Welcome to Allison Transmission's Fourth Quarter 2016 Results Conference Call. My name is Melissa, and I'll be your conference operator today. At this time, all participants are in 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 over to Fred Bohley, the company's Vice President of Finance. Please go ahead, sir.

Thank you, Melissa. Good morning and thank you for joining us on our fourth 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 February 14. As shown on page two 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 fourth 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 three of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an Appendix to the presentation and to our fourth 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 four of the presentation for the call agenda. I'll now turn the call over to Larry Dewey.

Thank you, Fred. Good morning and thank all of you joining us today. On today's call, I'll provide you with an overview of our fourth quarter performance, including net sales by end market. Dave Graziosi will review the fourth quarter financial performance. I will wrap up the prepared comments with the 2017 guidance prior to Q&A. Prior to the overview of Allison's fourth quarter performance, I wanted to briefly comment on the stock repurchase and cooperation agreements we announced yesterday. Allison has entered into an agreement to repurchase all of ValueAct Capital's common stock holdings in the company, which represents approximately 6.5% of the shares outstanding at a purchase price of $34.50 per share or aggregate consideration of approximately $363 million. This stock repurchase agreement accelerates the share repurchase program authorized last fall by the company's Board of Directors, and reflects our growing confidence in what we believe is improved momentum in several of our end markets. In connection with Allison's repurchase of ValueAct Capital stock, Greg Spivy has notified the company's Board of Directors that he will not stand for reelection at the 2017 Annual Meeting of Stockholders. Allison intends to fund the stock repurchase with cash on hand and borrowing under its revolving credit facility. The stock repurchase is being affected under the $1 billion common stock repurchase program authorized by the board of directors in November 2016. And after completing a review of the company's business plan, including product development and capital spending forecasts supporting growth initiatives and other shareholder value-enhancing programs. Allison remains committed to maintaining a prudent capital structure commensurate with its business plan and underlying end-markets, and expects to complete the aforementioned common stock repurchase authorization program by December 2019. Yesterday, Allison also announced that it has entered into a cooperation agreement with Ashe…

Thank you, Larry. Please turn to slide 7 of the presentation for the Q4 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 increased $2 million from the same period in 2015, principally driven by higher incentive compensation expense, partially offset by favorable product warranty adjustments. Engineering, research and development expenses increased $1 million from the same period in 2015, principally driven by higher incentive compensation expense, partially offset by the cadence of certain product development initiatives. I would like to provide some additional information regarding incentive compensation to ensure that fourth quarter year-over-year variances mentioned during this call are clear. As we have discussed in the past, Allison's incentive compensation program is subject to annual performance targets established by our board of directors Compensation Committee and are, therefore, variable. Despite year-over-year reductions in fourth quarter net sales and EBITDA margin, Allison met or exceeded the full-year 2016 incentive compensation program targets, resulting in a projected payout in excess of 2015, a year in which we did not achieve the annual incentive compensation program target. Our fourth quarter performance exceeded the full-year guidance ranges provided to the market on October 24, thus requiring an expense accrual rate above the full-year incentive compensation estimate included in Allison's 2016 projection. Interest expense net decreased $4 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 fourth quarter of 2016 was $34 million, resulting in an effective tax rate of 35.4% versus an effective tax rate of 34% for the same period in 2015. The increase in the effective tax…

Thanks, Dave. Please turn to slide nine of the presentation for the 2017 guidance, end market's net sales commentary. Allison serves a wide variety of end markets in various geographies. We have consistently articulated our strategic priorities of global market leadership expansion, emerging markets penetration, product development and core addressable markets growth, while delivering solid financial results to drive value for our stockholders. We remain focused on continuing to execute our strategy and controlling what we can. Accordingly, Allison will pursue its strategic priorities while proactively implementing plans to align costs and programs across our business with actual end market conditions and growth initiatives. Before I review our 2017 guidance, I'd like to briefly address questions regarding the potential implications of the Trump presidency. Given a lack of clarity and uncertainty regarding almost any topic, potentially relevant to Allison, including trade policies, income tax reform, energy policies, defense spending, health care reform, environmental policies, infrastructure programs, to name only a few topics, we're not in a position to meaningfully comment at this time. Consequently, our 2017 guidance does not comprehend or speculate on the potential implications of the Trump presidency. Allison expects 2017 net sales to be in the range of up 1.5% to 4.5%, compared to 2016, reflecting a modest increase in the North America On-Highway end market, price increases on certain products, and a continued recovery in the Service Parts, Support Equipment & Other end market, principally driven by increased demand for North America Off-Highway service parts, partially offset by lower demand in the Defense end market. Although we are not providing specific first quarter 2017 guidance, Allison does expect first quarter net sales to be approximately flat compared to the same period in 2016, principally driven by increased demand in the Service Parts, Support Equipment & Other…

Thank you. At this time, we'll be conducting a question-and-answer session. As a reminder, we request that you each ask one question. Thank you. Our first question comes from the line of Jerry Revich with Goldman Sachs. Please proceed with your question. Jerry Revich - Goldman Sachs & Co.: Hi. Good morning, everyone.

Good morning.

Good morning, Jerry. Jerry Revich - Goldman Sachs & Co.: I'm wondering, if you could talk about what was the impact of pricing net of material costs in the quarter on a year-over-year basis. And can you remind us based on the product cadence that you have including FuelSense in 2017, what kind of contribution you're expecting for pricing within your guidance?

So, Jerry, this is Dave, in terms of your question on pricing, and obviously, RAS (20:06) as well, in the quarter was relatively small overall impact year-over-year. So not much to talk about there. I would say on the material side, we certainly did see some level of favorability. On commodities to a bit having said that as you know, we also have pass-throughs in our contracts with a number of customers. So as we start to think about that frankly going into next year, we are anticipating some level of elevation in aluminum as well as steel, which are our two largest commodities. I'll let Larry respond relative to the cadence on FuelSense and where we're at there.

Sure. Yeah, we continue to gain acceptance with the initial FuelSense offering, FuelSense1.0, we call it. We have been demoing, we've got a variety of fleets around the world and OEMs, who are testing and validating and putting into operation, the early versions of FuelSense 2.0, which is, as you know, scheduled for release – full release in 2018. So, we'll continue to be driving that process here through the remainder of this year into next year. Early results have been good. We continue with the testing to have good firm data that we can use with customers to explain the value proposition and then drive the use of that product, and the revenue associated with it. Jerry Revich - Goldman Sachs & Co.: Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of Jamie Cook with Credit Suisse. Please proceed with your question. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Hi, good morning, a nice quarter. I guess a couple of questions. Could you comment just on the overseas Off-Highway business. Obviously, we're starting to see some improvement there, and you're also assuming improvement in 2017. Can you give some more color just broadly what you're seeing across sort of mining and the energy side? And just as a follow-up, I know you're still guiding for North America Off-Highway down year-over-year on the equipment side, but are you seeing any improvement? And can you talk about what you're seeing sort of on the parts side and where there could potentially be upside for North America Off-Highway as we think about 2017?

Yeah. As far as the Outside North America Off-Highway, we do show a quite impressive year-over-year percentage, but you have to remember it's off of a low number. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Yeah, I get it. It's off of really – but still.

I think, the net total is $7 million. We're pleased to see some turn there to have hit what we think, subject to any kind of global economic shocks, what could be the low point coming off of that. So, we continue to watch and focus our product positioning, and that's certainly some work that we've done both with the new Volvo articulated dump. That's a whole new product for us. It's gotten launched in the past year and looks like it's got some legs to it, as well as some of the existing business starting to comeback – or the previous business, rather, starting to come back in the current timeframe. As far as North America Off-Highway, and specifically the energy piece, we do have continued strength, in fact growing strength year-over-year in the Service Parts business. And that's driven not only by the recovery, but as we have developed our new models in that space that we've talked about, going from the 9820 to the 9823 to 9826, and then ultimately the 9832 or 33 as we continue to finalize that work. We've also developed upgrade kits. And so, that allows someone who is doing an overhaul to actually not only complete the overhaul, but upgrade the capability by offering them a larger set of parts, which of course carries a little higher total kit price. So, it's not only reflective of the general economic circumstances, there is also a layering on, if you will, of the upgrade aspect to that that we're capturing as well. So, that's really what's driving. Obviously, like everybody, we're watching it very closely and we're certainly ready to respond, but as we've said in the past, we like to keep one foot in front of the other and we're better at reaching up than we are trying to chase down. Jamie L. Cook - Credit Suisse Securities (USA) LLC: I guess, sorry, one just follow-up question, because you guys generally tend to be a more conservative management team with regards to your guidance. The past few years you guided below the Street. This year, you're slightly ahead of the Street. I mean, just what trends are you seeing in January? Broadly, I'm assuming these positive trends continued and also as well the truck orders that came up both on the heavy-duty and medium-duty surprised on the upside on Friday for the month of January. So, any color there? And then I'll get back in queue. Sorry.

Well, certainly, you've hit on one of the key points that we continue to try to work our way through here, and that is, some of the recent data is positive. If you look at ACT's January report, if you look at the numbers that you just cited, Jamie, all of those would suggest wind at our back rather than wind in our face. And so, we continually – every month, we have what we call a sales and operations planning meeting. And at the end – later this month here in February, we'll update based on our best information, including the OEM input as well. It's all sounding good. I guess, the question is what are the underlying fundamentals versus some of the psychology, or as some have said animal spirits, because animal spirits, in my experience, they can come and go like vapors in a hurry. And so, we want to see the underlying economics and then we'll adjust our plans and update our forecast accordingly. But certainly, what we've seen, as you point out, is directionally positive. Jamie L. Cook - Credit Suisse Securities (USA) LLC: Okay. Thank you. I'll get back in queue.

Thank you. Our next question comes from the line of Tim Thein with Citigroup. Please proceed with your question.

Thank you. Good morning. Just to circle back on the question on pricing earlier, just more forward-looking, Dave, presumably with the opportunity on the pricing side greater obviously in parts, presumably, that's going to put an upward bias as we think about the parts opportunity in 2017 relative to 2016. Is that fair or...?

Yeah. I would say, I think that is, as we have pulled together our 2017 view, we, as you know, take commercial action every year. So, I wouldn't just limit pricing activity to parts across our portfolio. There's a number of, frankly, attributes that we're testing against the market and the value, more importantly, that we're delivering to the end users. So, as we continue to upgrade, as Larry said, a number of changes and improvements we've made to the product line, we're pricing accordingly. I would expect that the upturn that we have started to see in North America in terms of energy relative to the aftermarket, we talked about the fact that our expectation was that would lead out of whatever cycle bottom you like to refer to. Having said that, to Larry's point, we're taking a measured approach, as we should at this time. Prior cycles have proven to be relatively volatile in terms of restarting. There's a number of issues with end-users and their capabilities, the condition of the equipment, et cetera. So, we'll take, I think, a relatively guarded view as we get into this year, but certainly pricing is part of the program for 2017.

Okay. Thank you. And Dave maybe just to sneak in a quick one. And just bridging the EBITDA guidance with your free cash flow expectations. I get the higher cash taxes, but is there any kind of working capital dynamics or anything else that we should be aware of? I know you have the UAW negotiations later in the year, so I don't know if that's playing any role, but maybe just help on that.

Well, certainly with the assumptions on free cash flow this year, the operating working capital, as you know, will track the sales development and there's variability during the year. We had a, I think, a very good performance the second half of last year in terms of the team managing inventories and being able to react to a number of changes in the market. That being said, to your point, we do have negotiations late this year, and that's also in our operating plan. Beyond that, the big change on a year-over-year basis is certainly the cash income taxes as we've talked about, the NOL, our expectation was we're going to exhaust the balance of that in 2016, and you can see the impact of that in terms of the 2017 free cash flow guide.

Thanks for the time.

Thank you. Our next question comes from the line of Robert Wertheimer with Barclays. Please proceed with your question.

Hi. Good morning.

Hi.

Good morning.

My question is outside of North America On-Highway, and I wonder – this is more of a broad question than just on the quarter, but revenues are doing a little better there. Could you talk about whether it's product or platform or penetration beyond refuse or fire or just sort of how it's going and strategically whether after several years of really not growing too much, whether there is a reason to think this can grow for a while longer rather than just some sort of end market bounce?

Sure. Certainly, we've been – as we've indicated on calls over the years and after that, as you've point out, with mixed perhaps to be generous results. And this past year, in 2016, we were able to achieve record revenues for outside North America, that's good start, but it's just a start. And so, our focus on the growth initiatives and the level of attention and activity associated with that activity will continue. There's puts and takes, when you look at with things like, China and some of the energy vehicles, it's been a headwind. Although, I was just over there in January, with Dave and others from the staff, John Coll and Randy Kirk, and met with some customers in the transit business there, and it would appear that some of the challenges they are having with the new energy vehicles, particularly the full electric, have created a circumstance, by which they applied for exemptions to be able to buy more conventionals as a percent of their total buy. So, that maybe turning a little bit or at least halting in terms of its progression. As you know, we feel good about some of the things we've got going in Europe. Certainly, we've got – we continue to have focus on trying to grow in distribution. We've made some progress in construction and continue to drive that. Refuse were fairly strong across the region, although we've got some work to do in Southern Europe, I think, to regain some positioning there, vis-à-vis some attempts to apply some AMTs and we've got good agreement from a very large refuse customer to work with us on a study there, to hopefully bring them back in the fold. Japan is certainly positioned relative to their exports both to the States and especially Australia, but also domestically, there's been some good progress made there, in that space as well. India is coming along slow, based on some of the truck programs and those volumes will start low and build and the bus industry being still a little choppy. So as we look around the world, there's a number of good things going on. Our business with MAN continues to grow and that's something that we really didn't have three years ago, and it started with a few releases and we continue to build on that. So the point is to continue the march and drive it forward, and I think we've got a much sharper focus on it, a much more detailed focus and we saw some good results in 2016 and we're going to drive into 2017.

Thank you. That was a comprehensive answer. Think you. I mean, from what you can see that we can't see as easily. You mentioned MAN, I mean, can you see that you've specked in or designed in or whatever into more platforms, more OEMs and that's a material contributor to this year's inflection upwards in growth or is it mostly cycle this year?

There's some cycle, but there's a lot of new releases.

Excellent. Thank you.

Thank you. Our next question comes from the line of Ann Duignan with JPMorgan. Please proceed with your question.

Yeah. Hi. Your Parts business up 14% in the quarter. You know that North America Off-Highway service, I mean, I'm assuming that's oil and gas related if you could just confirm that, but you said that the quarter was weighed on by weaker Defense, can you give us some sense of what the oil and gas parts business might have been in the quarter and what you're expecting as we go forward given where rig counts have gone?

Sure, Ann, this is Dave, the – in terms of Q4 North America Off-Highway service, which is essentially all energy, was approximately $19 million, $20 million on the quarter. So as you fast forward to this year, our expectation is to be running at that quarterly cliff for first quarter and second quarter and then probably leveling off a little bit from there but overall, we certainly expect that'll be up and the majority of the increase, as you've already done the math for 2017 for our Parts end market is tied back to the North America energy side.

Is that saying no headwinds from Defense in 2017, I wonder if you would be able to separate oil and gas from anything else?

Yeah, well, the rest of the story there in terms of Defense is the team continues to work on a number of Defense opportunities. That being said, as we've talked before, the JLTV from a content perspective is less than the FMTV. So we have volume there, but it's unfavorable from a mix perspective. You have a lower average selling price for those wheeled units, so that's dynamic that's playing itself out in our 2017 guide.

Okay. So if you didn't have that negative mix, Parts might be up more, is that the way we should think of it?

Well no, the Parts is really separate and distinct from the Defense issue overall. Defense, yeah, I would look at the Defense end market and really focus on that in terms of what's happening there. I would say, we continue, as I said, work on a number of initiatives whether it's with the U.S. government, but also with allies in terms of broader initiatives, and a number of platforms on the trackside, typically those programs take longer to realize, but they're also longer life in terms of run rate. So that's something that's newer to Allison versus even 5 or 10 years ago in terms of the amount of activity that we're seeing there.

Okay, okay. I got it, I was thinking of the Defense – I thought you were talking about parts Defense. On North America On-Highway, the expectation for weaker bus and RVs, can you just delve into that a little bit, what's going on there?

Sorry, could you – this is Larry. Could you repeat the first part of that question, I didn't quite understand it here.

You noted on the On-Highway outlook that you're expecting weaker bus and RVs to...

Yeah, okay. Yeah, school bus orders as we look at the forecast, looks like that market is moderating a bit, although we'll continue to watch that. The issue with motorhomes is really two-fold, it comes down to for us how many diesel pushers are going to be built? You could have an overall market forecast, let's say, one level and then you got to peel it back and look and say, okay, what percent of the total for the net-net, if you will, are the diesel pushers, because that's where we're at, and we're virtually 100% of that sub-segment. Obviously, if the diesel pushers are a much smaller portion of the overall motorhome market and they got to the smaller chassis, that tends to go more towards Ford. So that's really what we're talking about there.

So Larry, I thought I knew every term in the truck industry, but diesel pushers, I had to think about that one, what you do (37:29)...

Okay. Fair enough.

And then, real quickly on the share repurchases, have you done the $10.5 million, is that a done deal, and how did you fund it or what's your expectation cash versus revolver, if you could give us any help there from a modeling?

Sure, Ann. It's Dave. We expect to close the share repurchase transaction later this week, and that will be funded through a combination of cash on hand and revolver borrowing.

Yeah. I know you said cash on hand and revolver, but can you give us a mix, how much cash, how much revolver?

Well, we ended the year with roughly $200 million in cash. We've talked about an operating balance. So I would expect that we'll draw down the cash on hand by probably more than half, and then the balance would come out of the revolver and the revolver we would expect to have repaid before the end of the year.

Okay. That's very helpful. Thank you. I'll get back in line.

Thank you. Our next question comes from the line of Ian Zaffino with Oppenheimer & Company. Please proceed with your question. Mark Zhang - Oppenheimer & Co., Inc.: Good morning, this is Mark Zhang on for Ian. Thanks for taking my questions. So in regards to your market share, can you just give some details of your position in North America coming out of 2016, and what you guys are expecting going into 2017? And are there any pockets of growth and opportunities that you guys are excited of within certain segments you're targeting or prioritizing as of right now? Thank you.

Sure. Let's talk about in a couple of spaces. Transit, certainly, we made some gains in recent years and we continue to push on that. As a general overall statement, we have not built into our base case significant share changes, we continue to push on that as we've indicated. Class 8 straight truck, we made some progress in 2016, we've got some activities going on there. Obviously, you've seen the mDRIVE activity. And so we think with some of their push versus some of our gains, it's probably within spinning distance of a wash at this point in time. Over time, we think, that we'll be able to continue to edge up as we did in 2016, but 2017 our base case does not assume that. The way we set things up internally is we set base cases and then we set stretch objectives. And then Class 6, 7, certainly the Ford situation where they've used – they used their product in their vehicles. In 2016 that was a different outcome than what we had initially forecast. We knew that there had been a bump in their penetration. Our forecast would have said that that should level out and in fact come back a little bit thinking that was a channel filling if you will situation in terms of the production builds. That did not happen, Ford continue to grow share in that space vis-à-vis the OEMs that we supply to. So, that situation, we assume, is going to hold into 2017. So, we haven't assumed that pull back. Mark Zhang - Oppenheimer & Co., Inc.: Okay, got it. Thank you, guys.

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

Hi. Congrats on a great quarter.

Thanks.

Wanted to ask about the outlook for EBITDA margins, curious on why you would expect a modest decline in margins at the midpoint versus 2016 in light of sales growth expected this year, particularly in a few of your higher-margin end markets which should be a positive for mix? And then you also noted higher pricing, so can you help us understand better the expected headwinds to margins this year? Dave, I think you mentioned material costs, but anything else that would preclude you guys from seeing greater margin expansion?

Sure. A couple things. So, we certainly expect to realize some selling price increases. I talked about raw materials, we expect that steel and aluminum will both be up this year. We're also continuing to make some additional investments in growth initiatives that Larry talked about, both on the marketing, sales and service side as well as the balance of the organization to support those initiatives. We've increased product engineering year-over-year for a number of different programs. As I mentioned, Defense before, we're spending more in that space this year than we have in prior years. I would describe many of those initiatives as not necessarily near-term beneficial. Having said that, the point is, you create the opportunity and it's a multi-year opportunity. So, we are continuing to make some investments there. We also have contract negotiations with the UAW late this year. So we've assumed a number of different activities this year. Relatively, it will be a busy year. But as Larry talked about in the opening remarks, the focus on what we're going to control, what we can control, executing against those strategic initiatives, and I think frankly driving better performance, as you know and as was mentioned earlier on the call, we typically earn our way into the year as well. So, we like to set those expectations that we believe are higher probability at the lower end of the ranges, and work our way up from there. So, the other point to be made is the extent that we are more successful in growing certain markets beyond what we've assumed in the program and the guidance, it is quite possible some of that pricing, if you will, will be at lower levels than we would enjoy in a mature marketplace. So, as we've talked about the challenges in emerging markets and how we think about that, the growth potential is there. The question is, initially, in many cases, they are not going to be at mature margins and that's something certainly provide for us as we think about growing this business.

Okay. But it does sound like SG&A and R&D expense might be directionally higher this year which could be one of the offsets?

Yeah.

Okay. Great. Thank you.

Thank you. Our next question comes from the line of Larry De Maria with William Blair & Company. Please proceed with your question. Larry T. De Maria - William Blair & Co. LLC: Hi. Good morning, everybody. Couple of quick questions. First, where do the incentive comp reset to for 2017 versus 2016, what kind of tailwind is that in the guide? And at the midpoint, I know you don't (44:23) mention price, but what is the price assumption, let's say, at the midpoint of the guide?

On the incentive comp, on a year-over-year basis, you're looking at a decrease of directionally $15 million-plus year-over-year, so 2017 versus 2016 reduction. So, on selling price, I would tell you, historically, we've been in the range of 50-plus basis points annually. And I would say this, we do not expect 2017 to be significantly different than that. Larry T. De Maria - William Blair & Co. LLC: Okay. That's helpful. Thank you. And then just secondly, order of magnitude net exporter, how you think about that? I know you don't want to get into the Trumponomics too much, but maybe just talk about your net export exposure or import? And then buyback assumptions, I assume we'll probably take a hiatus for that for a while, but should we assume it'd be back in the market later this year, next year, just overall assumptions? And then we'll jump out. Thanks.

Sure. On the material side, the majority of what we source is North America. And having said that, you also know from our business, the vast majority of our sales are also from North America. Having said that, we do source outside of certainly the U.S., in some cases. If you think about that, we also purchase from multinational suppliers in many cases. So, like a lot of things, in terms of Trumponomics, to use your term and Larry's comments, that's all unknown at this point. There is a number of different factors that can drive that and, frankly, the ability of our suppliers to resource as well. So, I think it's bit too early to – I wouldn't even describe it as speculating at this point. So, there is a number of things that are going to come into effect there potentially and we'll manage when we know the facts and react accordingly. Larry T. De Maria - William Blair & Co. LLC: Thank you. On the buyback assumptions.

On the share... Larry T. De Maria - William Blair & Co. LLC: Yeah.

Sure. On the share repurchase, as we said in the comments, we have the authorization that the board executed back in November for $1 billion. So, with the activity that you saw in the fourth quarter, that I mentioned, combined with the ValueAct trade, we're over $400 million, right. So as we think about it, we will take the opportunities when they present themselves relative to the market. It's certainly our expectation that we will execute the authorization from the board by December 2019. So beyond that, I don't think there is much point in commenting that I would, again, put in the speculation category. Larry T. De Maria - William Blair & Co. LLC: Okay. Thank you.

Thanks.

Thank you. Our next question comes from the line of Nicole Deblase with Deutsche Bank. Please proceed with your question.

Yeah. Thanks. Good morning.

Good morning.

Good morning.

So on the 1Q outlook for flattish revenue, it seems to me that growth is really essentially being completely driven by the service business, but I just wanted to check if any other piece of your business should be up in the first quarter?

Yeah. I mean, we've run through the guide here, we certainly except some progress in parts for the North America highway business, the balance of it, we talked about expectations relative to North America On-Highway, Hybrid Transit that really depends on the order timing placement from a number of different properties. We expect that to be up year-over-year. Defense, I would describe as flattish, but the key largely in the quarter is Off-Highway parts offsetting some of what we're seeing in North – or our expectations for the North America On-Highway business and slightly higher volume for the Hybrid Transit Bus business.

Okay. Great. Thanks. And then just on the Defense question, following up, so I understand the mix issue with respect to revenue in 2017. Does that go away in 2018, like should we be back to revenue growth in Defense?

I think, it's very early to answer that question because we don't have budgets from the U.S. government out that far and they are clearly the driver behind the tracked side of the business, which historically has been roughly half the portfolio. So, as we see 2017 developing, tracked is certainly will be – we expect that to be down 2017 versus 2016. Having said that, the 2018 question remains to be answered based on what the budget activities are going to be from the U.S government and it really goes back to Larry's comments in terms of the potential impact of the Trump presidency and what changes are made there.

Okay, thanks. I'll pass it on.

Thank you. Our next question comes from the line of Emily McLaughlin with RBC Capital Markets. Please proceed with your question.

Good morning, guys. Just wondering real quick, any update on OEM testing with TC10, or traction with the product in general with Navistar?

We continue to be released in the ProStar. We continue to work with them relative to their LT, RH tractors to work that into their product plan there, as they go forward. Certainly, you're aware of the announcement where Paccar indicated the TC10 would be offered in the Kenworth T680 and Kenworth T880 and the Peterbilt 567 and Peterbilt 579 with both Paccar MX-11 and Paccar MX-13 and Cummins ISX15, that work continues, they're down to working in the factories and obviously anytime you have a new product to installing, there's some issues that pop up. So we're continuing to work with our engineering groups, and their manufacturing groups. In terms of the field experience, we've got a 117 discrete customers that operate 230 individual fleets. And we've seen out of that a 117, we've got nearly a third of them have already placed repeat orders. So the field experience has been good. The challenge is to continue to drive for more orders and build it in an arithmetic progression as we've discussed in the past.

Great. Thanks for the detail. Congrats on the quarter.

Thank you. Our next question comes from the line of Joe O'Dea with Vertical Research Partners . Please proceed with your question.

Hi, good morning. Could you talk about your views on the North America inventory levels for On-Highway trucks. I think if you go back to the middle of 2016 and some of the changed views on guide was just uncertainty around what would happen with build plans. But now as we've gotten through the back half of the year, and the build plans that you have moving forward, do you think that we're at pretty comfortable levels both on the Class 8 straight and the Class 6, 7 trucks?

If we take a look at the most recent data, you almost would argue you're at the low end, and you've got to crank up your production rates, that's the problem with the single data – with a single month's data point. So I would say certainly we're encouraged by the recent developments. We're going to certainly track it as we always do, but track it very closely through the first quarter, and I think that's going to give us a whole lot better view of what level we've ultimately settled at. But certainly, I would say it feels better today than it did in the last call.

Great. And then just on the Service Parts and Support side of the business, when you look at the North America Off-Highway portion of that, where you see 2017 revenue, how does that compare if you go back to 2014, just in terms of how much of that decline will have been recovered in 2017?

This is Dave. Your question, if you think back to our assumptions around 2017, we would say North America Off-Highway service will be above certainly 2016 as well as 2015. The last peak that we had for that market was somewhere in the 2014 timeframe, approaching almost $100 million in terms of run rate on that business, but as we've said that's going to be driven by the installed base as well as the number of rigs that are actually deployed. You're really getting, starting to get back in between frankly the results for 2016 and then the last peak in 2014. So we're ways off from that, but certainly moving in the right direction.

Okay. Thanks very much.

Thank you. Our next question comes from the line of Mike Baudendistel with Stifel. Please proceed with your question. Mike J. Baudendistel - Stifel, Nicolaus & Co., Inc.: Thank you. Just wanted to ask you about the outside North America On-Highway. I guess, you're assuming continued challenging conditions in the emerging markets and I was under the impression that some of those might have been bottoming, if you could just give us some specifics on what you're expecting for the emerging markets and the markets outside of North America?

Well, it certainly gets down to the specific locations and specific markets we're in. For example, we have historically been quite strong in Venezuela and with their current economic challenges, while you can look across Latin America, that being a significant part of our Latin American business, it had certainly under pressure in that particular case. As I talked about India, again, buses was a primary focus. We're broadening that into more truck applications, but while bids are starting to free up, they certainly aren't at the levels they were prior to some of the concerns in the last few years. So we're seeing progress, but not, certainly not to maybe what were highs if you want to think about it that way for us in previous years. Certainly, Russia continues to be a question mark relative to the sanctions, et cetera, despite what had been some nice product positioning and release work by the team over there that certainly hobbled their abilities to execute some things. So those would be some that jump out, when I talk about those situations. Mike J. Baudendistel - Stifel, Nicolaus & Co., Inc.: Got it. Thanks very much.

Thank you. Our next question comes from the line of Michael Feniger with Bank of America Merrill Lynch. Please proceed with your question.

Hey, guys. Thanks for squeezing me in. Mike Feniger, filling in for Ross Gilardi, Bank of America. You may have covered some aspects of this on the call. But I was just hoping you could provide effectively a free cash flow bridge addressing what's basically drove the better free cash flow in 2016 and what's driving the weaker free cash flow in 2017? Thanks.

Sure. This is Dave. The several things, a few, couple of bigger drivers, right. Cash interest expense in 2017, I would view as light because of the refinancing that we completed in late September last year, so we converted or repaid some of the term loan B, which you have monthly interest payments, if you like, there to notes which were paid twice a year. So the timing of the refinancing pushed the interest that's payable on the note to 2017. So you have that, but you have to run rate adjust for. So if you make those adjustments, plus some level of increase in rate assumption that we've made for base rate, we expect cash interest expense to be up year-over-year in that, call it, $30 million to $40 million range. So that's one component of it. I mentioned inventory earlier, as we, the team here was managing to meet market expectations late 2016. We really drove inventory. We're still looking at that in terms of opportunities, but I think the going in assumption for 2017 is that we'll give back some of that inventory gain for 2017, so there will be some reinvestment, if you will, in operating working capital on the inventory side. We talked about cash income tax as the obvious point there as we exhausted the NOL in 2016. So we have no benefit in 2017 for that at all. The other piece, the story really will be the incentive compensation as we expect higher payouts for 2016 versus 2017, we return 2017 to target, that will also have to be funded out of cash flow for 2017. And so if you combine all of those items, you should have a pretty clear bridge from 2016 to 2017 guide.

Thanks, guys.

Thank you. There are no further questions at this time. I'd like to turn the floor back to Mr. Larry Dewey for closing remarks.

Well, I appreciate everyone's interest. We ran a bit over here today. Appreciate your patience, again to all the questions. It's certainly an interesting time in the various end markets that we serve, and we appreciate your interest and we look forward to updating you on the first quarter call in a few months. Have a great day. Thanks.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.