Welcome to Allison Transmission's Third Quarter 2016 Results Conference Call. My name is Rob, and I'll be your conference operator today. At this time, all participants are in a listen-only mode. After the prepared remarks, the management team from Allison Transmission will conduct the question-and-answer session. Conference call participants will be given instructions at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Fred Bohley, the company's Vice President of Finance. Please go ahead, sir.

Thank you, Rob. Good morning and thank you for joining us on our third quarter 2016 results conference call. With me this morning is Larry Dewey, Allison Transmission's Chairman and Chief Executive Officer, and Dave Graziosi, Allison Transmission's President and Chief Financial Officer. As a reminder, this conference call, webcast and presentation we're using this morning are available on the Investor Relations section of our website, allisontransmission.com. A replay of this call will be available through November 1. As shown on page 2 of the presentation, many of our remarks today contain forward-looking statements based on current expectations. These forward-looking statements are subject to known and unknown risks, including those set forth in our third quarter 2016 results press release and our annual report on Form 10-K for the year ended December 31, 2015, and uncertainties and other factors as well as general economic conditions. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those we express today. In addition, as noted on page 3 of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You will find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an Appendix to the presentation and to our third quarter 2016 results press release. Today's call is set to end at 8:45 AM Eastern Time. In order to maximize participation opportunities on the call, we'll take one question from each analyst. Please turn to slide 4 of the presentation for the call agenda. Now I'll turn the call over to Larry Dewey.

Thank you, Fred. Good morning and thank you for joining us today. On today's call, I'll provide you with an overview of our third quarter performance, including net sales by end market. Dave Graziosi will review the third quarter financial performance, including adjusted EBITDA and adjusted free cash flow. I'll wrap up the prepared comments with the full year 2016 guidance update prior to Q&A. We're pleased to report that Allison's third quarter 2016 results are within the full year guidance range as we provided to the market on July 27. The year-over-year reductions in the North America On-Highway and Off-Highway, and Service Parts, Support Equipment & Other end markets net sales are consistent with tempering demand conditions in the North America On-Highway end market and the previously contemplated impact of low energy prices. Allison continued to demonstrate solid operating margins and free cash flow, while executing its prudent and well-defined approach to capital structure and allocation. Please turn to slide 5 of the presentation for the Q3 2016 performance summary. Net sales decreased 12% from the same period in 2015, principally driven by lower demand in the North America On-Highway and Off-Highway end markets, partially offset by stronger demand in the outside North America On-Highway end market. Gross margin for the quarter was 47.1%, a decrease of 80 basis points from a gross margin of 47.9% for the same period in 2015, principally driven by decreased net sales, partially offset by favorable material costs. Please turn to slide 6 of the presentation for the Q3 2016 sales performance summary. North America On-Highway end market net sales were down 15% from the same period in 2015, principally driven by lower demand for Rugged Duty Series, Highway Series and Pupil Transport/Shuttle models partially offset by higher demand for Transit and Other Bus models. North America Hybrid-Propulsion Systems for Transit Bus end market net sales were down 33% from the same period in 2015, principally driven by lower demand due to engine emissions improvements and other alternative technologies. North America Off-Highway end market net sales were down 92% from the same period in 2015, principally driven by lower demand from hydraulic fracturing applications. Defense end market net sales were down 26% from the same period in 2015, principally driven by lower demand for Tracked Defense, partially offset by higher demand for Wheeled Defense products. Outside North America On-Highway end market net sales were up 16% from the same period in 2015, principally driven by higher demand in Europe and Japan, partially offset by lower demand in China. Outside North America Off-Highway end market net sales were down 50% from the same period in 2015, principally driven by lower demand in the mining sector. Service Parts, Support Equipment & Other end market net sales were down 6% from the same period in 2015, principally driven by lower demand for North America service parts. Now, I'll turn the call over to Dave Graziosi.

Thank you, Larry. Please turn to slide 7 of the presentation for the Q3 2016 financial performance summary. Given Larry's comments, I'll focus on other income statement line items and adjusted EBITDA. Selling, general and administrative expenses decreased $7 million, principally driven by unfavorable product warranty adjustments in 2015, partially offset by higher incentive compensation expense. Engineering research and development expenses decreased $3 million, principally driven by the cadence of certain product initiatives. Interest expense net decreased $12 million from the same period in 2015, principally driven by favorable mark-to-market adjustments for our interest rate derivatives, partially offset by interest expense for our interest rate derivatives that became effective in August 2016. Income tax expense for the third quarter of 2016 was $26 million, resulting in an effective tax rate of 37.2% versus an effective tax rate of 37% for the same period in 2015. The increase in the effective tax rate was principally driven by an increase in estimated taxable income for certain foreign entities. Net income for the third quarter was $45 million compared to $47 million for the same period in 2015. The decrease was principally driven by decreased gross profit, expensing previously recorded deferred financing costs as a result of the long-term debt refinancing completed in 2016 and higher incentive compensation expense, partially offset by the environmental remediation expenses charge in 2015, favorable mark-to-market adjustments for our interest rate derivatives, unfavorable product warranty adjustments in 2015, and decreased engineering research and development expense. Adjusted EBITDA for the quarter was $151 million, or 34.7% of net sales, compared to $174 million, or 35.3% of net sales, for the same period in 2015. The decrease was principally driven by decreased net sales and higher incentive compensation expense, partially offset by unfavorable product warranty adjustments in 2015, lower manufacturing…

Thanks, Dave. Please turn to slide 9 of the presentation for the full year 2016 guidance update. Given third quarter 2016 results and current end market conditions, we are updating our full year 2016 guidance to a year-over-year net sales decrease in the range of 8.5% to 9.5%, an adjusted EBITDA margin in the range of 34% to 35%, and adjusted free cash flow in the range of $435 million to $455 million, with capital expenditures in the range of $70 million to $75 million. Allison is affirming the remaining guidance released to the market on July 27, specifically cash income taxes in the range of $10 million to $15 million. Our full year 2016 net sales midpoint guidance improvement of 100 basis points reflects better second half performance in the Outside North America On-Highway end market and higher demand for North America Off-Highway Service Parts. Partially offsetting these modestly improved end market conditions are the North America On-Highway OEMs' fourth quarter shutdown schedules and Allison-relevant end market vehicle inventory to retail sales ratios. Although we are not providing specific fourth quarter 2016 guidance, Allison does expect fourth quarter net sales to be approximately flat sequentially and down from the same period in 2015. This concludes our prepared remarks. Rob, please open the call for questions.

Thank you. At this time, we'll be conducting the question-and-answer session. As a reminder, we ask that you please ask one question. Thank you. Our first question is from the line of Jamie Cook with Credit Suisse. Please proceed with your question. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Hi. Good morning.

Good morning. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): I guess one question, and I guess you're really not going to want to talk about 2017, but if you could just talk broadly. I guess it was nice to see – Off-Highway really can't get much smaller, given where we are today in the third quarter of improvement in the parts business. I guess if you could just provide by sort of market where you have the most confidence level that we are at or close to bottom for the different markets that you participate in, and then just what you're sort of assuming for your customers in terms of production cuts. We are hearing risk of cuts in the fourth quarter, and is there a risk that bleeds into 2017? Thank you.

Sure. Let me try to just step us through. In terms of North America On-Highway, I think you've captured the key issue, and that is, what does the fourth quarter portend? We certainly have a very detailed list of the OEM shutdown plans. They do update those as we go forward, but the closer we get, I think the firmer they become. Certainly a significant year-over-year difference. I think, as we said earlier this year, it would appear that they are attempting to address the overhang in the retail – the inventory-to-retail sales ratios both in Class 8 straight truck and the Class 6, Class 7 medium-duty space. The real issue is, they've got their shutdown plans in place. What will be the underlying demand against what has been forecast? One could mathematically deduce that they are addressing the inventory overhang, which would then yield a cleaner path in 2017. Obviously, we'll wait and see what the underlying demand is to see how much progress those shutdown plans actually make relative to that inventory-to-retail sales ratio. As we look around the world, obviously, we think Latin America is going to continue to be a little choppy. We feel, I think, pretty positive about where we're at and some of the momentum we have in Europe and Japan. China, we're still trying to sort through what the net plan going forward is in some of the transit bus space there with the new energy vehicles. Certainly working hard in the truck space and in the Tier 2 and Tier 3 cities relative to conventional transit buses. So, at a fairly high level, that's kind of the On-Highway. In terms of energy, there's a lot that's been said. Certainly, we're pleased to see a little bit of the parts business that has rolled in. I don't think anyone is suggesting a huge robust 2017. Our initial planning is fairly conservative, as is typically the case with Allison. We will, obviously between now and the end of the year into the first part of next year prior to our call, be refining that as we work with our customers in that space. So, that's kind of where we're at on most of the commercial business. Defense, obviously, that tends to be program-driven. And I think that with the JLTV and some of the other programs and with the work that we're doing with Oshkosh on some of their announced programs we'll be in line with that information that's already been provided. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Okay. And then, sorry, any color on mining?

We're not anticipating a recovery in mining at this point in time for 2017. Jamie L. Cook - Credit Suisse Securities (USA) LLC (Broker): Okay. Great. Thank you. I'll get back in queue.

Our next question is from the line of Ian Zaffino with Oppenheimer. Please proceed with your question. Daniello Natoli - Oppenheimer & Co., Inc. (Broker): Yes, hi. Good morning. This is Dan Natoli in for Ian. Just a quick thing on the energy part of your business. I mean, clearly, we're seeing some recovery in oil and looking back at the drilling and related fracking, can you give maybe not necessarily a point estimate, but a range where you think the oil would have to be for that to show up in your bottom line again? Thank you.

I think you've got to be well above. A lot of people have cited $50, others have cited $60. I think that certainly is reasonable bookends. The other piece of that isn't just a point estimate. Obviously, there's got to be some expectation if that's a sustained kind of a number, and I think that's probably – I won't say the majority of the issue, but a more significant issue due to some of the volatility that we've seen in the last couple of years. So, I think you're looking at that kind of a range and it's got to be something that people feel is going to be sustained. Daniello Natoli - Oppenheimer & Co., Inc. (Broker): Perfect. Thank you.

Our next question is from the line of Larry De Maria with William Blair. Please proceed with your question. Lawrence De Maria - William Blair & Co. LLC: Hi. Thanks. Good morning. Can you guys just talk about medium-duty market share trends in North America and what you're hearing from customers? And, obviously, there are some changes in marketplace, and where we are and where we might end up shaking out in a more sustainable long-term rate? Thanks.

Sure. Certainly, one of the things that we pay a lot of attention to is in a couple of areas. We've got some new entries into the school bus market relative to propane, but propane – and there's been some interesting gasoline engines. Certainly, we're not positioned as well with gasoline entrants as we are with the diesel. So, we monitor that pretty closely relative to our ambitions to continue to drive our shares we have over the last couple of years. The other piece that is a factor here is we watched the Ford medium-duty. As you know, that's – they use their internal product in their vehicles at this point in time. Certainly, there was probably some pent-up demand from the go-dark period. I think one of the other factors is how big a player is U-Haul, what their forward gas purchase is going to be going forward. And then, you've seen the share numbers as they move around a bit. Ford certainly has picked up some share vis-à-vis other vehicles, so that has an impact as well. Those are probably the challenges. On the upside, we continue I think in the medium-duty space to make progress vis-à-vis the other product alternatives. Relative to the overall market, I think the key is going to be – for 2017 is going to be this point that we talked about earlier, how effective are the shutdown periods in Q4 2016 for clearing the decks for 2017? When we look across our OEMs, there are different views of that. Some would indicate – they all believe that they're doing what's necessary to clear the decks. There are different views. Some would say that they'll be in a position fairly early on in 2017 for a rather step change. Others would say, okay, we'll see a little bit in the Q1 and then for the remainder of the year is when we would expect a more robust recovery, more in line with the ACT kind of forecast for growth from really 2017 through 2020. Lawrence De Maria - William Blair & Co. LLC: So, do you think you – thank you for that. Do you think that the – will you have kind of Ford (21:01) is manageable at this point or are we going to continue to see them grow share next year? Or I understand it obviously depends on some production volumes and excess inventory, but in an apples-to-apples, do we think that they're going to continue to grow into next year or will find an equilibrium?

I think we're probably closer to an equilibrium point than we are in process on that. Lawrence De Maria - William Blair & Co. LLC: Thank you.

Our next question is from the line of Neil Frohnapple with Longbow Research. Please proceed with your question.

Hi, guys. Congrats on a great quarter.

Thank you.

Could you provide a little more granularity on the revenue growth in Q3 within Outside North America On-Highway? The higher demand in Europe you call out, was that all driven by growth in underlying production or were there certain vehicle platforms or countries that you're gaining market share in from recent vehicle release wins? And just as a follow-up, could you comment on sustainability in the fourth quarter and in 2017? Because it sounds like that was certainly more positive than you guys had thought three months ago. Thanks.

Sure. If we take a look at the On-Highway, and that's clearly where the Outside North America positive results came from, certainly not Off-Highway. On the On-Highway side, you take a look at it and it's really – if you're looking at the headlines, it's out of the Europe, Middle East, and Africa region. Truck volume, sales are up significantly, and that's really a couple of factors. Number one, I think we're seeing some good traction in some of the targeted locations, and we're also seeing a mix shift. We're seeing in the larger products – the 3000 Series, 4000 Series On-Highway, certainly we've seen a disproportionate uptake there. Again, partially driven by the vocations that we're targeting there. But that also helps us from a revenue standpoint. The military unit volumes have held up pretty well, a little higher than what we had planned. We do see some downtake in some of the bus unit volume. But overall, certainly from a Europe standpoint, some solid gains net-net really across all the major Western European truck OEMs, and also got some business in Russia with KAMAZ. So, some positives there based on some of the work we've done over the last couple of years. Probably one where we haven't been represented very well in the last couple of years has been MAN, and we're seeing an increased number of releases there, which is encouraging, because that certainly broadens our reach into the markets where they're strong. Japan, we've had really a couple of pieces there. Bus unit volume sales are up significantly. Folks were trying to provide as alternatives the AMTs in some of those. And what they've learned is that, while it's perhaps priced less expensively, it doesn't really satisfy their needs in that space. And so we've really been able to do a nice job in increasing our share there. And then, of course, both domestically to some extent, but particularly with exports to Australia in the truck side of things, that continues to be very strong for us. So, those would be probably the two highlights. And we feel good about the momentum we've got. Clearly, we can't take our foot off the pedal there and we're continuing to push through some of the growth initiatives we've got. But we're starting to get a little traction, but we've got a lot of work to do and there's still a lot more opportunity there, as you know.

Great. Thanks so much, Larry.

Our next question is from the line of Tim Thein with Citigroup. Please proceed with your question.

Great. Thank you. And maybe one for you, Dave, just on capital allocation as you approach the completion of the current share repurchase program. In light of the recent bond issuance and some of the refinancing, can you just kind of update us in terms of the flexibility you have under both the bond and the credit indenture in terms of your flexibility to return cash to shareholders and kind of how you're thinking about that given where you currently sit from a net leverage perspective?

Sure. The refinance that you mention, we completed in September a number of objectives there. Really was not something we needed to do at the time. We would certainly describe it as opportunistic. Frankly, we've been staying close to the markets. I think you know Allison's history. We've amended that credit agreement 12 times prior to September. We felt market conditions were consistent ultimately with our objectives of extending tenor as well as locking in what we believe are some very attractive long-term financing rates. The structure ultimately with the notes that indenture, from a restrictive payments perspective, defers to the credit agreement. That's an important point. The prior notes that we've had, the indenture had a separate builder basket that ultimately built at a discount. So, to your point or question on capital allocation, the ability to return capital to shareholders at some level prior indentures were more of a governor on that process than the credit agreement. We've now addressed that issue with this series of 24 notes. We feel very good about that. In context of, again, as we've talked about many times, our capital allocation policy, starting with the prudent structure, we target a net leverage of 3 to 3.5 times. As I said, we finished third quarter at a little over 3 times. We feel very good about positioning again to deliver on our commitment, which is returning capital to shareholders. So, to Larry's earlier comments, it's about performance, which is what we try to focus the team on here. It's a nice problem to have, which is generating cash flow and then figuring out a way to get that back to our shareholders. You mentioned the share repurchase authorization from 2014, $0.5 billion. We've completed $475 million through the end of third quarter. That's leaving $25 million will be the math. We're certainly in the process of addressing that issue with the board in due course and we'll be following up when news is available on that front.

Understood. Thank you.

Our next question is from the line of Seth Weber with RBC. Please proceed with your question.

Hey. Good morning. In the release and presentation you specifically called out lower material cost benefit. I'm wondering, is that sustainable into the fourth quarter and into next year? And you didn't have any commentary on pricing. I'm wondering if you could just talk about kind of price cost going forward. Thank you.

Sure. The material, as you mentioned, we have the favorability year-over-year through the third quarter. We expect some additional tailwind there for fourth quarter as we get into 2017. As Larry said, we're still pulling together our thoughts as part of that process. Certainly, we'll be taking a hard look at those issues. As you know, our history has been to financially hedge some of our aluminum exposure, and that's been previously disclosed. As we think about selling price for third quarter, it was favorable, but frankly, from a rounding perspective, we did not bother going into that. The other side of revenues, we are favorable slightly on FX as well, but again, it rounded down. But I would expect, as we've talked about positive pricing overall for 2016 versus 2015, and then we'll provide an update on 2017 guidance as we get into the first quarter call.

That's perfect. Thanks very much.

The next question is from the line of Nicole Deblase with Deutsche Bank. Please proceed with your question.

Yeah, thanks. Good morning, guys.

Good morning.

So, my first question is around the service business. So, you guys called out 8% sequential growth during the quarter. Can you just elaborate on what areas of the business drove the sequential improvement?

To make sure I understand the question, you're going to the sequentials?

That's right. Yeah.

Year-over-year. On the sequentials, I believe that the big drivers were the same ones on the year-over-year, essentially the Outside North America On-Highway. We did see a little bit of the Off-Highway Service Parts were up sequentially. So, that was another piece of it, off of a pretty low base, but nonetheless sequentially it was up quarter-to-quarter. Those would probably be the drivers. Fred?

Yes?

Is there something you want to add there?

Yeah. Nicole, the parts, it's On-Highway Service Parts globally, and then more specifically, a stronger quarter with North America Off-Highway Service Parts.

Okay, got it. That's helpful. Thanks. And then with respect to just Defense, when will Allison start booking revenue related to the JLTV program?

Well, we book as we ship products. So, while we have the forecast and we've all seen the program layout – and it does bounce around a little bit relative to the production schedules of the OEM, but we book revenue as we ship the product.

Okay. So, 2017 is going to be kind of the incremental big year for JLTV for you, guys?

Yeah, there is some low volume. Obviously, the program, as you know, was pushed out a little bit, the part of it with the protest, et cetera. And so, we do have a limited amount of volume, certainly much lower than originally forecast for 2016. But then, we expect to ramp up to the normal program cadence in 2017.

Okay.

Nicole, this is Dave. I would certainly, obviously, stay close to Oshkosh's public announcements. And the cadence there from a volume perspective, as Larry said, it's been slower – lower rate initial production than had originally been expected, given the push out on timing. But I think they provide updates as they're going along with their quarters as well.

Yeah, definitely it makes sense. Thanks. I'll pass it on.

The next question is from the line of David Leiker with Robert W. Baird. Please proceed with your question. David Leiker - Robert W. Baird & Co., Inc. (Broker): Good morning, everyone.

Good morning, David. David Leiker - Robert W. Baird & Co., Inc. (Broker): We've bounced around 2017 a little bit here. I appreciate some of the comments. From a high level perspective, we look at some of the margin drivers and incremental revenue drivers, are there are any high level things you can share in terms of change in launch activity for new programs or cost actions or things along those lines, the cash side of the equation that we should just keep in mind as we look at 2017?

Sure. We've talked about in general – top-down as you start thinking about positioning for 2017, certainly some commercial pricing, as you would expect, we normally take, they'll be end market driven as well as specific to certain end market conditions, customer situations. The TC10, we've talked about before in terms of pushing forward on that. As Larry said, I think it's early days in terms of Off-Highway you can pick your oil price and try to figure out what's going to happen there. I think some of the larger end user comments here over the last week would be instructive there in terms of their expectations. I think it's the statement several times apparently from a number of different parties around tying investment to returns, obviously, make sense. As we've said many times, that's a story of have and have nots relative to capital and being able to deploy, ultimately take market share and act. I mean, I think, we're well – we feel we're well-positioned to be able to respond to that when that market does turn. From a cost perspective, we're staying close to that part of the process. We like to focus on things we can control and earn our way into the year. I would not expect a different approach to 2017. I would also say, as you think about the material cost side, there has been talk in the market and you can see some of – at least the forwards (33:56) pitching some level of higher price expectations potentially on some of our inputs. We're tracking to that. We also have, at the same time, a number of supply chain initiatives and the team has been working very hard here over the last few years to deliver on those opportunities. In addition, the operations team is pushing the agenda as we should, which is how do we do things better, more efficiently, and safer. So, that's all part of the process here. And again, we would look forward to providing our thoughts on 2017 in the first quarter call. David Leiker - Robert W. Baird & Co., Inc. (Broker): Great. And then just two quick follow-ups, about taxes, cash taxes, tax rate. And then secondly, are you involved with the GM medium-duty truck program?

First, the first question on cash taxes. As we've said, we expect to fully exhaust our net operating loss in 2016. So, that would imply post-2016 what we've said is if you take our – whatever EBITDA that you calculate or project, less $500 million and multiply that result times roughly 38%, that's a good starting point for the cash taxes for 2017.

Relative to the question about the GM program, we obviously don't comment on our OEMs' programs prior to their announcements. It would be fair to say that we are actively engaged at all times with our OEMs. David Leiker - Robert W. Baird & Co., Inc. (Broker): Okay. Great, great. Thank you very much. Great quarter.

Thank you.

Our next question is from Mike Baudendistel with Stifel. Please proceed with your question. Mike J. Baudendistel - Stifel, Nicolaus & Co., Inc.: Great. Thank you. If I can just ask sort of a high-level question. I mean, if you look out sort of a few years, sort of absent volatility in some of these end markets, what do you view as being the major areas of revenue growth? I mean, is it growing into adjacent markets that are outside of fully automatic transmissions? Is this more this international growth? Just any color there would be great.

Sure. Couple of things. There would be some market recovery in energy and mining at some point in time. We can argue about when it is, but it'll come. ACT has indicated some general market growth in the space for our relevant markets, end markets, so we would see some of that. But more importantly, as penetration growth, certainly the overseas number of growth initiatives that we're driving in a disciplined manner, as well as even here in North America particularly in the tractor space where we've targeted the TC10. And also, we think there's some opportunity with maybe some of the lower torque engines with our 3000 Highway Series model. So, there is some work that we're doing there. Certainly, some more runway, we believe, in what some would call the severe service, the Class 8 straight truck in construction and other related vocations. So while we've made some nice gains there, it certainly is not at the level of some of our medium-duty penetration. So, we think there's some more opportunities there. And in the Defense space, we've recognized certainly, and we talk about it, the opportunity with the U.S. military returning to more, what we might call, normal, non-conflict periods of business. And we've been working very diligently, of course, under state and other governmental approvals for international business, which has a little different twist, because that's handled more like commercial business, which of course we're very comfortable with as opposed to the government, U.S. government contracting process. Mike J. Baudendistel - Stifel, Nicolaus & Co., Inc.: Great. Thank you.

You're welcome.

Our next question is from the line of Alex Potter with Piper Jaffray. Please proceed with your question. Alexander Eugene Potter - Piper Jaffray & Co.: Hi, guys. Thanks. Wondering if you could give some color regarding R&D spending. So basically, just trying to get an update both from a qualitative and quantitative standpoint. So basically, how much do you plan to spend maybe over the next couple of years in terms of percent of revenue, and then what do you plan on spending it on? Thanks.

Sure. This is Dave. The R&D, the way to think about that, and we've talked about this a bit in the past, we don't per se budget our engineering funds as a percent of sales. We budget it based on programs and opportunities, right? So, we look at ways to invest smartly and develop products that actually are going to generate profits for the business and have value to our end users. So, with that as a focus, we're always looking at a number of different iterations of both current products as well as new technology development. You look at the run rate over the last few years, certainly you can – you'll note that it was down 2015 versus 2014. And again, what we've talked about for 2016 is below that level of 2015. That being said, as we're – again, we'll provide the update on 2017 guide in the first quarter, but we certainly feel there's a number of opportunities for Allison to be investing in terms of engineering. I would say, specific to fourth quarter in terms of expectations, with our midpoint guide, we expect fourth quarter to probably be the highest of the four quarters for the year as we have a number of different initiatives that we're running through into the fourth quarter. So, it is not a linear process with engineering. There's a cadence to the development of the various programs. But overall, we would expect, again, the result for 2016 to be below the 2015 level.

Yeah. This is Larry. Just one little add on that. We feel pretty good about what we're continuing to develop. We're certainly not starving the activity even with the reductions. There's couple of things going on that are some great work that's been done by the technical community. The first thing is, they have made huge strides, and it's really reaping the fruit of the seeds they planted going back, gosh, four or five years for analytics versus physical testing. We're able to reduce the amount of hardware we consume, which is a very expensive part of product development. And the guys have done a great job. The team has done a great job with some of the work they've done. It's provided us with the ability to do design work with reduced – as I've said, reduced amounts of hardware. We're able to move faster and they've done a great job with that. The other thing that they've done is they have been able to come up – it's really been quite clever – with variance of existing products that are so significant that they yield very clear and understandable benefits that we can take to customers. And by leveraging the existing architectures and modifying them, we've got a much higher reliability factor that goes with that. And so we're able to essentially come up with a new proven product as opposed to a new clean sheet product, where you certainly work in the development process to get every bug out of it, but that's a challenge and much easier to take a product where you're at a very attractive parts per million kind of quality situation and drive that with the new benefits into the market. And so, you might look and say, well, gosh, dollars are different, they're X to Y, but you really need to look at what we're able to accomplish. And the team has done some nice work there, some very clever. I'm very pleased with what they've been able to do. There's always a longer list. It's like Christmas. If you ask your kids what they want, there's always a little bit longer list than what ends up under the tree, but that's a good process too, because it focuses on the highest value add to the enterprise. And in the meantime, it gives folks to think about the ones that maybe fall just below the do line and bring those forward in a better context for the future year. Alexander Eugene Potter - Piper Jaffray & Co.: Excellent. Very interesting. Thanks a lot for the color.

Thank you. I'll now turn the call back to Mr. Larry Dewey for closing remarks.

Well, I want to thank everyone on the call today for your interest. We're going to continue to finish out 2016 as strong as we possibly can, in light of the relatively uncertain exogenous economic and industry-specific factors . We're also in the process, as we've touched on several times in the call, finalizing our plans for 2017, as well as certainly taking those necessary actions to position our enterprise for 2017 and beyond. And we look forward to talking again on our next call. Thank you and have a great day.

Thank you. This concludes today's conference. Thank you for your participation and you may now disconnect your lines at this time.