Please standby, we're about to begin. Good day and welcome everyone to the Scotts Miracle-Gro Q4 Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Jim King. Please go ahead, sir. Jim King - Chief Communications Officer & Senior VP, Investor Relations and Corporate Affairs: Thank you, Cecilia. Good morning, everyone, and thank you for joining the Scotts Miracle-Gro year-end conference call. With me here in Marysville are Jim Hagedorn, our Chairman and CEO; Randy Coleman, our CFO; Mike Lukemire, our Chief Operating Officer; and several other members of the management team. In a moment, Jim will share his thoughts about our 2015 results as well as some of the headlines entering our upcoming Analyst Day in New York. And Randy will cover the fourth quarter and full year financials as well as provide more detailed look at the 2016 guidance that we outlined in this morning's press release. After our prepared remarks, we'll take your questions. As I just referenced, we're hosting an Analyst & Investor Day event on December 10 at the Grand Hyatt Hotel in New York. We expect the presentations or the presentation portion of that meeting to begin at 9 AM. We'll work through the morning and then, hold a Q&A session as well as a lunch with the entire management team. We're still working on some of the details and we'll communicate more to you in the weeks ahead. If you are interested in attending the meeting, you can register by visiting our IR website, investor.scotts.com or by calling our Investor Relations department at 937-578-5968. Given the proximity of our Analyst Day meeting to today's call, our intent this morning is to not provide a great deal of color on our 2016 operating plans…

Thank you. And our first question comes from Bill Chappell of SunTrust.

Good morning. Thanks. James Hagedorn - Chairman & Chief Executive Officer: Hey Bill. Thomas Randal Coleman - Chief Financial Officer & Executive Vice President: Hi, Bill.

Just want to touch a little bit I guess, both on, looking back and on the guidance and specifically on lawn fertilizer growth or decline. For the guidance next year, you're talking about kind of a neutral mix, which I guess would imply that the other businesses grow faster than your highest margin business of lawn fertilizer. So, is that just trying to take a line of conservatism, are you looking at listings next year and have you lost any share, is there anything I'm missing as I'm looking at that? James Hagedorn - Chairman & Chief Executive Officer: No, I don't think you're missing. I think there is times when you guys feel like we're sandbagging you. This is one of the time I think the North American businesses is sandbagging me. We've spent quite a bit of time on this yesterday, as a matter of fact, as we prep for the call. But I think that overall what's in the budget and this is not what I expect to happen, but it's what's in the budget. It's pretty much up a little bit, but not recovering the decline, and I think that that's conservatism. That's what I would call it. So I think it's probably upside. I mean, we hope it is. I think the fall business looks really good right now. So I think we're pretty satisfied. We understand the sort of second half of the season in California hurt us, the late start in the Midwest and Northeast, and the rain in Texas definitely hurt the business. We're seeing normal business now in our fall markets. So I think probably there's some upside there, Bill, but it was one of those things where the numbers have come together really well without just completely torturing the group. So I was more or less happy to view it as conservatism in the budget that should allow us to get to upper end of that if everything goes well.

Okay. No, I sort of figured. Just wanted to check. The other question, kind of looking at the channels, and again on a lookback, past few years the DIY channels held in there okay, but the mass channel's really been the thorn in your side. It seems like it's gotten better this past year, but maybe you could kind of give us state of where we are on the mass channel and how that looks going into 2016? James Hagedorn - Chairman & Chief Executive Officer: I would say it doesn't seem to be better. It is better. And I think whether it's the attitude, I'll just call it, of the mass channel or the relationship with the merchant team all the way up to the more senior levels, I think it's back in the game is what I would say.

Okay, great. Thanks.

Our next question comes from Jeff Zekauskas of JPMorgan.

This is Ben Richardson sitting in for Jeff. James Hagedorn - Chairman & Chief Executive Officer: Hey, Ben.

On the projected gross margin improvement for next year, what are the biggest movers there just in terms of raw materials or fuel or the rest? Thomas Randal Coleman - Chief Financial Officer & Executive Vice President: So, Ben, this is Randy Coleman. The biggest impact is the larger (27:29) pricing. So we'll have about a point of pricing across the business next year and we'll also see about a $10 million benefit from commodity costs coming down year-over-year, whether we're talking about urea or fuel, and there's some slight offsets in other commodities that there's less visibility to, like peat cost certain grass seed varieties, but we think $10 million is a good number. And then if you're familiar with the revised agency agreement we have for the Roundup business, that will benefit by about $20 million next year as well the year-over-year increase. And then there are some headwinds to that. People in the plants getting small raises, there's some input costs from new products that we are taking pricing on next year that is an offset to that, but we feel pretty good about our range right now of 100 basis points to 150 basis points next year as a starting point.

All right. And just one follow-up on the (28:26). Just year-over-year what were the biggest improvements, particularly in global consumer whereby you had better operating income in this year? Thomas Randal Coleman - Chief Financial Officer & Executive Vice President: So, 2015, looking backward, it was really a year of sales growth. So we had fairly flat sales over many years, but our U.S. business up mid-single digits in 2015. Our home centers continue to do well, the mass channel did really well outside the big three customers. So we saw nice growth from other customers. And beyond that, as well as our LawnService business had a record year and had about a point of overall growth, so... James Hagedorn - Chairman & Chief Executive Officer: Look, what I would say is kind of everything but lawns had pretty darn good year. And the fact that that's just a high-margin business for us was sort of kind of screwed or mix up. But this was one of those years where it wasn't just as – Tomcat again did really well and that business continues to sort of do well under our stewardship. The Hawthorne business I think was well integrated by really pretty young group who has done a really good job on a fairly complex integration. And the overall consumer businesses, Europe made its numbers, LawnService did great. It's one of those things where it was a little bit of a hair-raising year, the late spring in the Midwest and Northeast, rain in Texas, drought in the West Coast. But in spite of all that, it was a fairly drama-free by the end of the year. So I think pretty much about everything went about as well as it did. You got to feel a little bit bad for the Lawn team. And I think that part of what I think the investor community needs to understand is that the Lawn business really is almost like a four-week business. If anyone business gets impacted by a late spring, it's going to be the Lawns business. Everything else you got this sort of long summer on sort of the weed side and the control side, the Miracle-Gro business is, I'd call that a short sleeve business. So you've got a lot of time to sort of make up there. Lawn at Scotts is really concentrated and it's not that the South helps very much, because a lot of those lawns come out of dormancy in sort of late March, early April. So the whole season for the entire country is going to happen at one time, and I think that's pretty much just what happened. It just was a kind of a tough early season, but other than that, I think everything went really well.

Okay. Thank you very much.

And we'll go next to Jason Gere of KeyBanc Capital Markets.

Okay, thanks. Good morning. I just have one housekeeping and then just a kind of real question. Hey, Randy, can you say what the FX impact you're expecting for 2016? I didn't hear that. I don't know if you gave it or not. Thomas Randal Coleman - Chief Financial Officer & Executive Vice President: Yes, for 2016 we think it's going to be very small. So call it $0.01 or $0.02 on the bottom line. This year it costs us about $0.04. So, really not a big driver at all overall of our (31:59).

Okay, great. And then I guess the other question. Just thinking about the acquisitions, and obviously with some of the – lifting leverage is going to continue to be a bigger part. Can you talk a little bit about where some of the adjacent acquisitions could come in? Like what are some of the areas that would make sense within the core business? Obviously General Hydroponics was a nice addition, but I was, one, guess thinking about how else we should be thinking about acquisitions in kind of leveraging the portfolio? And secondly just maybe with some of the past acquisitions, the cross-selling opportunities that you kind of see whether it's just fill-in distribution or really just kind of combining products and coming out with new R&D innovation? James Hagedorn - Chairman & Chief Executive Officer: Look, I think it's a seriously good question. I also think we're seriously going to be as specific as we can, and I think that there's a lot of variables between now and the next month, but I think we're going to try to be very clear a month from now, I'll call it, when we present. I'd say if you go back and look at the script, we're kind of saying North America good, Hydro good. We like the idea of products that are not just chemical. We believe water is important, particularly in the west. So I think that – we had a board meeting last week and Jim went from how we're going to like sort of signal a shift, excuse me, to the Street. And we went from sort of laying crumbs to Jim called it laying croutons. So view this as the croutons, but the real meal is going to be a month from now, and I would just say, if you go over and look at the script, I think it's those croutons are out there, but I'd say, please just let us present it properly and I think the story will be one that people will appreciate – so, anyway. I know it's a real question. I think we'll give a real answer in a month.

Okay. And then if I can then just throw in one last question. I know this is one you don't get too often, but as the retail environments shifts a lot more to D2C and online, and I know with some of your products it may not make sense to be heavily invested in the online. But I was just wondering, if you could talk, and again this may be croutons again for what you talk about next month, but really about the role of the D2C channel as brick and mortars really is changing out there, and how you guys can really benefit and kind of tack onto the growth that you've been seeing just in the core channels? I was just wondering if you could maybe provide a little bit of croutons at this point. Thanks. James Hagedorn - Chairman & Chief Executive Officer: You got it. Mike, do you want talk about it? Michael C. Lukemire - Chief Operating Officer & Executive Vice President: I think, in the D2C all the retailers are going D2C and we're full participating with them and then we're also involved with Amazon, so it's around $50 million of shipments at this point. And we'll continue to explore that and develop that as that moves forward. And remember, we have a – our service business is a direct to the consumer business as well.

Right. James Hagedorn - Chairman & Chief Executive Officer: Look, I think it's important. This is one that's going to require a lot of care and coordination with sort of our existing partners in that the concentration of our business with four accounts in North America is huge. They have their own efforts there and we want to just stay with them. The Amazon business is growing; it's the law of small numbers, but growing very rapidly. Personally, I'm an online shopper. And sometimes, I do it through one of the existing retailers and a lot of times I do it with Amazon. I don't think we can act like that's not going to happen or is happening in lawn and garden. Certain products are a lot easier to ship direct to someone's home than others, but I think it's going to be a more important part of the business, but it's just very important based on our concentration with sort of existing brick-and-mortar retailers that we have a sort of balanced view because we do enjoy a very positive relationship that is – you just have to look at last year's results. A lot of what we're talking today was in dollars and in units the volume was really nice this last year. The dollars a little bit understate the unit volume increase. So what do I think? I think it's the future. And I think we're going to have to participate and the retailer is going to have to participate. We just got to do it in a way that doesn't get us into a battle with our really good friends. So that's kind of where we are.

And then... James Hagedorn - Chairman & Chief Executive Officer: And I think – and also to the extent that it's driving us to have to decide something now. I think everybody is trying to figure it out. And we're continuing to work with sort of the big dog in the space, Amazon, as well and that's a good relationship and I think they view lawn and garden as an important category for them as well.

Yes. And I agree with that. And obviously, your business is a little bit different than maybe some of the apparel companies out there where it's obviously a little bit more seamless. But I'm sure next month you will talk more about it, especially in the context – part of your strategy is getting customers in the store to make those purchases, especially during those weather-impacted seasons and stuff. And obviously, this is a very different approach; maybe it's the panacea to some of those issues out there, but look forward to hearing more about it next month. Thanks, guys, for answering my questions. James Hagedorn - Chairman & Chief Executive Officer: You bet.

We'll go next to Olivia Tong of Bank of America Merrill Lynch.

Hey, thanks. Good morning. James Hagedorn - Chairman & Chief Executive Officer: Hey, Olivia.

How are you? James Hagedorn - Chairman & Chief Executive Officer: Good. You?

Good. Thanks. I just want to – first on the fiscal 2016 sales outlook. I just wanted to check if there was any impact from acquisitions still in there just from things that you've announced or any expectation for acquisitions embedded in that outlook. And then just following up, how do you feel about your inventory levels right now at retail? We've had a couple of shifts through the quarters and just kind of curious where we stand at this point? James Hagedorn - Chairman & Chief Executive Officer: Randy is signaling that he wants to deal with you. Thomas Randal Coleman - Chief Financial Officer & Executive Vice President: Hi, Olivia. On your first question about the sales outlook and the impact of acquisitions, it's about 2.5% year-over-year. The biggest pieces of that are the revised agency agreement which adds about $20 million and then the benefit from the General Hydroponics business that we didn't close on that deal until the end of March. So we pick up $25 million plus for next year on that number. And then your question about retail inventories, it does bounce around a lot because it's just a point in time, but we closed the end of September with retail inventories in the mid-single digits. And because we've had strong POS here in October, I think if we looked at it today, we probably would be a little bit behind last year just because we've had really good consumer takeaway, but again, not a big story by any means.

Got it. Got it. And then on Hawthorne, is there anyone else who is trying to consolidate the businesses like you? Like, are there any other natural acquirers for the assets which you have interest in? James Hagedorn - Chairman & Chief Executive Officer: Let me start with the sort of philosophy. I think we're very interested in the category and we're well capitalized. So I think we probably are kind of first in. I think there is probably some non-strategic financial types that are interested in the space. And part of what Mike and I are concerned about and we spend quite a bit of time with the Hawthorne folks talking about is that we think it's a pretty interesting category. I mean, it will be interesting to see how Ohio votes today, but we see it as a very interesting category that deserves further investment. I think Mike and I – the integration for that team, I think if you say that sort of since 2000, this was one of the sort of big acquisitions we've done. The integration on something like that's hard. I think you're dealing with family businesses. Their accounting is not always as tight as we'd like. And so therefore, there's just a lot of work to get everything kind of up to speed and under control the way we want it. They have been successful with that. And where I'm getting to is, I would say the concern Mike and I have, and this is part of how we've organized the business going forward, we have a completely rebuilt strategic group that includes both M&A and internal consulting, which means, we're running pretty skinny teams. So we're able to add bandwidth internally with good people who probably would have been released from the…

It does. James Hagedorn - Chairman & Chief Executive Officer: Yes.

Thanks so much. Appreciate it. James Hagedorn - Chairman & Chief Executive Officer: You bet, Olivia. Thank you.

Our next question comes from Joe Altobello of Raymond James. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Hey, guys. Good morning. James Hagedorn - Chairman & Chief Executive Officer: Hey Joe. Joseph Nicholas Altobello - Raymond James & Associates, Inc.: Just want to go back to the pricing discussion and get a sense for how those discussions have went, since many retailers, at least publicly, seem to be very resistant to price increases. In fact, some have talked about trying to recoup things like commodity costs and currency savings. How much visibility do you have into that incremental point? Is there a chance that some of that might get spent back on promotion later this year? James Hagedorn - Chairman & Chief Executive Officer: Look, first of all, we love promotional support. Promotional support goes together with off-shelf and so we like off-shelf and I don't know what the numbers are today. Mike might have a better one. But we probably sell half of our business off-shelf. And these Black Friday events are becoming kind of a big hunk of the business and they kind of make a break the season in a lot of ways. So I would say that I think the pricing happens. I'm not sure what Mike would say about increased – he can take it up and if there is increased promotional activity. I thought the pricing discussions were pretty good. To be honest, I wanted more from Mike, so he disappointed me a little bit. So I thought the pricing conversations actually went pretty well. The only thing that I – we adjusted Ortho pricing down based on our view and it didn't really affect our margins very much. We took cost out of the products where we said, do consumers really…

Our next question comes from Jon Andersen of William Blair. Jon R. Andersen - William Blair & Co. LLC: Hey, good morning. Thanks. James Hagedorn - Chairman & Chief Executive Officer: Hi, Jon. Jon R. Andersen - William Blair & Co. LLC: So, I wanted to start by asking about mulch. When you look at your core North American businesses, I think mulch has been probably the fastest growing of the businesses over the past few years. So could you talk a little bit more about how big that business is today, your growth expectations going forward? And then on the margin side, because it's been affecting the mix in the business, where are you from a margin standpoint in mulch. I know there's been a focus there, and what's the ultimate opportunity for margins in that business? James Hagedorn - Chairman & Chief Executive Officer: Let me just kind of throw out sort of my points of view on it. First I think mulch is a good and bad story at the Scotts company. It clearly is an important category and I think it's just a – if you just look at it from a consumer point of view, you do like four bags for $10 or whatever, they are like pushing out on a Black Friday event, five bags for $10. It is a ton of value because we kind of invented this category of long lasting color on wood mulch, but you put it down, it makes your garden look super fine, it makes your home look really fine. So you come home with like 20 bags of that stuff, people are going to come up and say, wow, and you're going to do all that for like $20. And that's kind of the bad part. It's…

We'll go next to William Reuter of Bank of America Merrill Lynch. William Michael Reuter - Bank of America/Merrill Lynch: Hey, guys. Just with regard to your comments about acquisitions, it sounds like the highest probability is that they would be in adjacent categories. I'm curious whether you guys would ever consider purchasing companies that would be kind of in non-adjacent categories, but might be selling into some of the same customers that you guys currently do? James Hagedorn - Chairman & Chief Executive Officer: Like what? William Michael Reuter - Bank of America/Merrill Lynch: I don't know, that's why I'm asking you. James Hagedorn - Chairman & Chief Executive Officer: Look, I think we're pretty clear on kind of what we think is interesting. So, I think generally we are selling into people who sell into the same channels. The only difference would be – the hydro channel I think is generally a distinct channel. So, if we have interest in the hydro channel, a lot of that business is not sold through our conventional retailers today. William Michael Reuter - Bank of America/Merrill Lynch: Okay. I think this is more in the context of with 2.6 times of leverage and a bank covenant that would allow you to go up to 4.5 times, just wondering kind of whether there are things in which you guys have, when you have a whiteboard up there, imagined that this would be something interesting that maybe people haven't thought of as a traditional kind of opportunity for expansion for us that maybe we should be thinking about? Michael C. Lukemire - Chief Operating Officer & Executive Vice President: I've done that before, and lost couple of hundred million in that sort of process, to be honest. We had a failed acquisition in…

And with no further question in queue, I'd like to turn the conference over to Jim King for any additional or closing remarks. Jim King - Chief Communications Officer & Senior VP, Investor Relations and Corporate Affairs: All right. Thanks, Cecilia. Couple of housekeeping items. On November 18, Randy Coleman and I are going to be presenting at Morgan Stanley Conference in New York. That will be a webcast event at 8 a.m. that day. So, we'll have more information out on that next week. Again, if you're interested in attending the Analyst Day event two ways, go to our website investor.scotts.com or call us directly at 937-578-5968. And if there are any follow-up questions from today's call that we didn't get to, feel free to call me directly at numbers 937-578-5622. Other than that... James Hagedorn - Chairman & Chief Executive Officer: Well, I just want no just throw one more thing in there. It's just that, we just last week finished that new credit facility. We sold some bonds a couple of weeks before that. So I really want to thank our finance partners out there on the Street that have really done a great job, getting those bonds sold and producing a credit facility that I think really will work with us going forward as we talk to you guys next month. So thank you guys for all your help. Jim King - Chief Communications Officer & Senior VP, Investor Relations and Corporate Affairs: All right. Other than that, we will see you all next month in New York on December 10. Thanks. Have a great day.