Welcome to the Flowserve fourth quarter 2014 earnings conference call. My name is Paulette, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to Jay Roueche, Vice President of Investor Relations and Treasurer. You may begin. John E. Roueche, III - Treasurer & Vice President-Investor Relations: Thank you, operator, and good morning, everyone. We appreciate you joining us today to discuss Flowserve Corporation's 2014 fourth quarter and full-year financial results, which we announced yesterday afternoon in our press release and Form 10-K filing. Joining me on the call this morning are: Mark Blinn, Flowserve's President and Chief Executive Officer; Tom Pajonas, Executive Vice President and Chief Operating Officer; and Mike Taff, Senior Vice President and Chief Financial Officer. Following our prepared comments, we will open the call up to your questions, and instructions will be given at that time. Before turning the call over to Mark, let me remind you that this event is being webcast and a slide presentation is available. An audio replay will also be accessible approximately two hours following the conclusion of this live call. Please also be aware that this call and the associated earnings materials contain forward-looking statements that are based upon forecasts, expectations, and other information available to management as of February 18, 2015. These statements involve numerous risks and uncertainties, including many that are beyond the company's control. And, except to the extent required by applicable law, Flowserve undertakes no obligation and disclaims any duty to update any of today's forward-looking statements. We encourage you to fully review our Safe Harbor disclosures contained in yesterday's press release, slide presentation, and our Form 10-K filing as well as other filings with the Securities and Exchange Commission for additional information. All of these documents, including the live webcast and replay, are accessible on our website at Flowserve.com in the Investor Relations section. I would now like to turn the call over to Mark Blinn, Flowserve's President and Chief Executive Officer, for his prepared comments.

Thank you, Jay, and good morning, everyone. Overall, we delivered strong operating and financial results for the fourth quarter, which ensured a solid full year 2014. We operated at a very high level throughout the year, and I am pleased that our employees have strengthened their customer focus and demonstrated commitment to raising the bar through our Performance Culture initiative. These efforts are delivering value for our customers and ultimately for our shareholders. Equally important, I believe our actions in 2014 will better position the company for 2015 and beyond. Even though Flowserve is currently operating at its highest level of performance, there remains heightened market uncertainty following the rapid decline in oil and headwinds from the strengthening U.S. dollar. While we can't influence the markets, we are focusing on what is within our control, namely, continuing to deliver for our customers, operational excellence, tight cost control, pursuing disciplined investments to drive sustainable long-term growth, and returning capital to our shareholders. This formula served us well in the past market cycles, and we believe it is the logical course now. Additionally, we expect this current market environment will provide us additional opportunities to grow our market leadership from a position of strength. With the strong results and improvements that we've delivered over the past few years, we have full confidence in Flowserve's operating platform. In light of recent commodity price movements, I believe it's important to clarify our exposure to oil and gas. In 2014, what we label oil and gas represented about 43% of our consolidated bookings. Our largest oil and gas exposures are in the mid and downstream markets, accounting for roughly 75% to 80% of our total oil and gas exposure. Even more relevant, the over 80% of our company's revenue is aftermarket in what we call…

Thanks, Mark, and good morning, everyone. I'm also very proud of the performance we delivered in 2014. We continued to strengthen our operational foundation, building upon our long-term strategy to increase our operating excellence, efficiency, and flexibility. As Mark indicated, the Flowserve engine is operating at a very high level. This is a clear testament to our employees and their embrace of our strategic vision, execution focus, and service to our customers. We were very pleased with our ability to flex the business across Flowserve's diverse end market and regional exposures while tightly controlling our cost structure. Although the larger project work did not materialize during 2014, which limited our revenue growth, we still delivered meaningful margin improvement at both the gross and operating line, largely just from the run-rate business and aftermarket franchise. In fact, we reached the top end of our three-year margin target in spite of the continued project delays and increased macro uncertainty in some of our markets. The operational performance we delivered truly highlights the competitive advantage that exists in Flowserve with its diverse end markets and geographies. While pleased with the operating levels we have obtained, I am also confident that potential for further improvement remains. Our culture of performance positions us to capture additional identified opportunities through quality initiatives, project management, supply chain, low-cost sourcing, and new product introductions, to name a few. Our continued effort will enhance our performance, better serve our customers, drive profitable organic and inorganic growth, and ultimately deliver long-term value to our shareholders. Over the last three years, we have made investments and progress to increase our operating platforms, low-cost manufacturing capability and flexibility. This effort results in an improved ability to shift with the changing activity levels within our served regions and end markets. Latin America in…

Thank you, Mike. On behalf of the Board, the senior management team, our employees, shareholders, and other Flowserve constituencies, we very much thank you for your service with the company. You're leaving the finance organization in better shape than you found it, and we very much appreciate the finance leadership team you have assembled. Our leadership team is confident they will rise to the occasion as we patiently search for our new CFO. Our standards will be high, looking an operationally focused financial leader who has bandwidth for further career progression. It has been a pleasure working with you, and we wish you all the best in the times ahead. Operator, we will now open up the call to any questions.

Thank you. And our first question comes from Charlie Brady from BMO Capital Markets. Please go ahead.

Hi, thanks. Good morning, guys.

Good morning, Charlie.

Mike, sorry to see you go, but I totally understand the reasons why you're doing that. Michael S. Taff - Chief Financial Officer & Senior Vice President: Thank you.

A quick question on IPD and the bookings that were down. I know in the slides, you talked about some of the end markets. But maybe you can go into a little more detail on what you're seeing just within industrial products. And on the flip side of that, obviously the margins there were pretty strong. Can you talked about what drove the margin performance there, anything one-off that pushed it higher that may not in the near term?

So, Charlie, just some of you folks may have had difficulty hearing that. The question was around IPD bookings Q4-over-Q4 and then the margin improvement. So if you look year over year, it was really the compare to 2013. We had some smaller projects that booked in the IPD segment in the oil and gas in the fourth quarter of 2013. And if you look at the bookings quarter by quarter, a small amount like that can have an impact. It's better to look at the full-year trend. Remember, as we came into 2014, we said good progress on the margin improvement. Now we need to start working on growth, and I think the SIHI acquisition is a great example of that. As to the margins, the primary impact is what we set out a number of years ago is to improve the business, which has been a priority. In fact, it's probably fair to say that's been a priority for the last three years at Flowserve is to improve the platform, and in fact you saw that. There was a little more aftermarket. And also keep in mind with the Innomag acquisition, we had purchase price accounting in Q4 2013. That was a much smaller impact in the improvement. But in fairness on the compares, you need to consider that as well.

Thanks, and just one quick follow-up. In relation to Brazil specifically, are you guys seeing any customer issues down there? There was another company out today talking about some E&Cs have gone bankrupt. They've taken an accounts receivable hit. I was just wondering if you guys have looked at that. And within the backlog, is there anything in it that's maybe at risk because of what's going down in Brazil specifically with what the government is doing down there with anti-corruption? Thanks.

Again, we're still optimistic on that region in the world long term. Keep in mind, they've got quite a few reserves and they do need to monetize them, and we're there to support them. But in the short term, we do continue to monitor that. And we haven't had a material impact in our financial statements, but that's certainly something that's ongoing down there. As Tom talked about, we have that from time to time. You see that in Latin America. There can be impacts down there, but we are able to shift. You do have – while you have challenges there, you have strength in Mexico. But we certainly monitor that very, very carefully and our exposures as well, and I haven't seen anything impact yet, but we're keeping an eye on it.

And I would add to that, Mark, that obviously Petrobras is going through a reassessment of some of their projects based on some of the issues that they've had with the FTCA, which has been publicized in many of the papers.

Thanks.

Our next question comes from Scott Graham from Jefferies. Please go ahead.

Hey, good morning.

Good morning, Scott.

Good morning, Scott.

Mike, the best of luck to you. You're definitely one of the good guys out there. Michael S. Taff - Chief Financial Officer & Senior Vice President: Thank you.

We agree with you.

I'm sure. I'm just wanted to ask you, Mark, about the bookings. You've indicated that December was the strongest month of the quarter, which obviously for a lot of us gives us the wow, why's. Just can you talk about what areas of the company was stronger in December? And then maybe as we turn the calendar, if I could attach this question onto that, what do the oil and gas bookings look like now halfway through the first quarter?

We don't give intra-quarter indications. We'll wait until things pan out because, as you saw in the last quarter, we saw a lot of activity at the end, in the last month. This is similar in what we've talked about before. By that time we get to the bidding phase of a lot of these projects, typically there has been a substantial amount of investment. And so as that activity was working through last summer, it continued to follow through. The thing that we need to keep an eye on, Scott, going forward is some of the projects. And you've already seen some in the news that aren't at the bidding phase but are still in the conception phase or in the early phases that they may say hey, look, we've going to delay this, or you saw the big project in the Middle East, the LNG one, where they said they were going to cancel it. So it's usually the longer lead times that we tend to take a look at. So that's in effect what you saw is they don't turn these projects on a dime, especially when it comes to bidding our equipment because there has been a lot of investment at that point in time. Also, I think it's fair for everybody to keep in mind. Here we are on the other side of discussion, where there was frustration over the last couple years as when are the big projects coming, when are the big projects coming. The fact is we haven't been real reliant on these big projects for a couple of years. We saw one I think back in 2012. In the third quarter, we saw a couple of other smaller ones. So as you look forward, we haven't been reliant. We were looking for them to come. What does this environment mean? It means it's going to remain competitive in pricing. I do think as suppliers look out there, they're going to try to get visibility as we are, and it could put some pressure on pricing on some of these projects as well. They'll certainly continue to take a long-term view, but that's the lay of the land. So what that indicates in December is, as it is in our industry, when there's even an abrupt change like that, it's not that everybody stops in their tracks because there has been so much. There are reasons these facilities are getting built. There are usually secular drivers that are behind them, and they follow through on their commitment. What comes into play are projects that are on the horizon.

Okay, fair enough. So then essentially – and I want to read this carefully. You're essentially saying that your first half is much more difficult comparables due to the: A), FX environment; and B), the consternation that you're expecting in the first half surrounding the decline in oil prices. So what I think I hear you saying, without you having said it specifically, is that you are concerned about oil and gas bookings in the first half of the year.

It's some that are on the project side. It's something we're definitely going to monitor on a big portion of our business. You're going to have your seasonality trends around maintenance, as for example in the United States they start repurposing some of the facilities for different types of gas during the course of the year, some of the brownfield opportunities. Keep in mind, refiners are starting to see an advantage right now on the downstream side because you have low oil. And if you think about Midwest refiners, they have an opportunity because of the limited transportation, and you can't export out of United States, to really make good profit on refined product at this point in time. The other thing to consider, Scott, is there are projects that are still occurring in the Middle East and various parts of the world that are ongoing. And these are clean fuel requirements. For example, we talked about before; in certain parts of the Middle East, they supply into regions of the world that now require reduced sulfur content, so they have to get these facilities in place. The message here is certainly short term, people can defer some spend. We saw that happen in times past. On the margin, some of these complex projects, like LNG is a fairly complex project. They may say look, we need to see how the various constituencies of oil are going to play out over a period of time. Let's reevaluate this. But the core processes, the core refinery, the core production where it makes sense and it's financially viable will continue. So the world's not going to shut off the oil and gas spigot. So hopefully that's helpful. But we have seen in the past and this is our commentary; everybody can pause a little bit short term. A quarter or two in our industry is okay. These are long-term projects.

Okay, I guess what I was just trying to get out was that the full-year guidance did contemplate some type of change in the bidding environment and the booking environment for oil and gas, and I think I'm hearing you say that. So...

The guidance was based on what we knew in January. The variables are – and if you could tell me where currency is going to go, you and I could do very well on currency trades. But it is what we saw at that point in time. And if you think about it since January, if anything, oil has stabilized a little bit. But it certainly did consider that; it considered what we've experienced before over the short term. But it also considered a couple other things. We have a higher backlog coming into this year than we did last year. And that is intact and we know we're going to deliver that over the period of time. It also considered that we have a good program in place around driving our aftermarket growth. It also considered factors that we have been working a lot on our sales organization to get additional penetration in the business. We have plans. We're not going to sit still and necessarily just wait and see what the market does. We're going to focus on what's in our control, and that is further penetration in the sales organization. We've been developing products in R&D and bringing them to market that have driven revenue growth. We've been growing our aftermarket business. We're looking at all channels to market in terms of how we can enhance them. So our guidance does include that because we have a lot of plans in place that we intend to execute this year.

And our next question comes from Andrew Kaplowitz from Barclays. Please go ahead.

Guys, good morning. It's Alan Fleming in for Andy today. How are you?

Doing fine, thanks.

Mark, maybe I can ask you a question more broadly on backlog. You guys did a nice job growing backlog in 2014 while I think, like you said, there was very little contribution from the large OE project-based business. And then I think you touched on December being the strongest month for you in the quarter. So maybe you can just talk about your confidence broadly in being able to grow overall backlog in 2015. And is that something that you think you can still achieve on the strength of the aftermarket and the run-rate business?

Where we have confidence is on what I just talked about, and that is to continue to penetrate on the aftermarket side. One thing to always keep in mind with aftermarket, although we haven't seen a lot of projects, is there is a small component that is tied to projects that are called commissioned spares. But in general and you look at our underlying aftermarket trends, and it's really around strategic initiatives that we have, the other aspects I mentioned earlier around really the work we're doing on our sales organization that just started a year ago in terms of how do we better penetrate markets; some of the initiatives we have that we've talked about in the chemical industry, in the power industry as well. So those aspects give me confidence. What I will tell you what we're uncertain of is where some of these project opportunities are going to pan out over a period of time. Again, we haven't been highly reliant on them, but they are out there and we do plan our business around them. That's the area where as you look over the horizon, we need to get better visibility into, especially the ones that, as I talked about, are probably more costly. And the returns on investment may be a little bit longer in those. But there are still plenty that are right down in the middle of the alley. What I talked about in the Middle East, if you actually heard, in Saudi they talked about their commitment to investment in the Middle East. And I think that's a message for everybody is I don't think anybody views that demand is going to be significantly destroyed over the next five to 10 years. As a matter of fact, I think the views are that demand is going to continue to grow, and supply is going to have to respond to it. So people think about that because you can't turn a project on a dime. If you decide you want to put it in place, you're not going to have it in place nine months from now or a year. These projects take many, many years.

Okay, that's helpful. And then maybe I can follow up with a question about your mix because I looked at your slide deck. And I see that in recent years, the mix has trended something like 10% to 15% of the OE business, whereas traditionally I think it's been closer to 20%. So will that dramatically change in 2015 as you think about it? Will it actually maybe even – will that 10% to 15% go down a little bit as you wait for some of these larger projects to hit? Maybe you can just talk about the mix as you guys are expecting it to play out in 2015.

Forecasting mix wouldn't make any sense at all. That will depend on the markets, our presence, the aftermarket. When we look at a project, we think about the long-term opportunities around that project and our ability to deliver. I think the important thing for you to consider relative to a couple of years ago is we have a stronger operating platform that we think we can be very competitive on projects. So what we're going to do is be opportunistic. We don't want to govern any of the mix. We don't want to constrain any of the mix. What we want to do is be balanced and grow this business profitably. It wouldn't make any sense to forecast mix at all.

And our next question comes from Nathan Jones from Stifel. Please go ahead. Nathan H. Jones - Stifel, Nicolaus & Co., Inc.: Good morning, everyone.

Hi, Nathan. Nathan H. Jones - Stifel, Nicolaus & Co., Inc.: If we could, just talk a little bit about the project work on the Gulf Coast that you're waiting for. You talked about the six ethylene projects that are currently under construction. They must be getting closer and closer to being bid out to I guess the pump guys first. Can you talk about the expectation that you have on when those are going to be let out?

So the question was what's the expectation on the Gulf Coast projects. I would say a couple things. There have been about 12 ethane projects. About six are currently under construction and we've been participating in those. And there are six more that are under various stages from feasibility to permitting, so those are yet to come from an OE standpoint. And I would say the second thing is we've been particularly strong in the Gulf Coast and southern U.S. in our aftermarket business both on the oil and gas and chemicals, so that's come through very nicely for us. So I would say those are the two primary drivers in that region. Nathan H. Jones - Stifel, Nicolaus & Co., Inc.: Could you then talk about, just for everyone's education a little bit, the cycle that progresses after those ethylene projects with the chemical plants that need to be built after that, and how long that cycle lasts for you guys?

Ethane is one thing in the stream. It starts obviously with oil and natural gas, and then it's broken down into different constituents, of which ethane is one of those. And then it goes on to further processing. So I would say we have further opportunities for further processing on the chemical side of the business. You've also seen us mention the fact that on the ethane that, for the most part, the Europeans use naphtha, which is their process that they have going into their chemical plants. We even see a potential for exporting that and them turning some of their plants over to U.S.-based ethane. So there is a continuing process for downstream further refinements of these chemicals. Nathan H. Jones - Stifel, Nicolaus & Co., Inc.: And just one question on margins. You did comment that 35% gross margin was better than even your expectations for the year. Is that a level that you think is sustainable long term, taking out the noise I guess in the near-term from oil prices, something that you think can expand or something that you think is not sustainable?

So if you look at the base operations of the business, what is primarily reflected in that gross line is the operational improvement that you've certainly seen in the business. And, Nathan, you've got to take mix aside because project work tends to have lower gross margins but ultimately benefit, so mix neutral. And you're right around the noise in the pricing environment and everything. But underlying that is an improvement in the operations. And the reason we think it's sustainable is because we still have some opportunity to improve it. I would tell you we're about 60% through our five-year journey, about three years into bringing this company to the level of performance that it needs to be and that we can see. I also – I think we've talked about from time to time. We have some under-absorption in our factories that we're going to start to get at as well. You do that after you get the operations up and running and we're going to look at that going forward as well. So those are just two examples of things that we think we're going to focus on to drive overall margin improvement. And if you look at margins overall in the business, we got a little benefit from fixed cost leverage last year in the SG&A line. So as we drive our growth initiatives over the next couple of years, that should benefit for us.

One thing I would add to Mark on the absorption side, we've had a whole program on the lead center and the secondary manufacturing center, which is all about shifting our manufacturing base around the world to low-cost centers. So we now have in place, as you've seen previously, a strong Indian component in our Coimbatore facility. We have Santa Clara in Mexico as a core. We have India and we're beefing up – excuse me, we have China. We're beefing up China further with further capital spend, as Mike mentioned, on the valve side. So we've got a good low-cost sourcing platform. And now we're moving with LPO/SPO strategy those products around the world, which should bode well for the future.

So that's three examples of why we have confidence.

And our next question comes from Andrew Obin from Bank of America Merrill Lynch. Please go ahead.

Yes, guys, congratulations on a great quarter and sad to see Mike go. Michael S. Taff - Chief Financial Officer & Senior Vice President: Thank you.

Thank you.

Thank you for all the help over the years.

Mike is a good executive and a good friend.

Just a question on market share and pricing dynamics because what we've been hearing this quarter from some of your competitors is their numbers have not been as good as yours. People are talking about pricing pressure, some talking about repricing of the MRO. Can you just describe what it is you are seeing in terms of your tier versus maybe people who are not as strong? What are you hearing about customers, about pricing, the business model? And what are you seeing in terms of market share?

I think it's tough to calculate share because share gain and loss is determined on every project that you bid relative to a competitor, and we win some and we lose some. But as my comments earlier, what I will tell you is the industry always looks at its capacity over the long term and with the uncertainty that I've talked about over the horizon. So we see the activity levels over the short term, then they'll look at their capacity, their load over a period of time, and they can do a number of things. They'll either book their capacity to make sure that it is absorbed, or they may look at their capacity and say can we rationalize some of it, or they'll do both. So it's really going to depend on each company out there over that period of time. Obviously, we're going to look at both, so I think from that standpoint. But also another thing to keep in mind around these projects is there are technical capabilities, delivery times, quality. All these things that we talk about still factor in. I will tell you for the most part customers value that a great deal. The one exception I've always pointed out is in the Middle East. A lot of it really does come down to price. But increasingly, they're getting focused on your ability to respond, respond with quality, and be able to support it over a period of time. So what I don't want to suggest as you look at project opportunities is that all things are equal. I've always maintained we have good competitors out there with certainly good capabilities. But increasingly these are things that customers are looking at when they let out opportunities. Because a customer could save X% on the price of the equipment but if it's not on time, if it's not quality and you can't support it, it becomes far more expensive than your savings.

So let me ask you another question. I think it's no secret we're quite a bit more bearish on the end market than you guys are. But the question I have, given your exposure to energy, and that is your core business, if things weaken beyond what you guys expect, you do have obviously, given your performance in the previous downturn, I think your cash flows will remain quite robust. Would you consider investing more in energy to take advantage to bulk up your business during a downturn? I'm talking about M&A.

Absolutely, if it makes sense for our shareholders, absolutely we would because nobody on this phone call or any other phone call believes energy is going away. And again, it's interesting how these conversations change so quickly. We were apologizing for not having enough exposure to upstream, and now all of a sudden nobody is interested in it. We are very interested in it because we think long term that's going to return a tremendous amount of value. So your point is right. These are times, and let's go back to our statement. In our tone more than anything, what you hear in the confidence is the strength of our platform, what we've been able to accomplish, the performance level, and then we'll focus on what's within our control. And to your point, that is something that is certainly within our control. And it gives us the opportunity with a strong platform, a strong balance sheet, we're delivering, we're returning value to our shareholders. So we don't have to trade things off. We can play offense in this type of environment, and one of those components of offense is going to be the inorganic opportunities.

And our next question comes from Steven Fisher from UBS. Please go ahead.

Great, thanks. Good morning.

Good morning.

Mike, best wishes certainly. And can you maybe clarify the FX impact? I know you said the current rates would have a bigger than $0.20 headwind. Can you maybe just give us some order of magnitude of that impact if the current rates hold? And are you planning on any kind of offset to those incremental headwinds if they do materialize? Michael S. Taff - Chief Financial Officer & Senior Vice President: I'll jump in real quick. Roughly, you can do the math. Last year's average currency versus the guidance range, it would be another $0.08 to $0.10 of impact, absent any change. But it's important to take a step back because there has been a lot of focus with multinationals around currency impact. And it is certainly out there, but there are other sides to that equation. If you think about it, for example, the acquisition we just made in SIHI, our German manufacturing now there has become much more competitive. These things will sort themselves out over time. So currency tends to have a short-term impact, and folks that are focused on the short term will certainly be aware of that. But long term what it does do is it balances out our manufacturing and certainly makes it more competitive. I just want to remind everybody of that because I don't want everybody to get short-term focus. There's a lot of noise in that around the world. But it does give multinationals the opportunity to leverage some of their now lower cost capacity with very competitive products out in the global arena.

Great, that's helpful. And then, Tom, I know you said it's early days on the SIHI integration. But I was wondering if you're seeing any opportunities to reduce that $0.25 dilution impact this year

No, this is Mark. We're still working through all that. A lot of that is purchase price accounting. But also there are some cost synergies we're going to bring to it as well. If you think about it, I think I mentioned on the call and it was early days, but they have some good capacity that we're actually going to be able to leverage. So when you looked at our acquisition multiple and our forward multiple, a lot of that was the opportunity to take some cost synergies. And there's a short-term cost to that but a strong long-term benefit.

Okay, great, thanks very much.

Sure.

Our next question comes from Chase Jacobson from William Blair. Please go ahead. Chase A. Jacobson - William Blair & Co. LLC: Hi, thanks for taking my questions.

Sure. Chase A. Jacobson - William Blair & Co. LLC: I guess most of my questions have been asked here, but one clarification. On the revenue guidance for down 1% to up 3%, does that include the currency headwind?

It includes the year-end rate, but as Mike mentioned, not any adjustments up or down since then during the course of the year. We have to pick a point in time because otherwise every day the guidance range could change with the volatility of the dollar index. So we picked a point in time towards the end of the year. But that range does include that. It does not include the impact of the CE revenue. Chase A. Jacobson - William Blair & Co. LLC: Okay. And then, Tom, I think you mentioned that there's potential for further actions on the cost side. And you talked about a few things like low-cost sourcing and project management. I was wondering if you could give any more color there, and how quickly Flowserve could react if we were to enter a period where the CapEx environment from your major oil and gas and energy customers was going to remain lower for longer than just 2015. Michael S. Taff - Chief Financial Officer & Senior Vice President: Obviously, we've been working on cost reduction plans for the last several years, which is one of the reasons why you see some of the margins the way they are. But relative to, for instance, low-cost souring, as I mentioned earlier, we do spend a lot of time looking at our manufacturing network of almost 70 plants in determining what is the most efficient way of manufacturing that product as we get a project in. And there's an expertise there and confidence that we continue to hone in and result in additional reductions. Mark mentioned absorption. We're looking at obviously that on a regular basis. Our supply chain, we spent a lot of time looking at China and India and developing that in Eastern Bloc countries the supply chain, so we have a very aggressive supply chain program going on. Project management, a couple years ago we put that in full force effect to take a product/manufacturing business and turn it into a very responsive customer-focused, project management driven organization. And we've made progress, but we have a lot to go on that in terms of schedule development and core execution. And so I feel very comfortable with where we are at there, but we have things to go there. We started to shift from Six Sigma quality initiatives more to Lean initiatives in the business, and we're in the early stages of shifting to Lean. So as Mark indicated, there are a lot more levers to pull in the business. I mentioned just a few of those. But I can certainly go through different lists here. Notwithstanding, all the work that we've done on the sales side to drive alliances differently and re – I would say constitute our sales force to go after our chemical and industrial business differently.

Let me just give you an overall summary I think around short term. Our focus is we're going to continue to invest to grow this business because this is not the type of market that anybody wants to abandon by any stretch of the imagination. Now to your point, are there some high-return cost actions that we can take that we plan to do? Absolutely, I think we've started talking about that last summer that over time, we have the opportunity to reduce our under-absorption, to certainly reposition capacity and take advantage of that. If the market dictates, you accelerate those things. If the market is strong, maybe you smooth them out over a period of time because remember; at the end of the day, we still have to take care of our customers.

Our next question comes from David Rose from Wedbush Securities. Please go ahead.

Good morning. Most of my questions have been answered, so I just have one. And by the way, Mike, you will be missed as well. Michael S. Taff - Chief Financial Officer & Senior Vice President: Thank you.

I appreciate all your help throughout the years. Your assumption on margins, can you provide us some basic assumptions in terms of material inflation or deflation? Are you expecting any tailwinds? Are they embedded in your margin assumptions? Michael S. Taff - Chief Financial Officer & Senior Vice President: Do you mean going forward or...

Yes. Michael S. Taff - Chief Financial Officer & Senior Vice President: Obviously, we haven't given margin guidance beyond where we were. And keep in mind, we set out margin guidance three years ago, and we're basically a year ahead of schedule. And what that means, that's what gives us confidence to start going on to our other initiatives, driving growth, and some of the other things that I've talked about here. But as you look forward, that's an aspect of it around material cost, keeping in mind, and we've talked about this before. We don't use a lot of base raw material and therefore take direct commodity risk. Typically, especially on the large lead-time projects, we're sourcing components, and those components are oftentimes priced contemporaneous with bidding the project. So we know the margins at that point in time. It's not to say were immune from commodity costs, certainly on some of our shorter cycle where we use bar stock on our seal faces, but you can adjust price fairly quickly. So what you've seen in our history is there isn't a tremendous amount of commodity exposure to our benefit or to our detriment. Typically, that's in our supply base.

Perfect, thank you.

Our next question comes from William Bremer from Maxim Group. Please go ahead.

Good morning, gentlemen. All the best, Mike, I appreciate your time. Michael S. Taff - Chief Financial Officer & Senior Vice President: Thanks, Bill.

My question is based upon the $2 billion-plus franchise in the aftermarket. Mark, what's possibly the next step there? You're doing a fantastic job worldwide with your QRCs, servicing your end markets. Is it possible maybe you go into maybe an additional leverage there of that base to other maintenance functions, possibly pipeline integrity for the downstream? Is that like the next step here?

I think we want to continue the steps. So if you look at the compound growth rate over the last couple of years, actually through the cycle, we want to continue those steps as well. I think some of the investments we're looking at, if you think about it, is to continue to index and inventory our installed base. There is a lot of installed base out there that we need to understand where it is and take care of it. That's what our customers want. And actually, if you think about it, that's one of our big investments this year. I talked about we're going to continue to play offense and grow. That's one of the things we're looking at because if we know where it is, then we can call on it and take care of it. That's core. The other things to look at in our business as well as is asset monitoring, some reliability. We've been starting to scratch the surface on that, continuing to drive more of that in our business. And some of the other – as our products get more complex, also keep in mind around that business with the SIHI acquisition, we're going to look for ways to better support those products with our aftermarket business. So we've certainly been very pleased with the growth over the last couple of years, but we do have some initiatives where we're really trying to enhance the growth in that business, I think one of the best of which is going to be finding out where we can serve our customer with our own product that, if you think about Flowserve, our product has been around for 150 years. I'm not saying they all have a 150-year life, but there are quite a few of them that have been out there many, many years that we need to go and take care of.

Thank you, gentlemen. That's all I have.

Sure.

And our next question comes from Joe Giordano from Cowen. Please go ahead. Joseph C. Giordano - Cowen & Co. LLC: Hi, guys. Thanks for taking my question. Building on the last one there, how would you judge your aftermarket capture rate versus a year ago? And are you gaining only on your installed base, or are you picking up share on other competitors' installed base, and what's the competitive dynamic there?

I think we talked about this before. Our primary opportunity is really around the customer who is doing the work themselves, is bringing that in-house, having us do it. And with the advent of a lot of their maintenance folks starting to retire, that is going to present an opportunity; also being as responsive as what we call the local machine shops, the local repair shops. But it's not only just about service and repair. It's also about going in there and talking about performance. How do we increase and improve performance in the product? I think the real opportunity as we look forward is what I commented on earlier, and that is getting a better handle of our installed base around the world. And we're going to have to invest in resources this year to do that because it takes people, it takes systems to do that. But we think there's going to be a high payoff on those investments in years to come. So I'd say the existing installed base is still an opportunity. The strategies have been paying off around how we improve reliability in the systems. And our timeliness and responsiveness are going to be what present and have presented the opportunity around our customer maintenance, their capabilities in-house, and also responding to some of the local repair shops. Joseph C. Giordano - Cowen & Co. LLC: I agree. That's great color, thank you. And then lastly from me, if we look at the top end of your organic guidance on the revenue side, 3%, what needs to happen to hit something like that? And what level of project activity maybe on a year-versus-year basis are you contemplating in that scenario?

Part of what we look in that is, again, we came in with, and I believe this was already currency adjusted to year-end rates, $150 million more backlog. So if you're just planning that on and nothing else were to occur, that would drive near to the top end of our growth. So with that, there is some forecast around project opportunities similar to last year. A lot of our run-rate business is brownfield, but some of it does attach to new CapEx spend. So I'm not suggesting it's just as easy as just executing on our backlog, but the fact is that does give us a revenue tailwind. So what we're going to have to do underneath that is continue to drive our aftermarket business, penetrate additional areas on our run-rate business, and the projects that are out there that are going to continue to forward, execute on them, get them and execute on them.

Thank you, ladies and gentlemen. We have reached our allotted time for Q&A. This concludes today's conference. Thank you for participating. You may now disconnect.