Welcome to the Third Quarter 2015 Stanley Black & Decker Earnings Conference Call. My name is Stephanie and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to the Vice President of Investor & Government Relations, Greg Waybright. Mr. Waybright, you may begin. Greg Waybright - Vice President-Investor & Government Relations: Thank you, Stephanie. Good morning, everyone, and thanks for joining us for Stanley Black & Decker's third quarter 2015 conference call. On the call, in addition to myself is John Lundgren, Chairman and CEO; Jim Loree, President and COO; and Don Allan, Senior Vice President and CFO. Our earnings release which was issued earlier this morning, and a supplemental presentation, which we will refer to during the call, are available on the IR section of our website, as well as on our iPhone and iPad applications. A replay of this morning's call will also be available beginning at 2:00 PM today. The replay number and the access code are in our press release. This morning, John, Jim, and Don will review our third quarter 2015 results and various other matters followed by a Q&A session. Consistent with prior calls, we are going to be sticking with just one question per caller. And as we normally do, we will be making some forward-looking statements during the call. Such statements are based on assumptions of future events that may not prove to be accurate, and as such, they involve risk and uncertainty. It's, therefore, possible that actual results may materially differ from any forward-looking statements that we might make today. We direct you to the cautionary statements in the 8-K…

Thank you. We will now begin the question-and-answer-session. Our first question comes from Rich Kwas with Wells Fargo Securities. Your line is open.

Hi. Good morning, everyone. I'm going to squeeze in two questions here. But Jim or John, could you comment on price as you start to look at 2016 with the deflationary environment? A lot of companies are starting to struggle in terms of pushing through price, like to get your views on that. And then in terms of the near term on Industrial, how do you feel about the landscape right now? There are some pressures in the environment. Have you baked in some cushion around Industrial and the landscape peers as we move out the next few months? Thanks. John F. Lundgren - Chairman & Chief Executive Officer: Don is going to give you the view on price going forward, to the extent we're going to talk about it for 2016. And then Jim, I think, can give you a little deeper dive on Industrial and our thoughts. James M. Loree - President & Chief Operating Officer: Yeah, Rich. On pricing, I think it's a couple of dynamics. One is, certainly, we've been able to achieve positive pricing benefits because of some of the negative foreign exchange impact we've had in emerging markets in particular, and even a little bit in our European regions as well. So, as we import our products into those particular regions and we are impacted negatively by foreign currency, we obviously try to recoup as much of that as possible through pricing actions in the local market. With us having a continued headwind going into 2016, we will continue to be prudent about our approach in that area and go after specific price actions where it makes sense, given the different dynamics in those markets. So we do think there will be ability to gain some price in emerging markets as a result of…

Our next question comes from Michael Rehaut with JPMorgan. Your line is open.

Thanks. Good morning, everyone. The question I had was just regarding getting a little bit more granularity with the adjustments to the full-year guidance. If you kind of take the midpoint of the prior FX headwind to where you are expecting today, it doesn't seem like it's that much more, maybe $10 million, $15 million, or $10 million from the midpoint. So just want to understand versus three months ago, what were the biggest drivers of those? And then conversely in terms of the upside stronger business performance combined with better commodity deflation, if you think of like $10 million incremental headwind to get to the guidance range, we're talking about maybe another $25 million of positive roughly speaking. So if that math is right, $25 million, $30 million of incremental positive, how does that break down between the stronger business performance and the commodity deflation? And more specifically, where within the business are you seeing that better performance and what's the bigger weight? John F. Lundgren - Chairman & Chief Executive Officer: Rank has its privileges and I'm going to let Don try to tackle that one. There are a lot of moving pieces, Mike. But I think Don can kind of tie a little bit of a bow on it for you. Donald Allan - Chief Financial Officer & Senior Vice President: Sure. Your math is actually pretty close, so as you think about us raising our midpoint by about $0.07 or $0.08 of EPS, yeah, we probably have about $10 million of new FX pressure. As I said, we're at the higher end of that range; that's about $0.05 of EPS. And then you have about $25 million or so of positive impact from commodity deflation and other indirect cost controls. And the net of those two items gets you basically to $0.07 and $0.08.

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

Thanks. Good morning. I wanted to focus a little bit on the Tools & Storage segment. Margins were very strong. I understand the good volume leverage here, but looks like we're coming in at the high end of that range that you've talked about in the past as being sort of the cyclical high margins that we could expect from this business. Any change in your view here given that at this point you still have 150 points of forex pressure in those margins? Should we envision margins continuing to trend up into next year as long as volumes go up? And the other question, a follow-up on this, is I understand you have very strong share gains across regions. I just wanted to get a better sense of what do you see in terms of the underlying demand trends in North America in particular. James M. Loree - President & Chief Operating Officer: Sure. This is Jim. When we think about margins and margins through the cycle, we don't necessarily let the cycle drive the margins, per se. We tend to be much more proactive about it. So at the down part of the cycle, we're taking out cost at a very healthy pace. And as we enjoy the ride up the cycle, we don't back off in terms of some of the things that we do to maintain the upward pressure, everything we can do to maintain the upward pressure on margins. So I think the potential for what you're calling the peak cycle margin rate is quite high. And I think evidence of that is if this whole FX headwind hadn't occurred, we would be at record-margins for the company and the Tool business. So the things that we do are things like continuous productivity, 3% to…

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

Thank you. Good morning, everyone. John, you briefly just mentioned China and I just have a question overall thinking about kind of the dynamics in the EMs and Tools & Storage specifically. A very strong performance as you characterized with strong Latin America offsetting weaker Russia and China. It's being difficult for Latin America to continue to carry that ball with what's going on in Brazil, et cetera. Just wondering if you could kind of give us a little bit more granular lay of the land on how you expect... John F. Lundgren - Chairman & Chief Executive Officer: Yes...

...those things to play out. John F. Lundgren - Chairman & Chief Executive Officer: Sure. Sure, Jeff. Very fair. To give you some numbers because it – boy, they're all over the place, but Latin America, what we call our Latin American group organically grew 13%. Brazil, which is the largest by far market, we grew 4% organically. But obviously, we're suffering some huge currency headwinds that Don talked about. But we have smaller countries, Venezuela, as I say where we've done zero business essentially for about the last six quarters. We had good performance in Mexico, good performance in Colombia; Brazil as I say, up low-single digits, which gave us low-double digit growth in Latin America. Country-specific, they represent a small percentage of our volume, but Russia was down 30%, China was down 28%. We think that's not inconsistent with the markets in general. The silver lining in the clouds for us particularly in China is the expansion of our mid-price-point product offerings, locally produced by a subsidiary that we control. We think that in and of itself is going to help us a lot, but we we're working off some high comps. The bad news is we're down 25% to 30% in both Russia and China. The good news is those are very small markets and a small base. So $2 million, $3 million, $4 million of improvement will bring us back to where we were. What we're doing about it? I think the simplest way to describe it, we aren't withdrawing, we aren't cutting back, we've stopped adding feet on the street and variable cost resources at the pace we were adding them, but we haven't cut anything, and we're reallocating resources within our emerging market group, Asia, and to a lesser extent Latin America, because we just think those are still huge economies, 45% or 46% of our business is still outside the U.S., that includes Europe, of course, and we're not going to withdraw our support for those markets. So, a long answer to a simple question, but I think the huge volatility in certain countries gives you a flavor for how we're approaching it. It's much more a question we're reallocating resources as opposed to cutting them, because we're in these bit markets for the long haul.

Our next question comes from Michael Dahl with Credit Suisse. Your line is open. Michael G. Dahl - Credit Suisse Securities (USA) LLC (Broker): Hi. Thanks for taking my question. I wanted to focus on the Security segment. You've got kind of diverging trends here. On one hand the previous problem area in terms of Europe is improving and seeing accelerating organic growth, and now it seems like you're seeing some deceleration in North America and emerging markets, I guess, on the electronics side in particular. So just curious, as you look out to – obviously, you've outlined a path to what you need to see from this overall business over the next year. How are these trends playing into that? Are you more or less positive on the positioning of the business as you see it today versus how you were thinking about it three months or six months ago? John F. Lundgren - Chairman & Chief Executive Officer: Sure. Fair question. Don will give you a little detail, but I guess from top of the house, I can say we feel as good or better about these businesses as we have in the past. You talked about Europe; they're delivering on their commitments, which pleases us and pleases the folks there. And we think we have the right people in the right chairs. And we think we understand what the issues are within North American Security. Don has been spending a lot of time with that team. So let me have him give you a little more granularity. Donald Allan - Chief Financial Officer & Senior Vice President: Sure. Thanks, John. So, what John said is exactly correct. And, yeah, we're really pleased, and Jim went through it in a lot of detail in his presentation around the…

Our next question comes from Tim Wojs with Baird. Your line is open. Tim R. Wojs - Robert W. Baird & Co., Inc. (Broker): Hey, guys. Good job again in a tough environment. John F. Lundgren - Chairman & Chief Executive Officer: Thank you. Tim R. Wojs - Robert W. Baird & Co., Inc. (Broker): I just had a bigger picture question on Tools. What inning do you think we're in around some of the adoption of some of the new technology development that's been going on, whether it's brushless or just improved battery performance? And I guess would you characterize this as maybe a technology step function that's similar to what lithium-ion was a few years ago or several years ago? John F. Lundgren - Chairman & Chief Executive Officer: I would say, Tim, it's a really good question, and I would say no. Lithium-ion, if you think about it relative to NiCad, it was a better mousetrap, more power, longer run times, better for the environment, and the only issue was cost. And like any technological breakthrough, when you can get the cost in line, it's going to displace its predecessor. What we're seeing now and I don't think is a step function, I think to answer your question, which is a very fair one, and it's only one person's opinion that you're getting. That being said, the leverage for us is going to come from what I think we do best. We weren't the inventors of brushless. We obviously didn't invent, and we were a slow follower on the application of lithium-ion and things of that nature. Where I believe we've excelled, and I give tremendous credit to our global Tools & Storage team, both in the product development perspective, commercial execution, et cetera, is just the application of all of those technologies. The application of brushless, lithium-ion, the way we've been able to get more power, more run time combined with the DEWALT brand, good programs to support it, those are all, I would argue, incremental as opposed to step functions. And that's where our success has come the last two years or three years. Is there more on the horizon? I think, yeah. I think we can see we're cautiously optimistic about what our team has in the pipeline in terms of further advancements of those existing technologies, but I don't see anything in the application of those technologies, but I don't see another lithium-ion, if you will, breakthrough per se in the foreseeable future. But that doesn't mean we're not going to push those hard and get more than our fair share of the market growth by applying the technologies.

Our next question comes from Mike Wood with Macquarie. Your line is open. Mike Wood - Macquarie Capital (USA), Inc.: Hi. Thanks for taking my question. Can you give us some color in terms of the North America vertical products in Security, just what the life cycle on the margins look like relative to your more typical products there? If you could just differentiate maybe on the installs, would we expect lighter, is that what we're seeing now and does that become more of a tailwind as you get more to recurring with the vertical products? James M. Loree - President & Chief Operating Officer: Yeah. I'll take that one, Mike. You know the verticals that we're really concentrating on right now are retail and healthcare. And, as you know, the idea of a vertical selling solutions is to really create a solution that offers much more than just security to our customers. Security is certainly a core component of the solution, but are there other things that we can do, such as in retail where we provide certain information and database on traffic flow in and out of the stores, correlating that with POS, et cetera. In healthcare, we're looking at helping productivity within the healthcare environment, the nurses and doctors, and offering solutions in that area to help the customers reduce cost or save money. And so, the model is really to bring forth those types of solutions that give more value, and does that translate into more beyond the installation into certain types of recurring revenue streams. And, that's really the intention of it. At this stage, it's still early development around that. But as we get deeper into these verticals and particularly the two that I just mentioned, I do believe that certain recurring revenue streams will evolve from those types of solutions. So, I think that's something you continue to watch and monitor. It's an area of focus as part of our strategy.

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

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

Just a quick housekeeping first. I wanted to clarify those growth rates John was giving earlier on the emerging markets, if that was for just Tools or the total company. But then, my question was really on SG&A, 21.5% of sales, very good performance. It actually looks like a record, at least, in recent history. Just wanted to unpack a little more what's driving that, how much is structural and how should we be modeling SG&A going forward? Thank you. John F. Lundgren - Chairman & Chief Executive Officer: I'll clarify the first one. The numbers that I gave, the growth rates or lack thereof in some of the emerging markets, were total company. That being said, with the exception of certain Asian markets, that is overwhelmingly Global Tools & Storage. As Don mentioned, Singapore, China, some, we got meaningful Security business, 20% of our total in those markets. But they were total company numbers which were overwhelmingly Tools & Storage. But Don, you want to talk about... Donald Allan - Chief Financial Officer & Senior Vice President: SG&A. Sure. Yeah. So the performance, very pleased with the SG&A as a percentage of revenue in Q3 at 21.5% or in that category. But for the year, we do expect us to be somewhere around 22.3%, 22.4% for the total year. We do have some additional costs that do creep into the systems for lack of better word, in the fourth quarter related to some of the promotional activities we do and in-store activities around the holidays that will likely make that number creep up a little bit in the fourth quarter versus the third quarter. But we are definitely seeing another step-change in this particular area in 2015. So, in 2014, we were close to 23% as a percentage of…

Our next question comes from Liam Burke with Wunderlich. Your line is open.

Yes. Thank you. Good morning. John F. Lundgren - Chairman & Chief Executive Officer: Good morning.

The Black & Decker brand has been fairly successful in your mid-price point overseas. But how is the Black & Decker brand being positioned domestically? John F. Lundgren - Chairman & Chief Executive Officer: Well, the Black & Decker brand domestically – I've got to bifurcate, Liam, but just from the perspective of Tools, it's overwhelmingly domestically a DIY brand, and it's performing really, really well. You'll find it in the home centers, but you'll also find it in big boxes like Target, like Walmart and places like that, where it's very, very well perceived. A large outlook for the Black & Decker brand, which I'm sure you're aware of, but I need to be careful to distinguish, it's in the home products, both in the U.S. and in Europe. The overwhelming majority of those products are licensed, as I'm sure you know, and we obviously receive a royalty for the use of that brand on products designed for use in the home and primarily in the kitchen secondarily. So, it's important to bifurcate. But in both cases, it's DIY non-professional, but premium quality for folks who are doing it not for a living, but folks who are serious about the product they purchase.

Our next question comes from David MacGregor with Longbow Research. Your line is open.

Yes. Good morning, everyone. Congratulations on a great quarter. John F. Lundgren - Chairman & Chief Executive Officer: Thank you.

I guess the question on engineered fasteners and then just the automotive business in particular. And I realize you're not talking about 2016 yet, but automotive is a business where maybe there is a little more forward visibility because of the platforms. And I'm just wondering about your content per vehicle and how you expect that to grow in 2016, if you can talk about that? John F. Lundgren - Chairman & Chief Executive Officer: Well, our strategy is always to grow our content for vehicle. And as you know, we're selling solutions. We're selling the equipment or the systems as well as the consumables that go with it. I am not going to get ahead of myself or ourselves or the business particularly as it relates to anything proprietary with our customers. But our strategy is always to increase the content per vehicle, and that in and of itself, is a great source of growth. And it's why we've been able to grow in some cases 2 times and 3 times the rate of light vehicle production. And what's playing to our strength there, and I know you understand our business very well, what's playing to our strength there is the lighter that the vehicles become, particularly aluminum, it plays to our strength when you can't well protect for obvious technical reasons, that advantages systems such as ours, so we're looking to grow that content, and that absolutely is the source of growth, all things being equal, above and beyond the growth of light vehicle production.

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

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect. And, everyone, have a great day.