Good morning and welcome to Carpenter Technology's First Quarter Earnings Conference Call. My name is Greta and I'll be your coordinator for today. At this time, all participants will be in a listen-only mode. After the speakers' remarks, you will be invited to participate in the question-and-answer session towards the end of this presentation. I would now like to turn the call over to your host for today, Mr. Mike Hajost, Vice President of Investor Relations & Treasurer. Please proceed. Michael A. Hajost - Vice President & Treasurer: Thank you, Greta. Good morning, everyone, and welcome to Carpenter's earnings conference call for the first quarter ended September 30, 2015. This call is also being broadcast over the Internet along with presentation slides. Please note, for those of you listening by phone, you may experience a time delay in slide movement. Speakers on the call today are Tony Thene, President and Chief Executive Officer; and Tim Lain, Vice President, Controller and Chief Accounting Officer. Also, in the room, I'm pleased to announce is Damon Audia, Carpenter's new Senior Vice President and CFO. Statements made by management during this earnings presentation that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter's most recent SEC filing, including the company's June 30, 2015, 10-K and the exhibits attached to that filing. Please also note that in the following discussion, unless otherwise noted, when management discusses sales or revenue, that reference excludes surcharge. When discussing operating income, that reference excludes pension, earnings, interest and deferrals or EID. When referring to operating margin, that is based on sales excluding surcharge and operating income excluding pension EID. I will now turn the call over to Tony. Tony R. Thene…

Your first question comes from the line of Gautam Khanna with Cowen and Company.

Good morning, Tony. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Gautam. How are you?

Doing great, thanks. Hey. I was just wondering if you could update us on your buyback plan and your CapEx – I m sorry, your inventory target for the year. Do you expect to have a net drawdown of inventory this year? What should we make as a pace of the buyback sort of slowing in the second and third months of the quarter, especially thinking about that going forward? Tony R. Thene - President, Chief Executive Officer & Director: Yes. So I'll take the first one, your inventory question. Yes. It's still our plan to work hard to get the $50 million of inventory out. As we said, the first quarter is usually higher as we get ready for the higher shipments that we expect in the second half. So we still remain committed to that. In terms of the buyback, it's not going to be linear. We are on pace, I think, to execute that program. Obviously, there are times that we can and can't be in the market. We take that very seriously. So I wouldn't read anything into that as far as our intent to move forward.

Okay. And can you just talk a little bit about what the utilization level is in Athens right now and where you expect it to be given the demand increase you expect in the second half exiting this fiscal year? Tony R. Thene - President, Chief Executive Officer & Director: Right. It's a tough question, Gautam, as you know I have talked about several times. We are at a low level of utilization in Athens right now. You could say we're at 15% to 20%. We'll have to see how the oil and gas market behaves in the second half of our fiscal year and how the qualification process moves. But I don't anticipate that moving significantly upward over the rest of our fiscal year.

Okay. That's despite the aerospace qualifications being reached? Tony R. Thene - President, Chief Executive Officer & Director: Yes. What we've got – yeah, I think, as you look at the big ones that – the thing that's going to move Athens, Gautam, is the aerospace market continuing to move upward. That's what's going to do it. And we want to make sure that our qualifications are timed that we can take advantage of that increase. And right now we believe we're making good progress.

Okay. I'll turn it over. Thank you, Tony. Tony R. Thene - President, Chief Executive Officer & Director: Thanks, Gautam.

Your next question comes from the line of Steve Levenson with Stifel. Please go ahead. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, everybody. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Steve. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Do you guys do some work? Is there a particular oil price that you think has to be reached before demand starts to recover in that market? Tony R. Thene - President, Chief Executive Officer & Director: Well, I'll leave that to the experts, Steve. I know that there's a lot of material out there on that one and a lot of different opinions. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Okay. Thanks. Second, on aero programs, I know one of your customers has had a few issues in some of the testing of their agents. Has that slowed down their drawing of material or are things moving forward as you expected? Tony R. Thene - President, Chief Executive Officer & Director: We've not seen any impact on our aerospace, our sales or how we expect them to be going forward. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Okay. And last question. You talked about the different powders and you mentioned some applications. I don't think you mentioned isothermal foraging. Is that something you can supply for too or would you have to make some additional investments to further process powders? Tony R. Thene - President, Chief Executive Officer & Director: No, we'd be able to do that. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc.: Okay. Thank you very much.

Your next question comes from the line of Chris Olin with Rosenblatt Securities. Please go ahead.

Hey. Good morning. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Chris.

I wanted to just dig a little bit further into your commentary on aerospace. And looking at your second half expectations, is that driven by new builds or are you seeing anything changing regarding the MRO or the replacement market out there? Tony R. Thene - President, Chief Executive Officer & Director: No, we're not seeing any specific changes. I mean, usually our first quarter is our lowest quarter in terms of aerospace due to the seasonality. We've experienced I think four quarters in a row now of year-over-year growth. And there's nothing out on the horizon that would tell us that that would change for us over the next three quarters.

Okay. There has been some discussion with some of your competitors and some other companies about perhaps the aerospace channel over-purchased over the last couple of quarters. And I know you hit on that with the titanium fastener side. I was just curious if you're seeing any added inventory in the other material that you supply. Tony R. Thene - President, Chief Executive Officer & Director: No, we are not.

Last question. When you talk about the certifications or the approval process with Athens, how long does that typically take to, after the approvals are given, to translate into better volumes? Tony R. Thene - President, Chief Executive Officer & Director: Yeah. Well right now, if you look at the oil and gas, it's going to take the market coming back, right, to have any significant volumes down at Athens.

If we saw some approvals on aerospace in calendar 2016, would we assume that that drives volumes in the calendar 2017 year or how do I think about the aerospace contribution? Tony R. Thene - President, Chief Executive Officer & Director: Yes.

Got you. Tony R. Thene - President, Chief Executive Officer & Director: Yes.

Thank you. Tony R. Thene - President, Chief Executive Officer & Director: Thank you.

And your next question comes from the line of Andrew Lane with Morningstar. Please proceed.

Hi. Good morning. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Andrew.

Could you talk a little bit about what the product mix of your backlog looks like right now, particularly for aerospace shipments? Are the orders in your backlog by and large associated with higher margin product lines relative to what you shipped in fiscal 2015? Tony R. Thene - President, Chief Executive Officer & Director: I would say if you take a look at our backlog, it's pretty consistent. It's down a bit, only because the lead times have come in a little bit. But if you look at the mix, I would say it's pretty similar.

Okay. Thanks. And then finally here, given that you guided to $120 million of CapEx this year, I wanted to ask as to when you expect to incur CapEx for the new titanium powder project at Athens? And if it starts this fiscal year, where does that leave your estimate for sustaining CapEx on an ongoing basis? Tony R. Thene - President, Chief Executive Officer & Director: Yeah. Well, we'll spend a little bit of money in this fiscal year on titanium powder facility. Not all of it. But that will be spent within the $120 million.

Right. So, on a sustaining basis or maintenance CapEx basis, do you have a general estimate for where you stand? Tony R. Thene - President, Chief Executive Officer & Director: Well, I mean, we don't give that specific guidance. I would say that over the last couple years we're around 80% to 85% of depreciation.

Okay. Thank you very much. Tony R. Thene - President, Chief Executive Officer & Director: Yes.

And your next question comes from the line of Josh Sullivan with Sterne CRT. Please proceed.

Good morning. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Josh.

Can you just clarify where you were caught off guard in September versus the guidance in July? I mean, obviously markets are in a tough position. What were the assumptions that led to that revision? And then more importantly, the current guidance, are you exposed to any of those similar type of venue mix? Tony R. Thene - President, Chief Executive Officer & Director: Well, I'm not sure exactly what you mean when you say caught off guard. What we try to do is march with the market on a daily, weekly, monthly basis. And we think it's appropriate for us to give updates if we think that's material, which is what we did. The market has moved significantly over the last six months. I think everybody would agree with that. When we saw that, we made note of it.

Okay. That's very nice. And then just given the decline in nickel pricing, I mean, is there any possibility of an inventory adjustment at some point or are the contracts mostly pass-through and that's not? Tony R. Thene - President, Chief Executive Officer & Director: Yeah. We don't anticipate any adjustment there.

Okay. Thank you. Tony R. Thene - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Phil Gibbs with KeyBanc Capital Markets. Please go ahead.

Good morning, Tony. Tony R. Thene - President, Chief Executive Officer & Director: Good morning, Phil.

I had a question on the cost reductions. Can you bridge here the $16.4 million? You're citing lower quarter-on-quarter. Any idea or sense how much of that is variable versus fixed cost reductions? Tony R. Thene - President, Chief Executive Officer & Director: Yeah. I'll let Tim take that question, Phil.

Thanks. Timothy Lain - Vice President, Controller & Chief Accounting Officer: Hi, Phil. This is Tim.

Hi, Tim. Timothy Lain - Vice President, Controller & Chief Accounting Officer: So – hi. We captured all that in that one bucket of cost, as you can see and as you noted. We said we were on the last call on the fourth quarter call that if you take that $30 million and you look at it on a quarterly run rate, I think we already said we had a pretty significant portion in Q4 and then we're kind of hitting our target here in Q1. So there is some incremental but not a lot on the fixed cost side from Q4 to Q1. And then whatever is left is, call it, variable.

Okay. That's helpful. And on the side of the – I think it was an insurance settlement, was that in your $41 million of profitability for SAO in Q1 or did that flow through separately? Timothy Lain - Vice President, Controller & Chief Accounting Officer: Yeah. As I mentioned, Phil, the $4 million was part of our operating income in Q1. And that was an insurance recovery. We had some extra costs last year related to that particular issue. So it's just part of the flow in operating income.

Okay. And just lastly from a housekeeping perspective, I think, we were looking for about $8 million in interest expense and the quarter came in at $6.6 million. Is that the rate we should be thinking about moving forward? Timothy Lain - Vice President, Controller & Chief Accounting Officer: That's going to move around a bit, Phil, based on some interest rate swaps and some other things. But I'd say that that could be fairly consistent, our run rate.

Okay. Thanks, Tim. Thanks, Tony. Tony R. Thene - President, Chief Executive Officer & Director: Thank you.

And that concludes the question-and-answer portion of today's call. Let me now turn it over to Mr. Mike Hajost for any closing remarks. Please go ahead, sir. Michael A. Hajost - Vice President & Treasurer: Thank you again for participating on today's call. We look forward to speaking with you again next quarter. Thank you and good-bye.