided guidance for the first time on full-year net sales. We've added a net sales guidance range in 2017 given the scope of mergers and acquisitions activity and the continued volatility of foreign exchange. Our outlook for 2017 net sales is $14.52 billion to $14.72 billion, which represents 9.5% to 11% net sales growth compared to prior year. The guidance reflects our current expectations for the timing of acquisitions and divestitures, the latest view of foreign exchange which has worsened from our prior guidance, and our latest view of core sales growth. The company has adjusted its 2017 full-year guidance range for core sales growth to 2.5% to 4%, lowering the bottom of the range from the original guidance of 3%. This revised outlook reflects our expectation of continued bricks-to-clicks shopper migration, causing some retailers to rebalance store count, reduce inventories, and reconfigure ordering patterns as some retailers did after Black Friday this past quarter. The 25 basis point reduction in the midpoint of the core sales growth range is necessary to accommodate recently announced store count reductions and our new expectations for inventory rebalancing. We expect this rebalancing to be more pronounced in the first half of 2017 and to lessen in the second half of 2017 as we lap this past year's changes. In this context, we believe core sales growth will sequentially accelerate, with the core growth in the first half of the year in the lower half of the full-year guidance range. We expect first quarter growth rate to be roughly in line with the fourth quarter of 2016 as we start up…

Thank you. Your first question comes from Bill Chappell with SunTrust.

Thanks. Good morning.

Hey, Bill.

Hey. Just first question, Mike, kind of looking at the commentary on the fourth quarter and the department store type businesses that were weak, I mean, that's been something that's been going on for several years. I guess, help us understand how this is different and then maybe how acute it is in terms of Yankee Candle and Calphalon versus how it could affect other parts of the business.

Sure, great question. There were two spaces where we saw pressure as a result of the bricks-to-clicks migration. One is in mall-based formats, and there's two different scenarios there, I'll explain in a second, the other is more broadly across the retailer landscape, and we saw different activities than we've experienced up until now in a broader sense. First, in retail-based formats, there are two dynamics. We have a couple of businesses that have presence in retailers that are anchor retailers to your typical mall, Calphalon and Yankee, and some other businesses as well. And clearly, you saw the reporting that went on there in the fall – or in the holiday season, and that clearly had an impact. The other thing that you may or may not see given your coverage universe is mall-based foot traffic was down high single-digits during the holiday season, and that was very different than prior holiday seasons. So for us, that has an impact on our Yankee retail footprint. The good news on Yankee is that we had really strong international growth, really strong eCommerce growth, and as we gear up our North American activity with respect to wholesale presence and as we enter Canada, we will be able to, kind of, offset some of these structural issues that are going on in mall formats. But the issue that we dealt with was broader than that in that we saw a lot of changes going on, and particularly in the way people were managing inventories post Black Friday, and I suspect this has a lot to do with foot traffic and comp store dynamics in those retailers. And specifically on the appliance business, you would typically get a reorder after Black Friday, just like we do on the Writing business after the back…

Got it. That's helpful. Thanks.

So that's the context. That's the specifics around those dynamics.

No, that helps a lot. And, Ralph, one question on the interest expense. So, what you'd said, I think $475 million for 2017, kind of implies a $20 million decline versus kind of the fourth quarter run rate. But if I'm looking post the Tools divestiture plus cash on hand, you've probably got close to $2 billion in cash, plus I would assume you get some from Winter Sports. So are you assuming that there's very little incremental debt paydown? I'm just trying to couple that. It would seem like that interest expense number is pretty high.

Bill, the run rate of interest expense going into the year is over $100 million. And then, we are planning to use the U.S.-based proceeds from the Tools divestiture to delever further. So, what you're seeing is basically the step-up from the full-year run rate because we pick up another three-and-a-half months of interest expense versus this year in terms of where we are in leverage, but then we'll be using the proceeds to delever during the year. So, you net out to the $475 million.

Okay.

And, Bill, don't forget, we're going to use the offshore component of the Tools proceeds to pay for Sistema.

Right. Okay.

Which is a New Zealand-based company.

But the plan is to immediately kind of take the proceeds and pay down debt? The net proceeds after the...

Yeah. The U.S. proceeds, that's correct.

Okay. Thanks so much.

Your next question comes from Dara Mohsenian with Morgan Stanley. Please go ahead. Dara W. Mohsenian - Morgan Stanley & Co. LLC: Hey. Good morning.

Hey, Dara. Dara W. Mohsenian - Morgan Stanley & Co. LLC: Maybe just a follow-up on the question. As you look forward at your 2017 core sales growth guidance, obviously, you lowered the low-end of the full-year range to 2.5%. It sounds like that's where you expect Q1 to be, but you did talk about an acceleration in the balance of the year. So, it doesn't really seem like 2.5% at the low-end is what you're expecting, so I guess just can you parse through that? Could Q1 actually be worse than 2.5%? What's your level of visibility on Q1 given the retail environment? And then on the balance of the year, what gives you confidence in an acceleration, and are you expecting also a tangible benefit from putting heritage Newell practices to work on the Jarden side?

Great question, Dara. This year will be an execution-led year because the innovation impact from the investments we're making now and extending the capabilities will yield, innovation-led growth on the legacy Jarden businesses in 2018 and beyond. And as we've have said previously, Q1 is the period where this new organization is going to start up. It's sort of like an SAP start-up. You go from crawling to walking to running, and that's the way I'm thinking about Q1, although we had a very brief and prodigious childhood, so we didn't have much of a crawl phase. But we're walking and we expect to be running by the end of the first quarter. So, that certainly is a factor in influencing how things play out. I think what I said in the script was that Q4 was a good – was roughly a good number to kind of benchmark for Q1, and then you should expect acceleration from that forward. It's false precision to say that I can say it's going to be 2.5%, 2.6%, 2.7% or 2.4%, 2.3%, 2.5%. The first quarter every $3 million of revenue is a tenth of a point of core sales. So, we're doing now $35 million a day, so that's just a couple of trucks that don't show up and you're down a tenth or you're up a tenth. And we don't manage it that precisely. But I think that's a good benchmark to use. And the month of January was pretty close to where we thought it was going to be. There's no big surprises there. Some of the inventory issues we had in December reversed as a positive, and some of the structural issues continue. So, I think the way I articulated it is the way I'd book your plan, that…

Your next question comes from Lauren Lieberman with Barclays.

Thanks, good morning.

Hey, Lauren.

I was just curious. On the Yankee conversation. So it was in June when you said in your strategic plan you already assumed some of these retail shifts and the shift to wholesale. So to what degree have you built in maybe store closures to your 2017 plan for Yankee? And have you already assumed that – I'm splitting the difference on your comments on inventory issues and mall traffic, but did you sort of anticipate there being this kind of magnitude like 100 basis point drag to core sales growth for 2017, or is that materially worse? Because it sounds like the core sales growth ex-macro factors, if you will, that things are in a pretty good spot and that there was minimal disruption from sales force changes and organizational changes this quarter. Thanks.

I feel terrific about executing through the change. That obviously – as I talked about the transformation, that was the big risk. And I don't feel like that issue is going to be a problem for us. So we've come through that period. There is a startup curve, like anything as big as what we've just done. Remember, we reorganized our entire sales force. We consolidated business units from 32 to 16. Those are big, big changes. But those changes are set. The teams are in place. We were just together last week with the top 100 in the company, and it was a really constructive, good, engaged dynamic. So I was really very pleased with that. I think your comment about the 200 basis points of core that I referred to, I think there's one aspect of that that's right that's just a timing-related thing, which I don't think in all cases we'll get back, which is the inventory timing and order pattern shift. The more structural issue on bricks-to-clicks and the speed with which we can ramp our ecommerce capability, I think the marrying up of those two opposing trends is really the dynamic we're trying to manage where we want the e-commerce scale-up to more than compensate for the bricks-to-clicks issues for traditional formats. And that's particularly an issue in the retail mall sector or that format. And I think we'll get pretty close to getting ourselves in a position where the e-commerce scaling happens and quickly surpasses the contraction on the other side. That said, our plans always had us taking a hard look at stores, store counts, restructuring that network. That's all baked into the strategic plan and the Growth Game Plan. The timing of our thinking through that was a little bit further out.…

Great, thanks so much.

Your next question comes from Bill Schmitz with Deutsche Bank.

Hey, Mike. Good morning.

Hey, Bill.

Hey. Can you just tell us what the program to date, the 2016 and then the 2017 outlook, is for both Project Renewal and then the deal synergies? Because I think you just gave us an aggregate number of $300 million.

Let me break it down a little bit for you. First of all, neither the $210 million that I quoted for 2016 or the over $300 million that I quoted for 2017 include any of the tax synergies, just to be clear. So the $210 million excludes about $12 million of tax synergies that we delivered in 2016. And we expect to deliver around $20 million of tax synergies in 2017 on top of the over $300 million of cumulative – of incremental, I'm sorry, Renewal and cost synergy programs. So that's how you have to think about it. And we'll be more disciplined in providing you those two sets of numbers because obviously one is pre-tax and the other is after-tax impacts. As I said in the script, we have actioned over $400 million of cost synergies. So that excludes...

Taxes.

Yes, it excludes taxes. And when we say actioned, that means there's a formal project underway with a clear line of sight to delivering a cost benefit into the P&L. Now the reason that we haven't taken the synergy number up or the savings number up for 2017 is that some of that is baked in. Some of those $400 million in cumulative savings is baked into 2017, and some of that flows out of 2017 into 2018. But we did give you a bit of news today, which is $500 million – we clear $500 million banked in the P&L by Q3 2018, which is well ahead of where we said we were going to be, and it's just another bit of news regarding accelerations of savings delivery. We have not raised 2017 guidance at this point with respect to synergy delivery because we don't expect now, for any of those 18 synergies, to flow back into 2017, although that is a possibility going forward. So how far over $300 million will it be, which I think is what your question is, it could be materially over $300 million. And right now, our plan assumes modestly over $300 million.

Thanks, guys. And what's the breakdown between the Renewal savings and the synergies from the deal, though, on that $300 million?

The synergies from the deal start to become the vast majority of the savings in 2017. So you're talking $60 million – $70 million roughly of Renewal savings in 2017. And the balance will be cost synergies, and that lessens in 2018 further. So the thing on Renewal that we have to do is because we're selling the Tools business, there was a bunch of Renewal savings connected to things we've disposed, so you can't count on those anymore. So the number is going to be more and more cost synergy driven.

Okay, that's helpful. And then if I look at the Jarden two-year stacks and they're really rough numbers, so the data is not perfect, but I think it went from like 8% in the September quarter to 4% this quarter. And if you back in guidance, it looks like 2% in the March quarter. So do you think the entirety of that slowdown is the destocking in the appliance business and then the Yankee retail struggles?

No, I think part of it is Yankee loss distribution, things like Yankee and Coleman loss distribution. So I think that's primarily what's going on here. I mean, if I look at the Q4 numbers, we had some really good numbers on legacy Jarden businesses. It was nice to see Outdoor Solutions start to respond. And within that, you saw high single-digit growth on Pure Fishing. You saw Technical Apparel rebound with double-digit growth. You saw Team Sports, after The World Series, up in high single-digit type of growth. Waddington delivered mid-level growth. Jostens grew nicely and was accretive to growth in the fourth quarter. The only issue out there was Coleman. And then within Branded Consumables, Yankee International and Yankee eCommerce grew really nicely in the fourth quarter and had the challenge of North American retail as an issue, but still Branded Consumables grew. So I think in the appliance business, as I said – did I quote a specific number on appliances in terms of the loss? No. I mean, it was over $20 million; $25 million of orders that we would have expected from the middle of December through the end of the year that didn't come. So if you back that out and look at the appliance performance in 2016, appliances grew close – well, actually without even backing it out, taking the hit in Q4, appliances grew 5%, close to 5%. So that's a really good number. So I think the issues that we've had on Jarden related to the bad winter last year or the first half of Marmot sales, that's now recovering nicely, it dealt with the loss distribution on Coleman which was a huge number, it dealt with the Yankee loss distribution in Target, and it dealt with having to lap and…

Okay. Great. Thanks so much.

Your next question comes from Nik Modi with RBC Capital Markets.

Thanks. Good morning, everyone.

Hey, Nik.

Hey, Mike. So I just wanted to kind of follow up on some of the commentary you had on Bill's question. If you benchmark Jarden today kind of from where you were with Newell when you came in to take over the company, can you just give us some analogies, compare/contrast? What's going better, what's going the same, what's maybe not hitting your expectations? Because I think a lot of us that are supporting the story, kind of, go back to the analogy of Newell and what you did there and how that story progressed over several years. And so that would be helpful just to kind of provide some context on how you see the Jarden business within that landscape.

Yeah, I think this is déjà vu all over again. The reason we bought this and combined with this company is because we saw the potential of these products to benefit in the same way – in these categories to benefit in the same way that the Newell Rubbermaid portfolio did through the application of the brand development model that we deployed across the top of those legacy Newell businesses. And so what we're doing is taking that playbook and extending it to a broader cross-section of categories, as I've said before. And what we're doing – what's different this time, expectations were quite low on Newell Rubbermaid. The company was not performing. Whereas as these two companies come together, expectations are higher because both companies were performing. We're moving with much greater speed to get the transformation work done. We did – in the fourth quarter, it took us about a year-and-a-half to do at Newell Rubbermaid, organizationally. So we consolidated the sales organization. We consolidated the business units. We installed the new brand development model. We centralized IT and legal. We created corporate disciplines around some of the centers of excellence in HR and finance. Those things took us multiple quarters to do at Newell Rubbermaid. We did it in the U.S. in the first quarter. And so that's behind us. So what took us – we had a longer ramp period on core growth acceleration in 2011, 2012, 2013 than we expect to have in this chapter of the story. And so we've said we should see sequential acceleration in our core growth rate from the transition quarters of Q4 2016, Q1 2017 to acceleration starting in Q2, Q3, Q4 and then really ramping in 2018 as the ammunition arrives, the new product ideas and the money.…

Great. And, Mike, just quickly, any areas where you're not happy with kind of market share progression? I mean, retail environment is put aside, just trying to get a sense if there's any issues and any businesses that kind of are surprising you or where you're losing share?

Yeah, I'm never satisfied. I mean, that's a character flaw. So it's – we don't do a lot of celebrating. We have a lot of opportunity. I always bring – I look at our Writing business which has a market value shares in the U.S. now around 48%, 49%. That's huge progress from where we were, but I remind people that Frito-Lay in the 1990s went from a 40% to a 60%. And we are driven by this algorithm of trying to get to a 40% share and relative market share advantage of 2-to-1. That's when in my experience in multiple categories over almost 34 years now when you get that algorithm right, you profit through scale. So I'm not happy that we really have that set anywhere other than a couple of key sells. So the exciting thing about what we're trying to do is the opportunity is all in front of us. We can look at that 49% share, 48% share in the U.S. and look at the relative share to BIC, for example, and be very pleased with ourselves. But that's one country. So we need a string of eight countries that have that kind of relative relationship. And you can only imagine how much growth comes if you're successful at creating a repeatable model in these categories that can deliver that outcome. So that's the framework for success for me. So I'm generally not happy with where we are. It's not acute to one particular – or specific to one particular category because I understand the upside that's possible. And we're not up against very – we're up against easier competition than people I've competed against in the past. And that's not to be disrespectful, but I just don't think, given our scale, they have the potential to create the capability suite that we're creating, and therefore, we should win virtually any battle we engage in. And so I can't get distracted by the here and now and the progress we've made. I only want us focused on the destination, and that's 40% share in every country that matters to us, a relative market share of 2-to-1 in every category that matters to us. And that won't happen in my lifetime, just to be clear, but that ought to be the destination.

Okay, thanks a lot.

Your next question comes from Wendy Nicholson with Citi.

Hi. Not to belabor the point, but I just wanted to go back to Yankee for a minute. Can you remind us what the distribution split is in the U.S. business right now, how much are the company-owned doors and how much are through Walmart and whatnot?

Are you talking – let me give you a sense of where we are and where we're not. We're not in distribution in Target. We're in distribution in Walmart with American Home, but not across the full network. We're not in distribution in Amazon, but we are today now with distribution in Amazon, and we're building our presence and assortment in that channel. We're in bits of the Kroger network, but not all the Kroger network. We're not in the Ahold network, but we could be in the Ahold network as we get to that. We're not broadly distributed in drug, but we could be broadly distributed in drug. And we're not present at all in Canada. And when I say at all, there's probably some business that bleeds over. So we have tremendous opportunity there. We've got a $500 million-plus retail business in the U.S., so that's a big bit of the portfolio. We've got a very big European business that's growing double-digits, close to $300 million probably this year, and with the Prague factory, we'll be able to drive that harder and further. So in broad terms, that's how we're structured.

Because my question is trying to figure out – I know you've said in the past that you know that business, you served on the board, you like that business, and I hear, obviously, there are big opportunities to expand distribution, and it sounds like you've got ideas about how to innovate in that category.

Yes.

But I mean, just looking at the Nielsen numbers in the U.S., and maybe this is just transitional data, but the Nielsen numbers are terrible, even though the level of promotional spending went up year-over-year in the fourth quarter. So it's not just that I'm having a hard time sharing your enthusiasm for that business, but I'm wondering, the timing on when that business – I mean, clearly, there's the retail mall traffic stuff, but when do you think that we're going to see year-over-year growth in that business in those channels that Newell already sells, getting into Kroger, getting into drug, whatever it is but also making the core business better on a year-over-year basis that we can see in Neilson?

You're not going to see it in Nielsen as broadly as you'd like to see it in Nielsen because in the very near term, you've got the effect of losing Target distribution, which is going to show up and disproportionately skew your read through Nielsen. We don't use Nielsen to track the business here. IRI is our partner and we've got a custom panel that covers the footprint. But you're right that in broad terms, because of the Target dynamic, you see a decline in the wholesale side of the business, and you don't pick up other types of formats in those numbers as I recall them. Nielsen was a Kraft and Unilever partner and we had to supplement Nielsen to get a full view of landscape. But your fundamental question is when do you see the North American business flip positive. And I think it's dependent on how quickly we get the distribution broadened. We want to fill out the store count at Walmart. We'll think about what brands to leverage. We have the additional leverage of WoodWick now in our portfolio, which can play a role. We've got a footprint. We've got a big business at Bed Bath & Beyond. And so you're just missing a whole bunch of our universe. We can – offline, we'll try to get you what the coverage – what we think the Neilson coverage looks like on the U.S. footprint. That might be helpful for you. Now that said, I don't think it happens in the first half of the year that we pivot the wholesale business. But from about mid-year onward, we should start to get some wins at big places. And I'm not just speculating there, I know we've got stuff going. So that will help. I think retail will take longer. We're taking a strategic look at that whole network starting the next couple of weeks. And we'll come to you as we make changes if we choose to make changes as a result of that work. I'm optimistic the U.S. retail business can make a contribution, but the future of our home fragrance business is not retail-based. It's leveraging our core route to market around the world. So don't expect us to be opening stores in Europe or anywhere else in the world that we don't have them today; we won't be. We'll be building out our ecommerce platform. We'll be building out our traditional retail relationships and scaling the category in that way.

And when you think about that business with the changing distribution mix, that business should be structurally higher operating margin than the fleet average. Is that fair to say?

It is, except for the tail of the retail format.

Yes, okay, thank you very much.

It's very accretive. It's very accretive at both gross margin and operating margin.

Got it.

And your next question comes from Steve Powers with UBS.

Hey, Steve.

Hey, good morning. So I've got two questions and I'll ask them together just in the interest of time, if I could. The first one relates to cash flow. And at least versus our expectations, the cash flow was really strong this quarter, as was debt reduction. I was just curious how the cash flow compared to your expectations coming into the quarter. And then looking ahead, if you're not in a position yet to call where you expect cash earnings to land in 2017, can you confirm that you still plan to devote some time to that in a few weeks at CAGNY? And then second and separately, I guess could you help clarify why the tax benefit you've called out in Q3 2017 isn't being treated as a one-time item? I guess my thought is the implication that those benefits continue in some form in the future perhaps spread throughout the year in future periods. Thanks.

Steve, it's Ralph. Let me take your second question first. On the tax benefit, which is new information versus the last time we all communicated, that's from some work we've been doing on tax planning. and we've got a very good line of sight and confidence level in that. And just the nature of the tax planning that we're doing is it is one-time in nature, and we expect it to hit, as we look at it today, in the third quarter, as Mike said in his remarks. It is something, though, that is one-time in nature, but nonetheless a benefit. So we'll plan out the tax rate beyond 2017. I wouldn't expect us to be, though, in the rate of 23% ongoing. I think more back into the range that we had previously. Then as it relates to cash flow, I feel very good about the cash flow in the fourth quarter. It came in pretty much right where we expected it to, and we deleveraged the balance sheet as we expected. I'll give more insight on 2017 at CAGNY as we progress through. And maybe just a couple of comments I'd say underneath the results on cash flow, one is on working capital. We made probably more progress on payables than we did on inventory and receivables. So more opportunity there over time, but we did make good progress on payables, particularly as it relates to some of the procurement initiatives that we've been driving for on the synergy program. We've been able to make progress on the payables side there, and that should continue in the future. The longer-term benefits on working capital will come as we begin to look closer at our distribution network and our systems implementations, which are really further out on the timeline, which we've talked about before.

Okay, thank you very much.

And your next question comes from Jason Gere with KeyBanc Capital Markets.

Okay, thanks. Good morning. I'll make these quick also. I guess the first question really on the A&P spending, so you talked about stepping up in the fourth quarter. But the sales obviously stepped back in December just on some of the structural stuff that you talked about, the inventory. So as you think about 2017 and another step-up coming through, can you talk about the ROI or the efficiency that you're getting on it, how maybe you're looking at it a little bit differently? And what's the right algorithm as some of the retail landscape shifts to alternative channels, how you should be deploying your cost savings towards that A&P spending to get the best return?

So we increased A&P in 2016; we'll do it again in 2017. We adjust our spending as we go depending on whether the things we're doing work. So nobody ever gets to keep their A&P budgets, promotion a little bit different than advertising. But advertising budgets tend to go and are spent on new ideas, whether it's an innovation or whether it's a commercial innovation, spent on new ideas. And so we've learned that anthematic investment or general continuity spend in consumer durables isn't a great use of A&P. We continue to believe we've got lots of opportunity to grow through building our brands, equity and household penetration and awareness. And so we will continue to invest, Jason. I think the thing to hold us accountable for is whether the POS growth responds to those investments. And where we spent and what we spent on, we measure everything. We're data junkies, so we measure everything. And we'll find a forum to show you what worked and what didn't and the relative responsiveness. So I think you can count on us to be really scrupulous with our money. We don't want to waste it, and we have incentive to let it flow through the margin if in fact it's not going to yield the growth we expect.

Okay. And then the last question, if you think about the sales range you have for 2017 versus where Street numbers were probably above $15 billion, so now you're saying $14.5 billion to $14.7 billion, so you've got about $0.5 billion reduction. I think you've done a really good job talking about the core sales and some of the dynamics there. But unless I missed it, can you talk how we should be thinking about the timing of some of these divestitures now? Before, I think you were saying January 1 to plate it. And, obviously, I know everything is very loose, but that and then currency as well, you're calling for a bigger impact coming through. And if I just look like three months ago, the euro, the British pound really hasn't changed all that much. You're not going to be in Brazil going forward, which I guess would be a benefit. But I'm just trying to think about what's changed on the FX side so those two underlying points secondary to the core sales changes.

Jason, on the FX side, what's really shifted in particular over the last several months has been the peso and the Canadian dollar in particular, and a little bit more so as we take the outlook on the pound on average. Those are the three big moves, but more on the peso and the Canadian dollar versus the last time we talked.

Which works against us on sourcing. So I think that's on ForEx. Your question on M&A timing, obviously we haven't closed the Tools deal yet, but we're waiting to clear one more hurdle that's outside of the U.S. And hopefully over the next couple of weeks, into late February, we find our way over the finish line there. The ski auction is in full stride now, and we've said Q2 is the likely window for that to occur. So those two offset each other a little bit longer with Tools in our P&L as a positive; a little bit longer with skis in our P&L is actually a negative because skis loses money in the first half of the year. So the net effect of those things have effectively washed out, and everything else is just too small to make that material a difference.

Okay. Great. Thanks, guys.

Your next question comes from Joe Altobello with Raymond James. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Thanks. Hey, guys. Good morning.

Good morning. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: I guess the first question on the Coleman repositioning, maybe get an update there. How should we think about Coleman in 2017 versus what you guys saw in 2016? And then I guess a related question to that is how much of getting back some of that loss distribution at Coleman as well as Yankee is baked in to the 2.5% to 4% core sales growth?

Coleman gets back to growth in 2017, so that's a nice recovery. It's not accretive to growth but it gets back to growth in 2017 as we broaden the distribution of the core items. And we regain some loss distribution at Walmart. So that's important and positive. Although Coleman – just to be clear, Coleman doesn't hit its stride until the brand work that we're doing brings bigger, better innovation to market in 2018. That won't happen this year. This year will be a year that's more commercially led, and it'll be the presence of some positives, which is broadened distribution footprint in the absence of negatives, which is the absence of the loss distribution impacting revenue streams. So I think that's how I would characterize this year. We're optimistic about our outdoor and rec business. We've got tremendous momentum in beverages. Marmot seems to have turned the corner. We've got a leadership team there that seems to be really jazzed and energized about driving the agenda. And it's going to be interesting to see how we're able – when we're able to sustain the momentum on Team Sports. We've had a nice run since the Cubs-Indians World Series on Team Sports, and that looks like it's going to continue into 2017. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: And how much of that is baked in to the core sales number for next year with Yankee?

All baked in. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Okay. Great. Thanks

And your next question comes from Kevin Grundy with Jefferies.

Good morning, guys. Ralph, I wanted to pick up on some of the tax commentary. Can you revisit for us or touch on the risk of a potential border adjustment tax, discuss what the company's doing to plan for that potential; any conversations you've had with representatives or lobbyists down in Washington? Then, unrelated to that, Mike, perhaps you can touch on what the appetite is for M&A. Should we expect further tuck-in M&A? There's obviously a lot going on with the company at this point. Core sales is a bit softer, I guess, than folks had anticipated. So given sort of the risk around that, what's the company's appetite to continue to pursue M&A in this environment? Thanks for the questions.

Yeah. Kevin, maybe I'll just start on the M&A side of it. Our capital priorities haven't changed. We need to continue to deleverage the balance sheet as we promised and committed to and supporting the dividend and the payout ratios that we've talked about. Those are our capital priorities. We look at M&A in this window of time for things that are bolt-on in nature in our core categories. And that was Sistema and with WoodWick are good examples of that. So we're always looking at those kinds of opportunities and things, but the priorities are what I mentioned earlier. As it relates to border adjustment tax reform and all those things, obviously, we are looking at our entire network and where there are different opportunities and risks and given the variety of different proposals, we're assessing that, but aren't taking any action because there's lack of clarity as to where all that will play out.

Like any other big change in landscape, when there are big changes, there's opportunity. Remember, we have 55 factories in the U.S., over 55 factories in the U.S., 55 held-for-sale. We have over 15,000 manufacturing jobs, supply chain jobs in the U.S. We have a very big manufacturing footprint in this country. And look at our competitive landscape. Look at our Writing competitors. Look at some of our other competitors and ask yourself where their factories are? People think about these issues in too superficial a way and at too high a level. There's opportunity in some of the things that are being discussed for share consolidation on our part as a result of some of the competitive dynamics. And so it's never as simple as the headlines. And you should expect us, though, just like with any other major inflection like ecommerce, to be on the front foot when the time comes and to have a point of view and a plan on what we're going to do to deal with it. And, again, don't get distracted by the press headlines. Think about – dive deeper like we have to into our networks and ask yourself the question whether there's more leverage or less leverage with the scope of manufacturing we have in the U.S. relative to our competitive set. And I think you'll conclude the same thing we conclude, which is make sure you look at it from both angles because there's as much opportunity as there is risk in some of these scenarios.

Okay. Thank you.

Ladies and gentlemen, that is all the time we have for questions today. I would now like to turn the conference back over to Mr. Michael Polk for closing remarks.

So look, this has been an exciting time for Newell Brands. It's been the most transformative year in our history. I know there are a number of other questions that were out there. To the degree you pick up the phone and give Nancy a holler, I'm sure she'll take your calls. And to the degree we can help you understand the underlying dynamics within our results and help you shape your thinking on the company, we're delighted to engage in whatever format and forum you might suggest. Thank you again for your support, and we'll talk to you soon.

Ladies and gentlemen, a replay of today's call will be available later today on our website, newellbrands.com. This does conclude our conference. You may now disconnect.