Good morning. My name is Heidi, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the AAM's Fourth Quarter and Full-Year 2016 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. As a reminder, today's call is being recorded. I would now like to turn the call over to Mr. Jason Parsons, Director of Investor Relations. Please go ahead, Mr. Parsons. Jason P. Parsons - American Axle & Manufacturing Holdings, Inc.: Thank you, and good morning, everyone. Thank you for joining us today and for your interest in AAM. Earlier this morning, we released our fourth quarter and full-year 2016 earnings announcement. You can access this release on our website, www.aam.com or through the PR Newswire services. A replay of this call will also be available beginning at 1:00 PM today through 11:59 PM, Eastern Time, February 17, by calling 855-859-2056, reservation number 87956021. Before we begin, I would like to remind everyone that the matters discussed in this call may contain comments and forward-looking statements subject to risks and uncertainties, which cannot be predicted or quantified, and which may cause future activities and results of operations to differ materially from those discussed. For additional information, we ask you refer to our filings with the Securities and Exchange Commission. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures as well as a reconciliation of these non-GAAP measures to GAAP financial information is available on our website. During today's call, we will make reference to AAM's pending acquisition of Metaldyne Performance Group or MPG. Today's call is not intended and does not constitute an offer to sell or…

Your first question comes from Rod Lache from Deutsche Bank. Please go ahead.

Good morning, everybody. I had a couple of things. I was hoping maybe you could just walk us through this gross profit increase on lower revenue, what some of the drivers were? Whether we should extrapolate from this level of SG&A? And I don't know if you've said this before, but the $20 million receipt which you pointed out in Detroit a couple of weeks ago for this capacity increase, what product is that for? Christopher John May - American Axle & Manufacturing Holdings, Inc.: Okay. Hey, Rod, why don't we – and so, let's talk with your gross profit walk first. In terms of a sequential kind of 2015 to 2016, certainly correct, we had GP of $160 million last year in 2015, ended up $176 million here in Q4 of 2016. Volume off just a slight bit, so a slight decline for volume and mix. We certainly have seen some benefits as it relates to our material and freight, in particular, freight related with lower fuel surcharges. But also, we had lower consumption of freight through some productivity initiatives. So, we saw some pure productivity as it relates to that element of our cost structure. We did have some benefits as it related to FX kind of on a year-over-year basis, primarily related to the peso. Roughly, call it, 40 basis points to 60 basis points' improvements in terms of debt measurement. And then, quite frankly, year-over-year, we had some good productivity in our facilities. I would call those as the major moves of our gross profit. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. And then Rod, this is David. With respect to the SG&A expense, I mean obviously we trended up a little bit year-over-year. But we're heavily focused on our Gen 2 EcoTrac disconnecting all wheel drive systems. We're also focused on our QUANTUM execution as it relates to revolutionary design to some of our beam and independent axle applications. So, it's a point in time as to where we are, but a continued focus on technology leadership. And then, with respect to your question about the $20 million on CapEx payment for the capacity program, it's on a crossover vehicle program, that's a global program in nature. I'm not at liberty to really speak to the customer at hand itself. But you're probably smart enough to figure that out.

Yeah. Thanks. I think you gave us enough on that. And just lastly, I was hoping you can maybe just talk a little bit about any thoughts on flexibility in the event of quarter adjustments or changes in tax policy that could affect your customers' footprint for pickup production. Any thoughts that you might have on how Axle may be able to respond whether you think that would require some kind of response from American Axle? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Let me first say that like many other suppliers right now, we're kind of in the wait-and-see mode at this point in time. I mean, the Trump administration used to clearly articulate and communicate their policies. The OEMs need to digest that, and clearly they've had some discussions with them. And they've got to determine their plant-loading strategies. Once they determine their plant-loading strategies, then we clearly can determine our plant-loading strategies from there. Our desire is to try to manufacture in close proximity to our customers' use locations. However, as you know, we're a strong U.S. manufacturer in addition to strong – in Mexico and other continents around the world. We have a flexible manufacturing footprint that we could relocate some of the work if need be, based on the policies and procedures that come out in the future. But at this time, we're not making any adjustments right now until such time as we understand the policies themselves and we understand how it's going to impact the decisions of the OEMs. But, we do have a manufacturing footprint here in the U.S. that's very strong, in our Three Rivers facility, as well as capability here in Detroit. And with MPG, we pick up 30 U.S. facilities. So, we'll be able to have flexibility in our workforce going forward in our locations.

Great. Thank you. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Thanks, Rod. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Thanks, Rod.

Your next question comes from Brian Johnson from Barclays. Please go ahead.

Yes. Just want to follow up on that last thing, around the (29:13) recognizing it's preliminary. But could you give us a sense of where the inputs to your Silao, Guanajuato facilities are coming from in terms of steel, cast and forged products? And a couple of things. One, I am just not clear, is it raw SPQ (29:32) or is it forged and cast products coming in? If it's forged and then cast products, are those from Mexico or from the U.S.? And I guess, three, as you think through the integration, is there an opportunity to export more value into that Mexican facility by using the MPG U.S. footprint to send components for final assembly and/or machining down to Mexico? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Brian, excellent point. And as I just said to Rod, it's – clearly, we have a very diverse manufacturing footprint especially here in North America with both U.S. and Mexican operations. We are exporting some products from the U.S. today forging as well as casting as far as being sent down to Mexico. At the same time, we are manufacturing some forging ourselves in Mexico. But predominantly, most of the steel is being consumed out of the U.S. to support that. And then, there are some castings that are produced in the U.S. that's sent down, but also other castings that are made in Mexico. So, this is where we'll demonstrate the flexibility of our global footprint as to how we load our plants going forward based on the OEM's decisions and the Trump administration policy. So, Chris, any other comments you might want to make? Christopher John May - American Axle & Manufacturing Holdings, Inc.: Yeah. And another point to that, Brian, is, of course, as we get into a lot of these details, and I'm sure others will have questions on the call, but at the end of the day when it comes to these rules, details will matter. You're asking about the content in terms of our production in Mexico. I would tell you, a high component of – or high value of our production in Mexico is actually sourced on incoming products from the U.S. in excess of 50% of our content. So, right to David's point, we'll have the flexibility and we'll have to follow through the details on that.

Yeah. That was going to be my follow-on question. I guess the kind of second question, if it were to come – some of it come back north to Three Rivers or elsewhere kind of – would there – would it just be one-for-one machines moving north, like in the south in the past? Or would there need to be some incremental CapEx for either facilities or for a higher level of automation? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. In most cases, we'd relocate appropriate equipment, but we would also evaluate what we need to do from a productivity and automation standpoint as well to maintain our cost competitiveness in the marketplace. So, again, will be determined on the individual program and the customer themselves and their desire as well as ours, but we've got the flexibility to move our equipments as well as we'll focus on the productivity in automation and the enhancement of the product going forward.

Okay. Thank you. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Thanks, Brian. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Thanks, Brian.

Your next question comes from Joe Spak from RBC Capital Markets. Please go ahead.

Thanks. Good morning. Just, Chris, I was wondering if you could walk through some of the puts and takes to the margin guidance for next year. Specifically, if the peso stayed at current levels, how much of a tailwind do you think that would be? And then similarly, you're pointing to higher volume, but as David went through, a lot of launches. So, is volume actually a margin drag for you, given the mix of that volume in 2017? Christopher John May - American Axle & Manufacturing Holdings, Inc.: I'll answer your questions in reverse. The first answer would be no, it is not a margin drag. So, if we think about where we ended this year, about $620 million – we'll talk on an EBITDA basis, right, we will get a pickup of some contribution margin and EBITDA margin on that new business. Of course, we'll add some takes against that (33:17) continued annual price-downs. I think roughly 1% of sales is a rule of thumb. And then, you asked about the peso at current levels, well, that would be great to enjoy at the current levels. We are on a rolling hedge program, so we typically wouldn't reach this spot rate on an excelling – on a weakening basis of the peso. But that said, we will have some tailwind associated with the peso, I think, 20 to 40 basis points over the course the year based on our hedging programs. And then, of course, we had year-over-year productivity. Again, some of the other elements I mentioned (33:46).

Okay. Great. That's helpful. And then, in the sense that you've been able to sort of spend more time with MPG, it sounds like the integration teams are up and running. Is there anything more you can give in terms of confidence around the synergies, maybe any surprises that came up or opportunities? It sounds like one of the things you were thinking about is maybe some opportunities to help deal with some of the tax law changes. But any more color you can provide there would be helpful. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Joe, this is David. We're highly confident that we can deliver on the synergistic value that we've communicated, that $100 million to $120 million. I've had the opportunity to personally travel and view a lot of their facilities globally around the world. I've been very favorably impressed of what I've seen. There are opportunities for best practices to be shared between our organization and their organization that will drive further productivity and maybe synergistic opportunities. But I'm very pleased with what I've seen. The teams are very focused from an operational standpoint as well as from the corporate standpoint of putting together the optimized organization, looking at the appropriate opportunities when it comes to the procurement side: direct, indirect and in-sourcing. But we're very confident we can deliver on this synergistic values we've communicated. Christopher John May - American Axle & Manufacturing Holdings, Inc.: And Joe, you'd also asked about taxes, and I think we've talked about previously that we saw some cash tax synergies with the combined entities, and of course, that's a current tax loss. We would evaluate whatever comes our way in terms of those changes, but big picture, if a lower rate comes in, that's even better.

Okay. Thanks a lot, guys. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Thanks, Joe.

Your next question comes from Ryan Brinkman from JPMorgan. Please go ahead.

Hi, good morning. This is Samik on behalf of Ryan Brinkman. I just first want to start on in South America, and if you could give us an update on the production volumes on the platforms you support there, I believe GM and Volkswagen. Are you seeing an improvement in the outlook for production volumes there? We're hearing that the market is starting to improve, shows some signs of recovery. So, what are you probably seeing there on the ground? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. As far as our business, Samik, we think we reached the bottom. In regards to Brazil, we're actually seeing some favorable schedules coming back. I wouldn't say anything that's material in nature, so don't read too much into it. But at the same time, our team has done an outstanding job restructuring, resizing, and recovering that business in a very difficult situation as we're all faced with in South America right now. But we have no other news really to report other than the fact that our teams operating as best they can in a very difficult environment. But we see schedules starting to get a little bit stronger than what they have historically had been here lately.

Okay. Okay. Right. And just as a follow-up more on the research and development expenses you had. They seemed – they've picked up from 2015 to 2016, how should we think about 2017? I think in 2016 it was like 3.5% of sales, how should we think about 2017? And then, more longer term, as you sort of help OEMs pursue some of the electrification of vehicles with your advanced technologies, how should we think about longer term where your research and development expenses should be? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah, I think you should look at 2017 as being similar to 2016. Clearly, as I just mentioned to you, we're going through a significant period right now as it relates to preparing for new business launches to support replacement as well as new business. We're also working on some extensive advanced development activity in our Gen 2 EcoTrac Disconnecting All Wheel Drive, our QUANTUM work in a number of other technology initiatives that we have going on. Again, we're committed to be a technology leader in the segments that we serve, and we're putting our money behind our mouth. And we'll deliver on favorable results that will lead to new business, to profitable business. But to answer your question, it should be similar to – year-over-year.

Okay, got it. Great. Thank you. Thanks.

Your next question comes from John Murphy from Bank of America Merrill Lynch. Please go ahead.

Good morning, guys. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Good morning, John. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Good morning, John.

Just a first question on the cadence of GM's truck productions through the course of the year, I mean, they've kind of highlighted that they're going to take some downtime for re-tooling for the next truck in the second half of the year. I'm just curious how that is going to impact the flow of your earnings through the course of the year and what kind of costs you might incur for that process? Christopher John May - American Axle & Manufacturing Holdings, Inc.: In terms of production, we see it very seasonal to where we saw our 2016. We see our schedules continue to remain strong and healthy. And I would not spike out any particular product launch cost associated with the transition. We'll have a little bit, but we have some of that going on every year. Michael K. Simonte - American Axle & Manufacturing Holdings, Inc.: Hey, John. This is Mike. The other thing that's going to happen in the second half of this year is we'd certainly believe and hope it will be a merged company at that point in time, and this truck program while still vital and important to our company, you won't notice the movements, the quarter-by-quarter movements quite as much anymore because we'll have a whole host to new powertrain and transmission technology products from MPG's side, launching and affecting our earnings as well. So, our sort of quarterly cadence, we'll start tracking the market much more closely, particularly here in North America.

Okay. But specifically, you guys are not seeing this volume downtime that they're talking about in the second half of the year in the schedules you're seeing? Michael K. Simonte - American Axle & Manufacturing Holdings, Inc.: There's downtime reflected in the schedules, John. But remember that downtime will be localized in particular facilities. Other facilities will be able to pick up capacity, work weekends, run some overtime. There's a little bit of additional capacity contemplated in GM's planning for this program, as you know. So, I don't think you'll see the quarter-by-quarter cadence be all that significant

Okay. That's incredibly... David C. Dauch - American Axle & Manufacturing Holdings, Inc.: And, John, again, we've forecasted the K2XX volume is about 1.25 million units this year. So, to Mike's point, is we may see some ups and downs based on the different assembly plants, but overall, we're still seeing a very strong cadence for the K2XX program.

Yeah. Okay, that's helpful. And then, just a second question, on Mexico, I mean when you guys locate capacity or have located capacity down in Silao and Guanajuato, I mean when you make those decisions, what is the driving force behind that decision? Is it purely labor cost or is there colocation with customer facilities? I mean, it seems like there's a lot of factors that go on here, and if you could just generally say if you had to move those plants back north on a like-for-like basis, I mean, would it really just be labor costs that would be higher? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Again, John, the predominant thing that helps us make our decision is we want to try to produce our product in the country that the product is consumed in and used in. Clearly, we tried to do that in concert with our customers there. They prefer a greater level of localization as well because it mitigates risk in the supply chain. So, that's a key element in regards to our sourcing decisions. Clearly, we have to look at productivity and throughput and overall costs, but we can balance that no matter where we operate from a geographic standpoint. So, yeah, clearly there's a difference between the Mexican labor rate and the U.S. labor rate. So, if we were able to require to bring certain things back to the U.S., then we would look at what we need to do from an automation and productivity standpoint, and balance things accordingly. Christopher John May - American Axle & Manufacturing Holdings, Inc.: And then also, we look at it from a full cost basis, John, right. So, things like logistics and energy costs also come into play and are not always the lowest cost in Mexico. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Christopher John May - American Axle & Manufacturing Holdings, Inc.: So, we have to balance those out.

So – but the key driving force is localizing with your customer as opposed to cost for you? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Yeah. Absolutely.

Great. Thank you very much. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Thanks, John.

Your next question comes from Brett Hoselton from KeyBanc. Please go ahead.

Good morning, gentlemen. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Hi, Brett. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Good morning, Brett. Michael K. Simonte - American Axle & Manufacturing Holdings, Inc.: Good morning, Brett.

Wanted to ask you about your backlog, and two things here. One, you've talked about margins being a little bit lower on your replacement business versus the K2XX business. Can you possibly give us some indication of what the order of magnitude is on the margin front? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. Brett, this is David. I mean what we've communicated in the past is that contribution margins on our full-size truck program operated on that 30% level. And we said, as we've brought new business on, passenger car or crossover vehicle or other type of work, they'd probably be in that 20% to 25% range. But as we also communicated in the last call and at the Deutsche conference, we're trending at the higher end of that range. So, therefore, the material impact is not that great from a margin standpoint. And then, we're working on a number of cost reduction initiatives internally within organization in order to addressing that gap that might exist, so – but we're trending at the high end of the range that we communicated.

Okay. Thank you, David. And then, as we look out beyond 2019, I know we're early, you don't necessarily have your business necessarily booked out beyond that timeframe. But I know that you're also probably looking at some businesses at this point in time and have a feel for how much you'd might likely win. But as we kind of think about $375 million, $250 million, $250 million, is that kind of a reasonable range or run rate to expect on that 2020 timeframe and beyond? Or is that likely to go up or down? Any general sense you have at this point? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah. No. We typically – we're reporting on over $1 billion in new and incremental opportunity. Our hit rate is in that 25% to 30% rate area. Most of what we're reporting on right would favorably impact 2019, 2020, 2021 period of time. A little bit maybe in 2018, but more 2019 through 2021. I'd actually expect the outer numbers to grow over time. And then, obviously with the acquisition of MPG going forward, we'll have to factor that into our backlog and factor that into our quoting opportunities. But overall, I'd expect things to grow in the future.

Okay. Thank you very much, gentlemen. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Yeah, thanks, Brett. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Thanks, Brett.

Your last question comes from Itay Michaeli from Citi. Please go ahead.

Great. Thanks. Good morning, everyone. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Good morning, Itay. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Hey, Itay.

So, just a couple – just questions on the 2017 outlook. I'm hoping you can just frame the impact of commodity costs on the P&L as well as any cost savings from some of the restructuring you've done here in the fourth quarter. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Yeah. As it relates to the commodity things (44:09), Itay, we have, as I mentioned earlier, about probably 20 to 40 basis points from the tailwind improvement as it relates to the FX side of the house, most of that driven by the peso. But we also have offsets in under currencies that kind of work against that a little bit. I would frame that in terms of – from an FX standpoint, I don't see a lot more tailwind as it relates to fuel surcharges and freight related, so we should be relatively flat year-over-year in terms of that input.

Great. And then, the cost savings from the restructuring? Christopher John May - American Axle & Manufacturing Holdings, Inc.: Yeah. So, we began that program in earnest in the fourth quarter of 2016, and you saw, for example, our SG&A was a little bit elevated in 2016. I would expect that to start to trim down to moderate into that mid-7% range versus where its run rate was in 2016. That's probably going to be one of the key drivers to that. And we should see some enhanced productivity through our plants in terms of some of its other indirect inputs as part of that process. And that's all been included in our guidance that we have shared with you.

That's very helpful, Chris. And then, just two quick follow-ups. First, do you have the year-end pension number in terms of the underfunding for the company, as well as anything to think about in terms of the cadence of your incoming backlog in 2017? Christopher John May - American Axle & Manufacturing Holdings, Inc.: Yeah. As it relates to the pension, we're about $100 million liability, $100-million liability, and you'll see all the details today. We'll file the K at the end of the business day, but it's about $100 million. It increased slightly due to a slow – lower discount rate.

Okay. Great. And then, just on the back of it, anything to think about in terms of the cadence of the new business coming in this year or is it fairly balanced? David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Fairly balanced, relatively flat.

Great. That's very helpful. Thanks so much, guys. David C. Dauch - American Axle & Manufacturing Holdings, Inc.: Okay. Thank you. Christopher John May - American Axle & Manufacturing Holdings, Inc.: Okay, Itay, thank you. Jason P. Parsons - American Axle & Manufacturing Holdings, Inc.: Thank you, Itay. And we thank all of you who participated on this call and appreciate your interest in AAM. We'd certainly look forward to talking with you in the future.

This concludes today's conference call. You may now disconnect.