Good day, ladies and gentlemen, and welcome to the Quarter One 2016 Meritor, Incorporated Earnings Conference Call. My name is Tatyana and I will be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Carl Anderson, Vice President and Treasurer. Please proceed, sir.

Thank you, Tatyana. Good morning, everyone, and welcome to Meritor's first quarter 2016 earnings call. On the call today, we have Jay Craig, CEO and President; and Kevin Nowlan, Chief Financial Officer. The slides accompanying today's call are available at meritor.com. We will refer to the slides in our discussion this morning. The content of this conference call, which we are recording, is the property of Meritor, Inc. It's protected by U.S. and international copyright law and may not be rebroadcast without the express written consent of Meritor. We consider your continued participation to be your consent to our recording. Our discussions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Let me now refer you to slide 2 for a more complete disclosure of the risks that could affect our results. To the extent we refer to any non-GAAP measures in our call, you will find a reconciliation to GAAP in the slides on our website. Now, I will turn the call over to Jay. Jeffrey A. Craig - President & Chief Executive Officer: Thanks, Carl, and good morning. We appreciate you joining us today. It was great seeing you at our Analyst Day back in December. Let's turn to slide 3 and talk about the highlights from our first fiscal quarter of 2016. We had another strong financial quarter overall. Our adjusted EBITDA margin of 9.4% reflects a 40 basis point improvement year-over-year, which further demonstrates the sustainability of the performance we have shown over the past 12 quarters. Also, at the end of the last calendar year, we are very pleased to announce an additional piece of business in our growing relationship with PACCAR. Starting on January 1 of this year, Meritor is now in standard position for rear axles on…

And your first question on the line comes from Brian Johnson with Barclays Capital. Please proceed, sir.

Good morning. Just want to kind of drill in on a couple of items. You've been assuming $175 million of new business wins in fiscal 2016 coming out of the Analyst Day. Is that still intact? Does the incremental weakness in Class 8 affect that? What could move this number up or down? And I guess – I don't know if you count as new business or just ongoing business – where did market share in Class 8 kind of shake out in the quarter, and what do you expect for the rest of the year? Jeffrey A. Craig - President & Chief Executive Officer: Thanks, Brian. This is Jay. Thanks for the question. Yes, in (22:25) comments I made today about the $435 million of being on track new businesses, our confidence in achieving that $175 million, we do market-adjust that number for all the wins globally. So, in North America, as I mentioned, we are seeing the aggressive ramp-up of PACCAR. But please remember, we also had a pretty significant win with Scania in Europe on the braking side. We've had a good hub reduction win with Daimler in India and several other wins throughout the world, in addition to seeing our emerging market axle in China starting to get a great reception with the bus and coach manufacturers. So, there's gives and takes on the market's impact on that, but overall, we remain very confident in the number.

Second question is just around share repurchase. I mean, you must have thought the stock was cheap at $11 when you bought it back. It's now lower. But just given concerns over the cycle, how are you thinking about your kind of balance sheet downside liquidity versus share repurchases in light of – and just all how that whole – remind us how that whole European customer receivables factoring kind of fits in your thinking on that. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Hi, Brian. This is Kevin. I'll take that. Yeah, I mean, from a downside liquidity planning, we update that model pretty regularly, as we talked about at Analyst Day, in terms of how we establish how much liquidity we need to manage through the cycles, especially a down cycle that could last upward of three years. And we normally think we drive toward having liquidity in the zip code of about 20% of annualized revenue. As we look at where we sit today, and with our expectation that we are on pace to generate $130 million of free cash flow over the last nine months of the year, we feel confident about our ability to execute the balance of the program which is $94 million between now and the end of the fiscal year. We will look at the market, we'll look at the opportunities that are out there across both equity and equity-linked securities and – but we are confident we can – we have the liquidity to manage to be able to support that program.

And in terms of factoring, any change there? Kevin Nowlan - Chief Financial Officer & Senior Vice President: No, no change in factoring. We will continue to utilize those programs as operating – as part of our operating cash flow in that business.

And is that due – at least historically, I remember, is due to some – one very large customer being a rather late-by-world-standards payer? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Well, I think this is traditionally part of our working capital arrangement with our European customer base and so...

Right. Kevin Nowlan - Chief Financial Officer & Senior Vice President: ... it's just part of the agreements that we have in place with those customers.

Okay. And final question, did you contemplate the insurance recovery when you did your free cash flow guide? Kevin Nowlan - Chief Financial Officer & Senior Vice President: The original free cash flow guide?

Yes.... Kevin Nowlan - Chief Financial Officer & Senior Vice President: There were elements of certain things we were assuming in recoveries in terms of insurance, but I won't get into the specifics how much it was in terms of our expectations. But in terms of the first quarter, I don't think we were anticipating that we were going to see that flow through our results this quarter.

Okay, thanks.

Your next question comes from the line of Neil Frohnapple with Longbow Research. Please proceed.

Hi. Good morning, guys. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Good morning.

So just a quick follow-up on the share repo. Kevin, I think in prior quarters, you provided what you guys have repurchased since quarter end. Did you guys repurchase anything since quarter end? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Since quarter end, we have been in blackout. So we haven't been in the market in terms of open market repurchases.

Got it. And then just a question on the revenue guidance. So, in order to achieve the revenue guidance of $3.4 billion for the full year certainly implies a meaningful step-up in revenue from first quarter levels. Clearly, there is less working days or there were less working days and some OEM production shutdowns during the December quarter. We understand Aftermarket & Trailer, it's typically the low watermark for the year in Q1. But just in light of North American production coming down, I mean, is there anything else that we should be thinking of to boost revenue such as revenue from new business wins materializing more throughout the remainder of the year to get us comfortable with the $3.4 billion in revenue? Jeffrey A. Craig - President & Chief Executive Officer: Sure, Neil. This is Jay. I think you've listed off a few of them, actually. Our business, if you recall, at normalized stable market levels is highly seasonal with the first quarter and fourth quarter being our lowest revenue quarters, and the second quarter and third quarter being the strongest. There are several reasons for that. As you mentioned, the holiday shutdowns in North America and Europe in the first quarter and fourth quarter around production, and also the aftermarket business and brake replacement season is highly seasonal. And as you mentioned, we are seeing the ramp-up of our new business wins, as I mentioned on the call. My comments were above 50% penetration with PACCAR. We expect that to continue to increase throughout the year. And if you look at our estimate of the North American Class 8 market, you certainly can see we're not counting on that to be stronger in the back half of the year, certainly, than what we saw in Q1. So, I think those are the main reasons. And we do feel confident in that guidance.

Great. That's very helpful. Thanks, Jay. And then, just one final one. Kevin, you alluded to the fact that you expect Aftermarket & Trailer segment margins to pick up for the remainder of the year. I mean, I think last quarter, you talked to 14% to 15% for the full year. Just to clarify, is that outlook still intact? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Yeah, I think it's fair to say. As we look at the last nine months of the year, we would expect to see the margins in that segment return to more normalized levels, or what we've been experiencing in the back half of last year. And it's really driven by a couple things. One is revenue picking up, because Q1 is always the low watermark for that business; and second, it's the continued execution of material labor and burden performance initiatives as those continue to come on over the course of the year.

Great. Thanks very much, guys.

Your next question comes from the line of Colin Langan with UBS. Please proceed.

Thanks for taking my question. Just a follow-up on the aftermarket margin question. In the commentary, it notes that there is a new warehouse cost. The decrementals seem extremely high on the sales decline. Can you maybe quantify the warehouse costs, so we can kind of get a better sense of the underlying decremental ones? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Yeah, I mean – and I'd say a couple things. I mean, the headwinds we saw in Q1 on a year-over-year basis, obviously, we had a little bit of a revenue impact, but there's overall FX impacts that we saw, translation and transaction related. As it relates to the warehouse issue, if you look at our North American aftermarket business, the labor and burden year-over-year was about $2 million worth, primarily driven by the discrete issue in the quarter related to the implementation of the new warehouse system. We had an old legacy system, no longer supported, and the new system that we put in place helps us improve throughput and fill rate. So, we're happy with the new system. We had some inefficiencies as we went through the execution of launching that back in November, but that was discrete to the first quarter. So, we should be back on track as we go into the back half of the year.

How should we think about the sales trajectory for aftermarket with some of the weakness in the new vehicle market? I mean, does that actually help the demand in that business as we go through the year? Jeffrey A. Craig - President & Chief Executive Officer: Well, traditionally, aftermarket has been somewhat countercyclical. And so, again, as I stated earlier, it is also highly seasonal with a fairly dependable brake replacement season here in Q2, Q3. So, I think we should expect to see some pretty healthy revenue growth sequentially from Q1 to Q2.

And in terms of the insurance recovery within the quarter, you said you recognized $5 million of the $12 million, I believe or $17 million, sorry. Kevin Nowlan - Chief Financial Officer & Senior Vice President: That's right.

How do we think about it? Are you going to recognize more of it in this year? Or is that just a one quarter benefit? Kevin Nowlan - Chief Financial Officer & Senior Vice President: It depends. I mean, as we receive the $17 million of proceeds, we determine how much is earned and it's linked to our estimate of what the probable liability is on our asbestos exposures in the Maremont entity going forward. So, if our outlook for those liabilities were to increase over time, the potential exists that we would recognize more of that – the remaining $12 million into income. If those liabilities decreased over time from our current expectations, the potential exists that we would return some of those monies back to the insurance company, which is why it's sitting on the balance sheet at the moment as opposed to being booked as income.

Why the logic of keeping it as a – not treating it as a special item? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Well, I mean, because it's really offsetting our ongoing asbestos costs each quarter. I mean, every quarter we have millions of dollars' worth of costs that are embedded within our cost structure, and this is simply a recovery related to those costs that we have.

Okay. All right. Thank you very much.

And your next question comes from the line of Irina Hodakovsky with KeyBanc. Please proceed.

Good morning, everyone. Thank you for taking the questions. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Good morning.

I have a question for you on the revenue revisions. There is – on slide 4, there is a sensitivity that you provided for us to understand how the changes in the North American Class 8 production outlook would impact your revenue and your EBITDA margin. Looking at that at midpoint, provisions from prior outlook appear to be somewhere around a $70 million impact to the prior midpoint of revenue assumptions, but your revisions were about $50 million from prior midpoint. So, wondering what's driving the offset to that North American production decline outlook? And then your EBITDA margin was maintained at 10%. Are you finding incremental opportunities to – for cost savings, or is that something else? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Hi, Irina, It's Kevin. I'll take that. You have to keep in mind, when we're talking about the guidance that we provided before, we're talking in ranges and approximations. And our prior revenue guidance was a $100 million range between $3.4 billion and $3.5 billion. So, we were operating somewhere along that range. And as we looked at the changes that we expected to occur based on the North American truck market coming down, we felt that with that, plus any other of the small puts and takes we see, the appropriate guidance would be around $3.4 billion; again, an approximation. We could be a little bit above that level. We could be a little bit below that level. But we think the balanced look at this at this point is $3.4 billion. As you think about the margin, keep in mind this is at the bottom end of the prior guidance. In the prior guidance, we thought we would still be on track to achieve 10% with some of the programs we had out there, even if we trended down to $3.4 billion. And we continue to believe that's the case based on what we're looking at.

Thank you. And just as a follow-up to that, what are – what FX assumptions is your guidance currently reflecting? Kevin Nowlan - Chief Financial Officer & Senior Vice President: It's pretty much comparable to what we provided last time. I mean, it's about $1.10 to the euro, and I think about BRL3.90 or so to U.S. dollar.

All right. Thank you very much. Appreciate it.

And the final question comes from the line of Pat Archambault with Goldman Sachs. Please proceed. Patrick Archambault - Goldman Sachs & Co.: Okay. Yeah. Thanks very much for squeezing me in. Yeah, just a couple. I wanted to follow up – I think it was Colin Langan that was asking about the $5 million. So it is included in the EBITDA – adjusted EBITDA that you report, but it's fairly substantial, right? It feels like it would be like worth kind of 50 basis points, 60 basis points. So, is that – I mean, in that quarter, was there a kind of big disbursement that sort of offset it and the net was a wash, or is there some lumpiness to this thing? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Well, I mean, you're right. The $5 million was discrete to the quarter, a one-time item. But we have lots of pluses and minuses that hit our results, just like we had the Aftermarket & Trailer discrete item in the quarter going a little bit the other way. I think, as you've seen over time, we've been trying not to adjust out any items plus or minus as a company, and really manage through those and drive to bottom-line performance in terms of margin and bottom-line earnings. And that's what we're doing right now. So we manage all those puts and takes, and we drove to this level of margin. Patrick Archambault - Goldman Sachs & Co.: And I'm sorry to get into this, I know you said it, but the warehouse piece was just how much on a net basis? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Well, again, we had negative year-over-year labor and burden in that – in the aftermarket…

Ladies and gentlemen, thank you for your questions. I'd like to redirect the call back to Mr. Carl Anderson for closing remarks.

Thank you, Tanisha (39:22). As Jay alluded to, if there is any follow-up questions, please feel free to reach out to me directly. Thank you.