Executives: Chris Gough - Edgewell Personal Care Co. David P. Hatfield - Edgewell Personal Care Co. Sandra J. Sheldon - Edgewell Personal Care Co.

Analysts: Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker) Nik Modi - RBC Capital Markets LLC Jason English - Goldman Sachs & Co. Ali Dibadj - Sanford C. Bernstein & Co.

LLC Olivia Tong - Bank of America Merrill Lynch Kevin Grundy - Jefferies LLC William Schmitz - Deutsche Bank Securities, Inc. Jonathan Feeney - Consumer Edge Research LLC Iain E. Simpson - Société Générale SA (Broker) Andre Shepley - UBS Securities

LLC
Operator: Good morning and welcome to the Edgewell Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions.

Please note, this event is being recorded. I would now like to turn the conference over to Chris Gough, Vice President, Investor Relations. Please go ahead. Chris Gough - Edgewell Personal Care Co.: Thank you, Kate, and good morning, everyone. And thank you for joining us for Edgewell's fourth quarter fiscal 2016 earnings conference call.

As a reminder, for comparative purposes, fiscal 2015 full-year results include both the Personal Care and the Household Products businesses with the results of the Household Products business presented in discontinued operations. Historical results on a continuing operations basis in fiscal 2015 include certain costs associated with supporting the operations of the Household business, as these costs were not reported in discontinued operations. As a result, full year – fiscal year EPS is not comparable to the prior year, as the prior year's results include SG&A expense, interest expense, spin costs, restructuring costs, and tax associated with supporting the Household business. Additionally, EPS was not comparable in either the first, second, or third quarters of fiscal 2016. To partially address this, we have provided normalized fiscal 2015 EBITDA reflecting pro forma adjustments to SG&A.

You will find these normalizations in the non-GAAP reconciliations at the back of the press release issued earlier today and on our website. With me this

morning are: David Hatfield, our President, Chief Executive Officer and Chairman of the board; and Sandy Sheldon, our Chief Financial Officer. David will kick off the call, then hand over to Sandy for the earnings and outlook discussion, followed by Q&A. This call is being recorded and will be available for replay via our website. During the call we may make statements about our expectations for future plans and performance.

This might include future sales, earnings, advertising and promotional spending, product launches, the impact of go-to market changes on sales, savings and costs related to restructuring, changes to our working capital metrics, currency fluctuations, commodity costs, category value, future plans for return of capital to shareholders, and more. Any such statements are forward-looking statements, which reflect our current views with respect to future events. These statements are based on assumptions and are subject to various risks and uncertainties, included, those described under the caption Risk Factors in our Annual Report on Form 10-K for the year ended September 30, 2015, as amended and supplemented in our quarterly reports on Form 10-Q for the quarters ended December 31, 2015, March 31, 2016, and June 30, 2016. These risks may cause our actual results to be materially different from those expressed or implied by our forward-looking statements. We do not assume any obligation to update or revise any of these forward-looking statements to reflect new events or circumstances.

During this call we will refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures are shown in our press release issued earlier today, which is available in the Investor Relations section of our website, www.edgewell.com. Management believes these non-GAAP measures provide investors valuable information on the underlying trends of the business. With that I would like to turn the call over to David.

David P. Hatfield - Edgewell Personal Care Co.: Thanks, Chris, and good morning, everyone. Before Sandy takes you through the results, I'll briefly comment on a few highlights of Edgewell's performance for the full fiscal year and a comment on our outlook for fiscal 2017. We're pleased with our fiscal 2016 results, which were in line with the plans that we set for ourselves at the beginning of the year. And that we're particularly pleased with the top-line performance for the year.

Full-year organic net sales grew 1.4% and underlying sales growth, excluding the impact of our go-to-market changes, exceeded our expectations at 2.8%. Let me spend a few minutes on the drivers of that growth. As we indicated at our Investor Day back in June of 2015, the 2016 fiscal year -- it was going to be a transition year and a year where we could focus on – or we would focus on four main business priorities to accelerate top-line growth. Our first priority, to complete go-to-market and functional realignment initiatives around the globe, was completed in the third quarter. The impact in the year was within expectations.

And the new structure and distributor relationships are working well. Our second priority was to execute against our segment plans and to grow underlying sales in Wet Shave and Sun. For the year Wet Shave organic net sales were up 1.8% and Sun and Skin organic net sales were up 4.6%. That's solid progress in these two key segments. Within Wet Shave we're benefiting from our next-generation Hydro product improvement and strong private label sales, including the recently introduced fits Mach3 551 private-label product launched in a partnership with our U.S.

customers. We've also grown Women's Systems and Shave Preps this fiscal year behind innovation and category management. Third, we had to solidify and return to growth in North America. For the year organic net sales in North America grew nearly 2%, driven by growth in Wet Shave and Sun and Skin. And our fourth priority was to continue our momentum internationally.

For the year international organic net sales were up 1.1%, and that included nearly four points of impact from go-to-market changes. So another solid year from our international team. Now turning to bottom-line results. We achieved our outlook for adjusted earnings per share, while managing through very complex go-to-market and other structural changes that I discussed. Importantly, we were able to invest back into the business with A&P and R&D spends that finished the year within our target ranges.

And we invested in our strategic growth projects, including e-commerce, IT infrastructure, and emerging markets, all of which fell into SG&A. We also delivered on other elements of our strategic value drivers. For example, we recently acquired Bulldog, a great new men's skincare company out of the UK. We're very excited about the prospects for that business. And we repurchased over 2.5 million shares for the fiscal year.

Now although we achieved many of our goals for the year, we have more work to do in other areas. Our Fem Care business remains a point of focus, as we work to maintain sales and complete the consolidation of manufacturing to our Dover plant. Our overall SG&A spending remains higher than target. And although much of that reflects the increased strategic investment, we're working on a number of key initiatives to help us address this issue. And the competitive environment remains very intense, and we need to continue to act with speed and agility.

So as we look towards 2017, it's the same five value drivers and key priorities that will generate top- and bottom-line growth. Our first value driver to accelerate top-line growth will rely on our ongoing momentum in the Wet Shave business, driven by further growth in international, growth through innovation across the full portfolio, and aggressively adding to our capabilities in the growth channels such as e-commerce and emerging markets. In Sun and Skin Care we'll drive growth through category growth and continued international expansion, including the new Bulldog acquisition. And in Fem Care we'll maintain top-line sales through new innovation and investment in the growth brands, while focusing on cost savings to enhance profitability as we look to fiscal 2018. Of course across all segments we need to monitor macroeconomic conditions and keep a close watch on the competitive environment.

But based on what we see today, our outlook is for low-single-digit sales growth for fiscal 2017. Turning to our second value driver, systematic cost reduction. We'll leverage productivity initiatives, including ongoing restructuring savings in fiscal 2017 and beyond. Our ZBS initiative is already yielding results with more to come. And our trade management optimization initiative is producing results in North America.

These projects fit well into our culture of systematic cost reduction and will increase our operational and financial flexibility in 2017 to further enable our growth objectives and to drive margin expansion. And we expect to generate at least 50 basis points of adjusted operating margin expansion for the full fiscal year. Our third value driver, free cash flow generation, comes from a combination of top-line growth, operating margin expansion, and working capital improvements. And like we did this past year, we expect to achieve our free cash flow target of over 100% of net earnings for fiscal 2017. And we'll continue to take a disciplined and active approach to M&A, which is our fourth value driver.

So overall, we're encouraged as we enter fiscal 2017. Our outlook is for growth on both the top and the bottom line, growth that is in line with our longer-term algorithm. Thanks. And with that I'll hand it over to Sandy. Sandra J.

Sheldon - Edgewell Personal Care Co.: Thank you, David, and good morning, everyone. Let me take you through the specifics for the quarter and highlights for the year. Net sales in the quarter were $611 million, an increase of $51 million or 9%, driven by growth in all four segments in all key geographic regions. North American net sales were up 8.4% with growth across all segments. International net sales increased 14.2%, or 11% on an organic basis, driven by growth in Wet Shave and Sun and Skin Care.

Gross margin was 51% of net sales, up 270 basis points over the prior year. The increase was primarily due to lower promotional spend and lower material costs, which were partially offset by higher startup costs related to the Sun Care production consolidation into our U.S. plant. A&P expense was $82.6 million in the quarter or about 13.5% of net sales, which represents a more normal level compared to relatively higher spend of 17% in Q4 2015. SG&A was 17.7% of net sales, including $3.6 million of intangible amortization.

Excluding $30 million in prior-year charges related to the spin-off of the company's Household Products business, SG&A increased 100 basis points over the prior-year quarter. This increase was driven by higher spending in strategic growth projects, IT projects, and higher corporate costs, as well as increased compensation expense including incentive compensation. Other expense net was an expense of $2 million during the quarter compared to income of $3.5 million in the prior-year quarter. This change was largely driven by foreign currency hedging contract losses, particularly related to the Japanese yen and revaluation losses on non-functional currency balance-sheet exposures. Net earnings in the quarter were $52.2 million, compared to a net loss of $219 million in the fourth quarter of fiscal 2015.

The increase in earnings was primarily related to the intangibles impairment charge and higher costs related to the spin-off in the prior-year quarter, and a higher segment profit and operating margin expansion this quarter. Fourth quarter adjusted EBITDA was $119.4 million, an increase of $36.4 million versus fourth quarter of 2015. GAAP diluted EPS was $0.88 in the quarter as compared to a loss of $3.57 in the prior year. Adjusted EPS for the quarter was $1.06, compared to $0.64 in the prior year. So now to move on to fourth quarter segment results.

Wet Shave organic net sales increased 7.4% with growth across Systems and Shave Preps. Planned lower promotional spend in North America from lower coupons and trade spend was the largest driver of the sales increase, followed by Hydro sales growth in Asia, Women's Systems globally, and Hydro Silk in international. A quick comment on the level of coupons and trade spend in the current quarter. We knew coming into the year that this would be a driver in the quarter, given the high level of spending a year ago. The level of promotional spend this quarter was actually slightly higher than our historical trends but significantly lower than last year.

Organic Wet Shave segment profit improved by $31 million due to lower promotional levels, as well as lower product cost and modestly lower A&P spend. As measured by Nielsen, the U.S. manual shave category was down over 5% in the latest 12-week data with declines in Men's Systems and Disposables, Men's manual shave was down 6%. However, when factoring in non-measured channels, we believe the U.S. Men's category was up 2% and the overall category was down about 2% due to Men's and Disposable softness, ex-AOC.

From a share perspective globally, we're competing well, gaining share in several non-U.S. markets, as well as gaining share in the U.S. Versus a year ago, our U.S. share was up 50 basis points in manual shave, driven by market share gains in Men's. Note that our U.S.

corporate branded share results continue to be impacted by a transition of our opening price point value branded product offering in a major retailer to a private label product line. Sun and Skin Care organic net sales increased 18% in the quarter, with growth in both Banana Boat and Hawaiian Tropic and across North America and International. The sales growth was largely volume-based and in line with the U.S. category growth, which was stronger than anticipated due to favorable weather trends, as well as category share and distribution gains across International. Organic segment profit improved approximately $10 million in the quarter, driven by higher sales volumes, lower product costs, and lower A&P spend.

Within the U.S. category consumption was up about 9% in the quarter and up 4% in the latest 52-week data, due to favorable weather over the peak summer season. Market shares across both brands were down slightly for the 12-week period, but both held share for the 52-week period. Feminine Care organic net sales increased $11 million or 11.4% with lower promotional spending compared to very high spend levels last Q4, partially offset by lower volumes. Segment profit declined approximately $1 million despite the increase in net sales, due primarily to higher production costs and startup costs associated with the consolidation of manufacturing into our U.S.

plant. Now a few highlights on the full-year results. Net sales decreased 2.4%, but increased 1.4% on an organic basis, which included 140-basis-point impact from International go-to-market changes that were completed in the third quarter. North American net sales increased 1.7% for the full year, and International organics net sales increased 1.1% or 5% on an underlying basis. Gross margin was 49.1% of net sales, roughly in line with the prior year.

Full-year A&P expense was 14.3% of net sales, down versus the prior-year spending at 15.2%, but in line with the company's target range. SG&A expense was $413 million, including $14.4 million of intangible amortization. Excluding the impact of $12 million in spin-related costs, SG&A was $401 million or 17% of net sales. Other expense net was an expense of $3 million, compared to income of $12 million in the prior year, largely reflecting the same drivers as in the quarter. On a segment level, Wet Shave organic net sales was up nearly 2 points for the year, driven by lower promotional spending, strong global Hydro sales, and strong private-label sales in North America.

This growth included an estimated $29 million of go-to-market impacts for the year. Sun and Skin Care organic net sales were up 5%, mirroring the quarter, with growth in both product lines and across all regions. Finally, organic net sales in Feminine Care were down 1.8%, largely driven by declines in pads, partially offset by increased sales in tampons and liners. For the full year, organic segment profit was up $12.3 million, driven by strong profit performance in Sun and Skin Care and Infant, both due to improved product costs, lower A&P, and improved volumes in Sun and Skin. These gains were partially offset by Wet Shave organic segment profit, which declined 2.6% due to higher overhead costs and product costs, partially offset by lower A&P and promotional activity.

Feminine Care organic segment profit declined approximately 16%, due to unfavorable product costs related to startup expenses and unfavorable transactional FX, partially offset by lower A&P. Overall, at the total company level for fiscal 2016 adjusted EBITDA was $440 million versus fiscal 2015 normalized adjusted EBITDA of $462 million. Although segment profit was up year over year, this growth was offset by $7 million of unfavorable foreign currency movements, $11.6 million from the impact of Venezuela and industrial, and another $15 million in other expense net described previously. GAAP diluted EPS was $2.99, as compared to loss of $4.44 in fiscal 2015. And adjusted EPS for the year was $3.57, compared to $2.80 in the prior year.

Net cash from operating activities was $176 million and free cash flow was $107 million for the full year. This includes a discretionary contribution of $100 million we made to one of our international pension plans, which negatively impacted cash flow for the year. Adjusted working capital as a percent of net sales improved to 16.1% at the end of the fourth quarter versus 17.5% at September 30, 2015. The 140-basis-point improvement was driven by lower days payable outstanding and improved days in inventory. Adjusted working capital continues to reflect a higher level of inventory in Feminine Care, which is expected to return to normal levels, as we complete the consolidation of manufacturing during fiscal year 2017.

In terms of capital allocation, we repurchased 2.5 million shares for approximately $197 million. Subsequent to year end, we paid down international debt by $277 million and acquired Bulldog Skincare. Both of these transactions were completed with international cash. In summary, we ended the year with solid fourth-quarter results on both top and bottom line. We returned significant capital to shareholders and managed through complex transition issues in line with the goals we set for the year.

Now I'd like to turn to our outlook for fiscal 2017. For fiscal 2017 we're aligning our full-year outlook metrics with the company's long-term financial algorithm metrics, which are net sales growth, operating margin expansion, and earnings per share growth. We estimate that net sales will increase by low single digits with no expected impact from currency based on recent exchange rates, although as everyone knows, currency rates remain very volatile. The top-line outlook includes an estimated 40-basis-point benefit from the Bulldog acquisition, which represents 11 months of activity. The GAAP EPS outlook is $3.60 to $3.80; and adjusted EPS is estimated to be in the range of $3.80 to $4.

The impact from the acquisition of Bulldog is expected to be neutral to EPS in 2017. The effective tax rate for the fiscal year is estimated to be in the range of 27% to 28%. Adjusted operating income margin is anticipated to expand by at least 50 basis points. Based on our current view, we anticipate this margin expansion will be driven by gross margin improvement and lower SG&A as a percent of net sales, slightly offset by higher A&P spend as a percent of net sales. The full-year estimate for restructuring-related costs is $15 million to $20 million for fiscal 2017.

Incremental restructuring savings are expected to be approximately $20 million to $25 million in 2017, with an additional $25 million in fiscal 2018. In terms of overall quarterly phasing for fiscal 2017, we anticipate that sales and earnings growth will not be uniform by quarter, largely driven by timing of product launches and A&P spend. In particular, in the first quarter net sales are expected to be relatively flat, and segment profit is anticipated to be moderately lower than in the prior-year quarter. Let me wrap up by addressing Zero Based Spend initiative announced last quarter. The project is progressing well.

And on a very preliminary review, we have estimated we can deliver $35 million to $45 million in net savings over the next two years. Savings will begin in the back half of fiscal 2017. And our current outlook incorporates preliminary net savings estimate for $10 million to $15 million to fiscal 2017. As David mentioned in his up-front comments, SG&A as a percent of net sales will remain a high focus item for the company. We are committed to lowering SG&A as a percent of sales but are also investing in strategic areas to generate and accelerate top-line growth.

The ZBS initiative, along with our productivity initiatives, is designed to give us the flexibility to achieve both of those goals, providing ongoing financial and operational flexibility for reinvestment and reinforcing growth in our financial algorithm. Thank you. And with that, we will open it up for questions.

Operator: We will now begin the question-and-answer session. At this time we will pause momentarily to assemble our roster.

The first question comes from Wendy Nicholson of Citi Research. Please go ahead. Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker): Hi.

Good morning. Two questions if I can. First, as you look towards next year and your top-line forecast, just looking – I know you don't give specific items by segment, but would you still expect Skin Care to be the fastest-growth segment among the three? And then secondarily, can you just run through exactly what's driving the target for gross margin expansion? Is that a continuation of some favorable commodities? Is it more favorable product or mix shift? Or what's driving that? Thanks. David P. Hatfield - Edgewell Personal Care Co.: Okay.

Great. Thanks, Wendy. The first question for top line next year, we see Wet Shave continuing to grow kind of in the line with market, say 2% to 3%. And we see Sun and Skin also growing 3% to 4%, let's say. And then maybe if I can hand it over to Sandy.

Sandra J. Sheldon - Edgewell Personal Care Co.: Right. On the gross margin question, Wendy, yes, you're right. We are continuing to see favorable commodity prices. Obviously we have restructuring savings that roll through our gross margin.

And we'll also benefit from some improved price mix in the year. Wendy C. Nicholson - Citigroup Global Markets, Inc. (Broker): Got it. And back on that segment growth, in Wet Shave in particular, are you expecting a continuation of your market share gains? It sounds like your shift on the opening price point product has been really successful.

Are you expecting any other changes sort of strategically with any major customers, anything like that?
David P. Hatfield - Edgewell Personal Care Co.: It's really based on our continued focus on building baseline share through sales, baseline sales, through innovation behind – driving innovation, focusing on building equity, leveraging the full portfolio all the way from Hydro down through private label, and then continued International growth. Given the promotional headwinds, I think we're looking at more growing within – in the line to market growth. Wendy C. Nicholson - Citigroup Global Markets, Inc.

(Broker): Got it. Chris Gough - Edgewell Personal Care Co.: Thank you, Wendy. Thank you, Wendy. Operator, next question, please.

Operator: The next question is from Nik Modi of RBC Capital Markets.

Please go ahead. Nik Modi - RBC Capital

Markets LLC: Yeah. Thanks. Good morning, everyone. Just a quick clarification.

The Zero Based budgeting savings and the restructuring savings are separate, right? So you basically add them two together. I was just unclear on the wording in the press release on if those are two separate items, or if you were just including all the savings together. So that was the first clarification. And just talking about Zero Based budgeting in general, David, do you feel like the organization is ready, I mean, culturally, for something like this? Because that obviously is the key on really having a successful program, as we've seen from some of the other companies that have tried to do this. And then the second question is just on M&A.

I mean you've obviously done a bolt-on. Just curious what you think of the environment generally for other potential bolt-ons. Thanks. David P. Hatfield - Edgewell Personal Care Co.: So maybe the first question, Sandy, if you can handle, and I'll...

Sandra J. Sheldon - Edgewell Personal Care Co.: Yes. David P. Hatfield - Edgewell Personal Care Co.: Yeah. Sandra J.

Sheldon - Edgewell Personal Care Co.: Nik, those are two separate sets of savings. They're not – yes. They are two separate. So... David P.

Hatfield - Edgewell Personal Care Co.: Right. Nik Modi - RBC Capital

Markets LLC: Great. David P. Hatfield - Edgewell Personal Care Co.: That is a good question about ZBS and the culture. And I think – I actually think that we are.

I think part of the timing and the reason that it's taking some time to get it finalized and all is we've taken a lot of time to set up the category owners set up so that we can replicate it. That's it's going to be part of our processes and our DNA. If you go back in the time over the last 3 or 4 years, we've actually focused a lot on cost and on productivity, so it's not a new theme. And I think that the organization understands. I think ZBS is bringing tools and a process to make it a living process.

And I think the key is, as we communicated to the organization, is partly I would emphasize that we're doing this to generate flexibility, to put money back into the business, whether it's demand creation, whether it's better organizational capabilities, or it's I mean generating profit to return to shareholders. And I think that the balanced goal there I think will help make it a – or made it even more of a key lynchpin in our culture. Moving to your final question, we're actually pleased with our little bolt-on. I think it makes a lot of sense. The market out there is kind of tight.

There's not a lot of candidates. We're looking hard. There's a lot of – I think price tends to be pretty high yet still. But we're actively looking, and we're actively looking at similar kinds of bolt-ons. Chris Gough - Edgewell Personal Care Co.: Thank you, Nik.

Operator, next question, please.

Operator: The next question is from Jason English of Goldman Sachs. Please go ahead. Jason English - Goldman Sachs & Co.: Hey. Good morning, guys.

Thank you for the question and congratulations on a strong finish to the year. David P. Hatfield - Edgewell Personal Care Co.: Thank you, Jason. Jason English - Goldman Sachs & Co.: So it appears that – I Wet -- mean, pretty rhetoric -- Wet Shave, your private label initiatives, some great momentum. Question for clarification, are you the only ones with the capabilities to do a Mach3 compatible blade out there right now?
David P.

Hatfield - Edgewell Personal Care Co.: Oh, probably not. But I think we're unique in making a fits Mach3 that actually shaves at a – yeah, a performance level that really makes it a viable value versus Mach3. Jason English - Goldman Sachs & Co.: And in terms of distribution or penetration of accounts where you think this product could be sold, where do you stand right now?
David P. Hatfield - Edgewell Personal Care Co.: We're – within the U.S. it's been accepted everywhere that I know of.

I think from a – if you look just at Nielsen ACV, we're still only at 50% to 60% the last time that I looked. So there's more room to get facings. And that will be more of a process as we pass other reset times for customers. But we have broad-based acceptance. Jason English - Goldman Sachs & Co.: Last question, and I'll pass it on.

In terms of the cadence of how that built through the year, is that distribution still going to be largely incremental as you come into the year? And kind of when do you start to cycle it? And thank you for your time. David P. Hatfield - Edgewell Personal Care Co.: Yeah. A good question. I think it's sort of gradual.

We'll anniversary it by April, March/April, I think. Sandra J. Sheldon - Edgewell Personal Care Co.: I think it's closer to June. David P. Hatfield - Edgewell Personal Care Co.: Well, okay.

Yeah. You're right. We didn't really begin. So June. And as I mentioned, I think that it's building now.

So... Sandra J. Sheldon - Edgewell Personal Care Co.: Incremental in the first half or so. David P. Hatfield - Edgewell Personal Care Co.: Right.

Sandra J. Sheldon - Edgewell Personal Care Co.: Yeah. David P. Hatfield - Edgewell Personal Care Co.: So figure that we'll really anniversary it maybe middle to end of next year I guess. Sandra J.

Sheldon - Edgewell Personal Care Co.: Yeah. Chris Gough - Edgewell Personal Care Co.: Thank you, Jason. Jason English - Goldman Sachs & Co.: Helpful stuff. Thanks, guys. Chris Gough - Edgewell Personal Care Co.: Thanks, Jason.

Operator, next question, please.

Operator: Next question is from Bill Chappell of SunTrust. Please go ahead.

Unknown Speaker: Hi. This is actually Stephanie (33:24) on for Bill.

I was kind of – and maybe this goes off a little bit of Jason's question. Could you give the drivers of the kind of flat one quarter – first quarter growth outlook? Kind of what should we be looking for like from a year-over-year standpoint? Thanks. David P. Hatfield - Edgewell Personal Care Co.: So the question – okay. From Q1 I think there's a couple of things maybe.

We're actually comping a fairly solid year before. And we're answering it with a little bit less promotional weight than we were last year. And I could see a little bit of softness maybe on the disposable front. Chris Gough - Edgewell Personal Care Co.: Thank you, Stephanie (34:19). Operator, next question, please.

Operator: Next question is from Ali Dibadj of Bernstein. Please go ahead.. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys.

I have a couple I think straightforward ones. One is on the Mach3 look-alike. How do we think about the risk of patent infringement coming after you guys from a lawsuit perspective on Gillette? That's one. Two is on top line, even in the Nielsen numbers if we give you everything we can from private label, so assuming you're everything on private label and all the growth, it's still way far away from 9%. So how do we think about if any inventory loading that happened? Or is that – is it really just coming from a lot of the untracked channels? And then on – my last one is just, can you please help us understand what you mean by strategic initiatives?
David P.

Hatfield - Edgewell Personal Care Co.: Yeah. Okay. Fair enough. On the Mach3 front we're – you might have seen the suit. But we're not worried about it.

The Mach3 patents have expired. And so we're confident we have the freedom to operate. On the bridge for the quarter, Wet Shave was up 7%. International – and it was up like $26 million. International was up $16 million, almost 9%.

And it was up across all the areas and then segments. You move to U.S. which was up 7.8%. And you're right, when you take Nielsen, I'll fill you in that when you add private label, total EPC Nielsen consumption was down maybe 3% to 4%. Now bridging that gap, that was all – the major, major difference was actually price mix, where the comp versus previous year versus coupons plus some trade promotion spending.

That was the big difference. From a channel point of view, measured and unmeasured, we're generally in line. And I don't think the underlying shipments track pretty much the EPC consumption of down 3% to 4%. So I don't see much of a difference from a ship/consumption point of view. And then what we were kind of talking about with the initiatives, though – the world is changing, and through the year we've been agile enough to move some money to try to build and accelerate capabilities in the digital and in the e-commerce, both in the U.S.

but also China. And then some IT support and projects that also support working capital initiatives. And then ZBS also I would tuck into there. Chris Gough - Edgewell Personal Care Co.: Okay. Thank you, Ali.

Operator, next question, please.

Operator: The next question is from Olivia Tong of Bank of America Merrill Lynch. Please go ahead. Olivia Tong - Bank of America

Merrill Lynch: Great. Thank you.

Want to talk about the sustainability of growth. I know there is an easy comp in Q4. But your 2-year stack saw a pretty big acceleration. So why doesn't more of the benefit of the growth that you saw in Q4 flow through the next year? Because it doesn't look like you're really expecting much for fiscal 2017. And then in terms of the pullback relative to – on a year-over-year basis in promo and couponing, what does this say about the necessary levels of promotion and couponing to spur activity in your categories? Thanks.

David P. Hatfield - Edgewell Personal Care Co.: Yeah. Okay. All right. So the first part of that, this was – last year's quarter was an anomaly.

And so when you look at it – let's see. Let me – international grew – well, the easiest way to say this is half or a little more than half of the sales growth versus year ago was driven by lower couponing and promotion. So that gets us to 3% to 4% kind of normalized growth. And that was driven by some underlying growth in the U.S., but a lot of growth internationally where we were up in all geographies and all segments. So it was a strong, strong quarter.

Gained share in the U.S. and in most major markets. But I wouldn't draw just a, I mean, straight line from thereon. It was a very good quarter. And with competitive pressures and all, I wouldn't say that we could do that every quarter.

Your second question, I would just say that from a – do we have the right level going into next year? The quarter – this quarter was a pretty normal quarter when you compare trade spend to the year average. It was comparable. It was higher than that of 2 and 3 years ago. So it's a pretty sizeable level. And we're confident that it kicks us off in a good place.

Chris Gough - Edgewell Personal Care Co.: Thank you, Olivia. Operator, next question, please?

Operator: The next question is from Kevin Grundy of Jefferies. Please go ahead. Kevin Grundy -

Jefferies LLC: Hey. Thanks.

Good morning. First question, Sandy, on going back to the ZBS and the restructuring, can you help us better understand the split of those savings from COGS and SG&A, where some of the savings are going? It seems like some two-thirds is going to be reinvested. How much of that goes to advertising and marketing? How much of that goes to other areas? And then where can SG&A go over time, just beyond sort of what you've currently outlined? How should we be thinking about where core SG&A can go? And then I have a follow-up. Thanks. Sandra J.

Sheldon - Edgewell Personal Care Co.: Okay. So on the restructuring savings, really all of that goes into our gross margin and cost of goods sold line. From ZBS I would say we're – that project is looking at every line item and every cost bucket. And so while I can't give you specifics on line item at this point, because we are still only about halfway through the project, I'll say it is likely we will see savings across every line item. So probably not as much in cost of goods sold.

But I will see it in – certainly in SG&A, we'll see it in R&D, we'll see some in some of our gross-to-net sales line items. So we are really looking at every cost bucket we have. In terms of where it's going, I think David expressed it well at the beginning, which is we're really – this is a balanced plan and a balanced view of how we'll reinvest and look at the savings from ZBS. So some of them will be going up and reinvested back into gross-to-net, some of them will be reinvested back into A&P, and some of them will be reinvested back into SG&A to build capabilities. And overall, we continue to focus on our financial algorithm of 50 basis points improvement.

So some of them will go to shore that up as well. Kevin Grundy -

Jefferies LLC: Okay. That's helpful. And the follow-up for David, can you touch on shave club, both the risks and the opportunities there? And now we've seen Harry's move into Target, and they've had some success there. I think surprisingly so probably to both them and to the industry, I suspect.

And clearly, Unilever's placed a decent-sized bet on Dollar Shave [Club]. And I think collectively there'd probably would be a lack of surprise if we saw them move into retail at some point as well. And seemingly I understand you guys are participating, but I think there's still sort of questions from your side in terms of the economic viability of the model, despite the fact that it seems like enrollment continues to move up there. And consumers are sort of willing to pay for the convenience, despite the fact that the efficacy is a bit lower and frankly, they're even spending more annually on the blades. But you're updated thoughts there would be appreciated, given the growth that we're seeing there with enrollment.

Thank you. David P. Hatfield - Edgewell Personal Care Co.: Well, it's certainly a challenging area and a place where the world is changing. And certainly e-commerce, broadly speaking, around the world is a major issue, not only for us, but for every CPG company. And we're working hard to really ramp up digital capabilities in the broad sense and beyond just U.S., frankly.

Within the U.S. when you look at e-commerce, when you look at the omni-channel and the pure-play channels, we've been powering up capabilities, putting a lot more resources against that. And we've gained share within those segments like for each of the last three years. Now when you talk to – about the shave clubs, the jury is out. And we can speculate where they'll morph.

Over the last – sequentially over the last two to three quarters, they've been pretty flat, not versus year ago, but quarter to quarter to quarter. And with the challenge about profitability, I think you see them thinking about how to get their basket size up, become more than a shave club to really survive. So I think there's a question about how much aggregation needs to happen. So it's a question, and I'm not going to really, I mean, speculate how much Unilever uses DSC as a shave club or an entry way to men's grooming or personal care. But that's I think the big question mark.

In terms of Harry's coming into Target, they got good execution with an end cap. And so not surprisingly, generated pretty good early trial. They got a sizable part of share in Target. And they got about a 2% to 3% share of systems nationally. I think we got hit with fair share, maybe a little less than fair share, so it's not a huge impact yet.

We'll see how their trial converts to refills. And we'll see how their share moves once they go back to a more normal in-line set. And we'll see just how category profitability in that customer moves. As far as our plans there, they operate in a level where we have several options within our product mix, and we'll monitor them. So...

Chris Gough - Edgewell Personal Care Co.: Thank you, Kevin. Operator, next question, please.

Operator: The next question is from Bill Schmitz of Deutsche Bank. Please go ahead. William Schmitz - Deutsche Bank Securities, Inc.: Hi.

I have two questions. So the first is just on the gross-to-net sales number. Can you tell us what like the gross-to-net was last year and what it was this year? And then sort of like bridge us to the gross margin year-over-year change? Because it seems like a decent chunk of that gross margin expansion – and I get that it was just very elevated real (47:34) spending in the year ago. But it seems like a lot of that gross margin expansion was driven by that. And then just sort of operationally, I think it'd be really helpful for you guys to give us a split between volume and price mix.

So would it be okay if you guys to give us that number this quarter, what volume growth was versus price mix? And then I have a follow-up, please. Sandra J. Sheldon - Edgewell Personal Care Co.: So I'll jump in on a couple of the questions. But, yeah, Bill, you're right. The gross margin expansion for the quarter was largely driven by the lower promotional spend in the gross-to-net change.

The volume – most of our sales increase this year – or this quarter was the price mix. We did have some volume growth in Sun and Skin. And I think – but I think that's really predominantly how I would talk about it, is it's the majority of it is price mix. William Schmitz - Deutsche Bank Securities, Inc.: Okay. All right.

That's helpful. And then just looking at the price per blade. Do you think that the industry is at sort of peak price per blade pricing? Like it seems like it's gone very far. Every year it was profit per user per year. And it seems like you're getting some pricing friction though.

So do you think the category maybe went too far? And not that it's a bad thing, but do you think we're probably peaking in terms of price per refill blade? And then along those same lines sort of, why aren't you more aggressive in some of the direct-to-consumer channels? Like why isn't Amazon selling private label blades yet? It seems like a logical customer. And why haven't you maybe embraced Dollar Shave Club in terms of supplying them? Because obviously the product quality of some of the blades they're using is dubious at best. And it seems like if you're already selling quite a bit of private label, doesn't seem like there would be a lot of channel conflict in supplying them. David P. Hatfield - Edgewell Personal Care Co.: Okay.

Thanks. On the first question, I think at the high end, it's going to be hard to move price per blade a whole lot farther over the short to medium term. That doesn't mean the average price per blade overall needs to be capped, because I think there's different segments of consumers all the way through the market. And I think through innovation at all those tiers, we can give better product, better value, higher price. So, I think the trade-up remains a possibility and an opportunity for us and our customers.

I think it's just not the same escalator of Men's Systems than it was. I think there's innovation at the top end, but that won't be I think the main driver. In the terms of your other questions I think they're a little more like customer-driven than I'd like to comment on for competitive reasons and just for customer reasons. But... William Schmitz - Deutsche Bank Securities, Inc.: Okay.

I mean can I just ask you why – like why Amazon isn't doing private label yet though? And is there like a reason for it? Because they've added a lot of other categories. It seemed like it'd be a logical one. David P. Hatfield - Edgewell Personal Care Co.: I'd kind of rather not walk in their shoes. I'd rather not comment on that.

William Schmitz - Deutsche Bank Securities, Inc.: Okay. No. That's fair. Thank you. Chris Gough - Edgewell Personal Care Co.: Thanks, Bill.

And, operator, next question, please.

Operator: The next question is from Jonathan Feeney of Consumer Edge Research. Please go ahead. Jonathan Feeney - Consumer Edge

Research LLC: Good morning. Thanks very much.

You answered Oli's question by saying EPC or a Wet Shave takeaway including private label was down 4%. And I wasn't sure if that was a global or North American number, but I'm trying to get to the bridge between that and the 7.4% organic rev growth you showed in Wet Shave. Is that all price mix on the lower trade spend? Or – and if private label is growing faster within that, even if these Mach3 emulations, doesn't that give you somewhat of a negative mix? So I'd be interested and I'm trying to understand the pricing that's overcoming that ? Or is it International or something I'm just not thinking of? I know Sandy gave us four factors. So just the bridge between those and what's going on? I'd appreciate it. David P.

Hatfield - Edgewell Personal Care Co.: Okay. Sure. So what I was saying, the total EPC consumption down 3% to 4%, that was a U.S. Nielsen. So a Nielsen...

Jonathan Feeney - Consumer Edge

Research LLC: And that's a dollar number, not a volume number?
David P. Hatfield - Edgewell Personal Care Co.: Correct. Jonathan Feeney - Consumer Edge

Research LLC: Okay. David P. Hatfield - Edgewell Personal Care Co.: And what I'm saying is that if you look at our shipments to consumption, they were generally trending with that, except for the – so the volume impacts.

What I'm saying is the entire bridge from down 3% to 4% on a volume to our shipments up 7.8%. That's all price mix. Generally coupons, but also trade spend. That's what I'm saying. And I didn't quite follow your private label point.

So if you could walk through that again?
Jonathan Feeney - Consumer Edge

Research LLC: Yeah. Sure. Like I gather, particularly with the Wilkinson Sword substitution, but just overall, private label has been growing faster. I would think that that creates – and correct me if I'm wrong, but that would create a negative price mix factor in general. A lower dollar per unit than average for your portfolio.

Is that a correct assumption? And as private label grows faster both in the quarter and the year, that pricing more than offsets that I guess is my – is that right?
David P. Hatfield - Edgewell Personal Care Co.: So that's a different question than trying to bridge to consumption, right? So that's... Jonathan Feeney - Consumer Edge

Research LLC: Well, yeah. But it would be part of that. It would be partially offsetting and make the price that was needed even more.

That's all I meant. David P. Hatfield - Edgewell Personal Care Co.: I don't think that's a major part of the bridge, other than the customer takes a different margin on – percentage margin on private label versus branded. And that diverges Nielsen versus ours some. But that's not the main driver in the quarter.

And I go back, the major story was lower couponing and trade spend this quarter versus previous year. Jonathan Feeney - Consumer Edge

Research LLC: Thank you very much. Chris Gough - Edgewell Personal Care Co.: Thanks, Jonathan. Operator, next question, please.

Operator: The next question is from Iain Simpson of Société Générale.

Please go ahead. Iain E. Simpson - Société Générale SA (Broker): Hi there. A couple of questions if I may. Firstly, it seems that in general promotional intensity was down across the board quite meaningfully for you.

Is this kind of a market wide trend? Or is it more just that you were lapping an exceptionally promotional heavy quarter. And secondly, if we dig into the weeds on your expectations for Wet Shave a bit, you're talking about 2% to 3% growth in line with the market. Within that are you thinking your price-mix balance is likely to be pretty much in line with the market? And if so how should we think about that weighting between price mix and volume? And secondly, when we think of the parts of your Wet Shave business, the branded, the private label, and the online, any areas within that where you hope to be outperforming the market? Thank you. David P. Hatfield - Edgewell Personal Care Co.: Great question.

In the terms of promotion for the quarter, I have to say within the shaving business in the U.S., promotional intensity was – has really never been higher. Our major competitor, the percentage of volume done on promotion both for Men's Systems and also Disposables was higher than we've seen. So it was pretty heavy. We were down, but I think that was down versus, as you mentioned, a pretty high year ago. And I think we were at levels that we were pretty comfortable with.

And we are trying to keep our focus in building baseline volume, baseline share through equity and innovation. Expectations about price volume mix for next year, I'd just say that it's a balance. And it'd be relatively in line with the category. And – yeah. Sandra J.

Sheldon - Edgewell Personal Care Co.: Yeah. I mean, well, one thing to think about on the Wet Shave is we will have some new products. We'll have what we talked about earlier, the anniversarying through the first couple quarters with the fits Mach3 product. So we do – and we've got obviously international growth continuing. So we do have some relatively good volume growth in 2017 based on our current outlook.

But we also have some improvements in price mix as well. David P. Hatfield - Edgewell Personal Care Co.: Yeah. So it's kind of balanced. Sandra J.

Sheldon - Edgewell Personal Care Co.: Yeah. Chris Gough - Edgewell Personal Care Co.: Thanks, Iain. Operator, next question, please.

Operator: The next question is from Andre Shepley of UBS. Please go ahead.

Andre Shepley - UBS

Securities LLC: Thanks. Hi, everyone. David P. Hatfield - Edgewell Personal Care Co.: Hey. Andre Shepley - UBS

Securities LLC: I just have a quick housekeeping question.

Your 100%-plus free cash flow productivity guidance for 2017, is that based on GAAP or non-GAAP earnings? Thank you. Sandra J. Sheldon - Edgewell Personal Care Co.: GAAP. GAAP earnings. GAAP net earnings.

Andre Shepley - UBS

Securities LLC: Okay. Chris Gough - Edgewell Personal Care Co.: Okay. Thank you. Operator, next question, please.

Operator: There are no additional questions at this time.

This concludes our question-and-answer session. I'd like to turn the conference back over to David Hatfield for closing remarks. David P. Hatfield - Edgewell Personal Care Co.: Well, hey, thank you, all, for your time and your interest. And have a great day.

Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.