Good day and welcome to the Kennametal's Fourth Quarter and Fiscal Year 2016 Financial Results Conference Call and Webcast. All participants will be in listen-only mode. Please note today's event is being recorded. I would now like to turn the conference over to Kelly Boyer, Vice President, Investor Relations. Please go ahead.

Thank you, Rocco. Welcome, everyone, and thank you for joining us to review Kennametal's fourth quarter and fiscal 2016 year-end results. We issued our quarterly earnings press release yesterday evening and it's posted on our website at www.kennametal.com. This call is being broadcast live on that website and a recording of the call will be available for replay through September 2. I'm Kelly Boyer, Vice President of Investor Relations. Joining me on the call today are Ron DeFeo, President and Chief Executive Officer; Jan Kees van Gaalen, Vice President and Chief Financial Officer; Marti Fusco, Vice President, Finance and Corporate Controller; Chuck Byrnes, President, Industrial Business Segment; and Pete Dragich, President, Infrastructure Business Segment. Ron and Jan Kees will discuss the June quarter and total year operating and financial performance as well as our outlook for fiscal year 2017 and we'll be referring to the slide deck posted on our website. After their prepared remarks, we will be happy to answer your questions. At this time, please direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements and involve a number of assumptions, risks and uncertainties that could cause the company's actual results to differ materially from those expressed in or implied by those statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings. Also, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found on our Form 8-K on our website. With that, I would now like to turn the call over to Ron. Ronald M. DeFeo - President, Chief Executive Officer & Director: Thank you, Kelly, and hello, everyone, and thank you for your interest in Kennametal. I'm going to begin with some overview…

And today's first comes from Ann Duignan from JPMorgan. Please go ahead.

Hi. Good morning. Ronald M. DeFeo - President, Chief Executive Officer & Director: Good morning, Ann. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Good morning, Ann.

Ron, could you just walk us through your expectations by quarter or maybe first half, back half as we go to fiscal 2017? Do we lose a day in Q1 because we gained a working day in Q4? And just talk us through the mechanics of how we should think about modeling. That would be great. Ronald M. DeFeo - President, Chief Executive Officer & Director: I think pretty much we've spent some time on this. And the simplest way to answer that question is we expect 2017 to pattern itself in a fairly similar way to 2016. It won't be identical. There are a couple days here or there that change but we do expect pretty much 2016 to split our earnings and our revenue in a fairly similar pattern.

So that was about what 48%/52%, is that the way to think about it? Ronald M. DeFeo - President, Chief Executive Officer & Director: Something like that. That's for revenue but for earnings it's more like 25%-ish first half, 75%-ish second half on an EPS basis.

Okay. That's helpful. And then if you could talk about Industrial versus Infrastructure. What specifically – I know you said maybe destocking is done, maybe end markets stabilizing. Maybe just a little bit more color by end market? Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay. I will start on that but I will let Pete and Chuck to make a couple of comments as well. Just so I frame 2017 a little bit. When we report the first quarter, we are going to report with WIDIA broken out. So, WIDIA is now reported in Chuck's Industrial business and that will be pulled out. The impact of that will provide a looking backward detail but it will take some business out of our North American area and actually make Chuck's business is a little bit more concentrated in Europe than might be readily apparent. And WIDIA is, revenue-wise, probably in the range of $170-ish million, maybe a little bit more, maybe a little bit more but in that range, so, for people's perspective. End-market wise, it's really pretty tough out there across a range of end markets. I guess I would say in the Industrial side, aerospace, maybe automotive to a little bit of the extent. And in Infrastructure, pick your poison, mining, commodities. The only positives, I think, are a little bit in the earthworks kind of business some in the construction side. But, just general, it's tough to get ahead of the prior year. The good news I think as we look forward is that we have a little bit easier comps to go against, but one of the concerns we have is that while we're calling our revenue to be basically flat year-over-year, we're not sure how confident for us to really be on that. So, that's in fact one of the reasons why we were a bit more aggressive on thinking about further cost reduction. But any more comments on end markets, Chuck or Pete?

Sure. Ann, thank you for that question. In Industrial, we definitely have seen the end of the de-stocking. For four straight months, March through June, our sales have been right in line with the point-of-sale data that we get from our customers. I believe July will be in line, so we do not see any further de-stocking in our previous four to five months.

And Ann, just to add to that, for the Infrastructure business, year-over-year what we're expecting is flat sales with some of end markets slightly down. In oil and gas, we've had now several weeks of encouraging news relative to rig counts. We're cautiously on domestic that we'll see some improvement in oil and gas as we go through FY 2017. So mining continues to be a challenge for us. We did see continued deterioration. The second half of FY 2016 has somewhat stabilized but we're having to take a number of actions in order to maintain competitiveness. As Ron said, construction has been a very bright spot for us. Year-over-year we did grow about 6%. We have had great success with the new product introductions that you've had the exposure to and the bottom line has shown (32:22) that has continued, and we're very happy with the performance that we've got out of that product in our end markets. Aerospace continues to be a growth area as well and we saw a slight improvement year-over-year in growth there and we expect to continue into FY 2017.

Okay. And if rig counts were to decline again, just with the oil back then below $40, would that be a negative headwind for you in Infrastructure? And then, I'll leave it there. Thanks. Ronald M. DeFeo - President, Chief Executive Officer & Director: Yeah. Yes, Ann, I think that we're all wondering what's going to happen with the price of oil. Rig counts improved a little bit. The price of oil has now gone back down. Yeah, it would be negative if rig counts – if those trends reverse, for sure.

Okay. Thank you. I'll leave it there. Appreciate it.

And our next question comes from Julian Mitchell of Credit Suisse. Please go ahead. Julian Mitchell - Credit Suisse Securities (USA) LLC (Broker): Hi. Good morning. Just, firstly, on the medium and longer term, you've announced these extra restructuring measures today. I guess I just wondered what percent of the overall current head count base is that 1000 people number that you mentioned? And then, related to that, what's the end goal here in terms of medium or long-term profit margins when you were figuring out how many heads to cut and what the extra cost measures be on that, should be? Ronald M. DeFeo - President, Chief Executive Officer & Director: Well, I think our long-term objective is to be as efficient and as customer service effective as we possibly can, and to find that right balance, okay? We know where our competition performs. I would like to say that we're not anywhere near where that is at this stage. So we've got a lot of runway. But there's nothing within this company that should suggest that we should be anything but at least equal if not better than our competition. So that kind of frames the situation. Total head count at Kennametal today is a little bit over 12,000. So 1,000 coming out of the organization is about an 8% drop. But if you think about the company, today we're 21% smaller than we were a year ago. Some of that is a result of divestitures and took some head count out as a result of that divestiture. But if you also reflect on the fact that 45% of our total cost is labor-related, we obviously have work to do to make this proportionate. I think these reductions are a little bit greater than proportionate, but this should…

And our next question comes from Eli Lustgarten of Longbow Securities. Please go ahead. Ronald M. DeFeo - President, Chief Executive Officer & Director: Good morning, Eli.

Good morning, everyone. Can we talk a little bit about your expectations for operating profitability? I guess, we talked last time about the possibility of the tax rate normalizing and we are still going to be in 15%. So we're still 5% to 10% below what would be a more normal tax rate. How long does that continue? And with the lower tax rate than I think a lot of us expected, your implication is that your operating profitability for 2017 will remain relatively similar, or maybe a little bit higher, but not much change from 2016. Can you give me some guidance of what you expect operating margins in Industrial and Infrastructure can look like? Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay, Eli. Let me take that and I'm not sure we're going to provide forward views on each segment because when we report, those segments are going to look differently, okay? But in the company overall, we expected our forward tax rate to be in the 22% to 25% range. We expected that until we had to book the valuation allowance in the United States. Because we booked that valuation allowance in the U.S., it reduces our tax rate going forward; therefore, the benefit of 13% to 17% that range with the midpoint of about 15%, that will continue until we demonstrate, which we're confident we will, sustained profitability in our U.S. legal entity. That will take a couple of years. So the go-forward profitability, from a tax rate point of view, will be impacted from a beneficial, fairly lower rate. If we did have a capitalized U.S. tax asset, we'll return back to that 22% to 25% tax rate. So that kind of frames that.

Thank you. Ronald M. DeFeo - President, Chief Executive Officer & Director: From an operating point of view, 2017 is a year where we have to recover a substantial amount of cost, okay? We had savings for the wrong reasons in 2016 because we didn't pay bonuses, because we were restricted in some of our merit increases, because some of our benefit costs are going up. So we're going to have to recover in a non-inflation oriented environment, a lot of those costs in planning. But despite that, we're seeing a fairly meaningful increase in our operating profit, even including recovering some of those costs. Would we like it to be greater? Yes, we would. So, therefore, that's why we initiated some of the additional cuts we've made.

Well, can you give us some idea of what the corporate costs will go up for the year? And is it fair to assume that the operating profitability of Infrastructure will basically go up a little bit and maybe you can get towards a double-digit all-in for Industrial? And WIDIA, which looks like it has declined a lot because it used to be a little over $200 million, I believe, is that operating profitability below the Industrial group, above. Can you give us some idea of how to look at this? Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay. WIDIA is going to be breakeven at best, maybe in that range, but our expectation is to expose it and grow it. The operating profit from Industrial probably will be north of double digits and we expect pretty meaningful increases in our Infrastructure business. Don't want to quite dimensionalize that right this minute but pretty meaningful increases. The headwinds we're facing are in the range of $30 million to $40 million for those extra costs that I mentioned earlier. So pretty substantial additional costs that we're having to overcome. So, that's the reason why we got all these basic cost savings programs from the corporation overall but why the profitability isn't going up quite as much as perhaps it should be. But also...

So the operating headwind is it going to be reported in the segments or is it a corporate number or split between it? Do you have an idea of how we should model that?

It will be in the segments. Jan Kees van Gaalen - Chief Financial Officer & Vice President: And those will be in the segments.

Each segment. All right. Thank you very much. Ronald M. DeFeo - President, Chief Executive Officer & Director: Thanks, Eli.

And our next question comes from Michael Feniger of Bank of America Merrill Lynch. Please go ahead.

Yes, guys. Thanks for taking my question. I understand that the UK is only 2% of your overall sales. But within your forecast of flat revenue next year, what are you expecting of Europe in 2017? Ronald M. DeFeo - President, Chief Executive Officer & Director: Well, do you guys want to talk about that because, Chuck, you've got probably the biggest European business. I have a view but you're closer to it.

Sure. Europe was our top performing unit within Industrial for 2016 which was slightly underplanned. And we see a flat to slightly down market. Again, there's some currency changes that we have in plan for Europe that may dampen out the volume delta that we see. Again, the currency is a negative to Industrial for 2017 versus what could be in pieces a slightly higher build rate. Ronald M. DeFeo - President, Chief Executive Officer & Director: So perhaps a little different than 2016 where we saw Europe at least a little bit positive and the Americas quite a bit negative. The outlook there is a little bit negative for Europe with perhaps the Americas being a little bit more positive. But I want to add this before Pete comments. We also expect Eastern Europe to be a lot stronger. There are some parts of the east where either through WIDIA or some other places we will capture some new business, maybe there's some offset that will be more positive there. Pete?

For the Infrastructure business, we do expect year-over-year some slight growth in EMEA. Most of that is coming from the success we've had in the construction business as well as expanding into the Middle East, which I think we saw the benefit of late in fiscal year 2016 and we're expecting it to continue in 2017 as well as actions that we're taking to improve our cost base in EMEA with localization of manufacturing and leveraging our Asia manufacturing to support our EMEA sales.

Okay, that's great. And then my next question is just on – it's encouraging to hear the trends in de-stocking, but the Industrial business is still down organically 8% or 9% and we're hearing comments from some distributors about decelerating trends. I was hoping you could discuss that. What you're seeing in the business and what you saw maybe through July as well? Are you seeing (45:25) into the year-over-year, start to close, and are we expecting that to turn positive by Q2, Q3 to get us that flat outlook?

We're pleased that we continued in the second half, we sold at the rate that our distributors were selling at. That's encountered to our first half where we definitely saw de-stocking on our distribution channel. Our sales into the channel were far below what our customers were selling. Our initiatives around direct-to-indirect and focus on our large VARs and our large national chain here in the U.S. have definitely generated some additional activity that we're seeing an increased sales rates in our distribution channel. Ronald M. DeFeo - President, Chief Executive Officer & Director: So I think if you reflect upon the trends and inherent of what Chuck said, was our year-over-year organic decline may not be quite as big as it was because I think we shipped a little bit more into the channel at the end of last year than we did at the end of this year. But despite any of those, kind of, readings, what I'd say is we're just focused on growth. We want to gain share, even among our distribution partners. We're aggressive with them. We're talking to our distribution partners in a way they haven't heard Kennametal talk to them. And I think that's positive. So I'd encourage you to ask MSC what they think of Kennametal, ask other partners what they think of the Kennametal of today versus the Kennametal of six to nine months ago.

All right. Thanks, guys. Ronald M. DeFeo - President, Chief Executive Officer & Director: Great.

Ladies and gentlemen, Our next question comes from Walter Liptak of Seaport Global. Please go ahead.

Hi. Thanks. Good morning, guys. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Hi, Walter.

Hi, Walter. Ronald M. DeFeo - President, Chief Executive Officer & Director: Good morning, Walter.

Hi. I wanted to ask about the head count reduction. And it sounds like you're pretty far through. I think you called out 50% through that reduction? And I'd like to know why you did not include that in the guidance? Or is that in there somehow, considering that you've got some temporary costs that were cut that might be coming back up? Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay. So, Walt, we put our plan together, looked at the plan. The plan looked like a reasonable plan. But the outcome of the plan was we were working really, really hard to only get a little bit further ahead. So we took a hard look at what was possible and we said we need to have fewer people and fewer cost within the company and we started at the top of the company. One of the important comments I made was more than 20% of our top 100 paid people in the company are no longer with the company. And while any head count program and change like this is painful, frankly, it's necessary and a lot of the head count is also taking place changes at our manufacturing operations, which were becoming inefficient, because the revenue, frankly, was substantially lower. We didn't include it in our outlook because, at this stage, our outlook includes flat sales. So what happens if our flat sales aren't flat? We'll need to be able to get some of that benefit from other places. So what we wanted to do is to assure ourselves, and consequently, our investors that we were doing everything we could to deliver the $1.10 and $1.40 EPS range with the potential of possibly exceeding it if the revenue comes in at about the flat level and we can execute that head count reduction program efficiently. Now, that head count program is going to take a little bit longer in different parts of the world. So while we're about halfway through it, at this stage, we also have a lot of work to do in some of our European operations. And we're really not emphasizing reductions in force in Asia, China and India in particular.

Okay. As part of this program, are you – some of the things you're talking about in the future like fix-in-place manufacturing, some of this automation. Is this processes that have been developed already or are these homegrown processes that you're putting in place now? Ronald M. DeFeo - President, Chief Executive Officer & Director: Many of these are proven automation processes that are readily available and we, for whatever reason, have not implemented over the years. We just approved a $10 million capital investment to automate our packaging. It will take somewhere in the 18-month timeframe for that to be effective but we're on our way on that. And there are a number of additional programs and initiatives that have been developed by our team for a number of years that we think are pretty proven.

Okay. Fair enough. Okay, thank you.

And our next question comes from Steve Volkmann of Jefferies. Please go ahead.

Hi. Good morning. Ronald M. DeFeo - President, Chief Executive Officer & Director: Hi, Steve. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Hi, Steve.

Most of my questions have been answered but in case we have some sort of organic headwind in 2017 from the divested business sort of falling over into 2017, isn't that right? How much would that be? Jan Kees van Gaalen - Chief Financial Officer & Vice President: 5% at group level.

5%. So, I guess, the rest of the businesses have to make up that 5% to get you to flat organic. Am I thinking about that the right way? Ronald M. DeFeo - President, Chief Executive Officer & Director: No I don't think so, Steve, because we basically... Jan Kees van Gaalen - Chief Financial Officer & Vice President: Excluded that. Ronald M. DeFeo - President, Chief Executive Officer & Director: Excluded that in our view. So, the business, if you exclude the piece that JK mentioned it's about $2 billion in revenue versus the $2.1 billion that we reported. So, we're looking at about $2 billion in revenue in 2017.

Okay, I got that. Thanks. And then just sort of following on to the previous question. And, again, I just want to make sure I'm kind of thinking about this right, you talk about this 1,000 people that are coming out. It's going to – you said you're about halfway through that already, I think. I mean, if I just do the math that looks like a cushion of upwards of $0.50 a share for 2017. That seems like a big cushion. Ronald M. DeFeo - President, Chief Executive Officer & Director: Well, halfway through isn't halfway through like we're saving money today. It's – we've identified the people that participated in a voluntary separation plan. They will roll off the company's ranks through the first quarter and into the second quarter. So timing, cost, all those things are in process of being worked through. So in an ideal world, you're right. But I've never seen an ideal world kind of come true like that very crisply. Perhaps we will but right now I'm not so sure. Jan Kees van Gaalen - Chief Financial Officer & Vice President: So, Steve, we will report. Obviously, with the Q1 and Q2 earnings calls, we'll report on the progress.

Great. Okay. That's very helpful. That sizes it better for me. And then, finally, just one sort of bigger picture question, Ron. I mean, traditionally Kennametal has had some analyst days in the fall and sort of laid out a lot of the longer-term views of the world and so forth. Is that something you're thinking about? Or how do you intend to keep us updated on this stuff going forward? Ronald M. DeFeo - President, Chief Executive Officer & Director: I think you might have been in our office yesterday when we were talking about this, Steve. Seriously, this is something we want to do probably late October. We'd love to have people come out to our Technology Center where we can actually show them some of the automation projects that are planned and underway. And when we can kind of tick and tie in a little bit more detail some of the $200 million to $300 million of productivity improvements that are possible with the enterprise. So we'll keep you posted on that.

Great. Thanks so much.

And our next question comes from Rudy Hokanson of Barrington Research. Please go ahead.

Thank you. I was wondering if you could speak a little bit more as to what you hope investors gain by the understanding of WIDIA as a separate segment? And also how that's going to help you manage WIDIA better than you would by keeping the current reporting basis? Ronald M. DeFeo - President, Chief Executive Officer & Director: Thank you, Rudy, for that question. The reason we're bringing out WIDIA has little to do with what we think investors will gain and a lot more to do with getting greater focus within the enterprise on that brand and on the potential that exists in that brand. The SEC rules are pretty clear. How you manage is how you should report. So, it is my feeling that WIDIA has been an undermanaged brand for this company for some time. We've owned it since 2003, I believe, and the business has shrunk and it used to be a premier product. We think it can grow, and we think it can return the company a substantial amount of new business over time with focus. When it is combined with Kennametal, it gets the second child syndrome and we need to have it be a first child and a first player. And if you see this in our competition, you see a number of our competitors have multiple brands with specific value strategies and we think WIDIA can develop that way. It is a great brand in India. It has a good reputation in United States. It has a very good representation in some places in Europe but it's waned in terms of importance. And I just think with a little bit more focus we'll bring it back to prominence. If I had had my brothers, I would have done this internally and not separated it out in terms of external reporting because it's kind of small to do that but that's not what the SEC rules allow.

Okay. Thank you. That was my question. Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay. Thank you.

And our next question comes from Jorge Pica of Wells Fargo. Please go ahead.

Good morning. Ronald M. DeFeo - President, Chief Executive Officer & Director: Good morning, Jorge. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Good morning.

I'm on for Andy Casey this morning. Can you talk about where you feel like your strongest end markets are because through the course of the call, it sounded like really construction and aerospace are the markets you feel like are going to be the most stable going forward? Am I reading that right? Ronald M. DeFeo - President, Chief Executive Officer & Director: Yes. I think you're reading that correctly. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Yes.

And what is – you're going to have to grow these segments in a declining market, essentially out-innovating your competitors. You obviously are working on the footprint, the cost reduction. What is more the innovation plan that you have going forward, maybe in new products. Ronald M. DeFeo - President, Chief Executive Officer & Director: Well new products have always been part of the fabric of Kennametal. And we're going to continue to develop proper new products. We're also going to continue to solve our customer's toughest problems. Kennametal is the company people come to when they have tough problems to solve because our engineers know how to get that done. But that's only a piece of the market. It's not the whole market. And for us to be successful across the range of the market, we need to have better sales execution, which means we need to have a really, really good initiative for the major customers and great service level for mid to smaller customers. We need to have great product availability. We need to have competitive pricing. And, in general, we need a service mentality that takes a back seat to no one. And these are areas where intensity and focus and leadership and empowering people closer to the market will make a really big difference. I think Chuck and Pete have already seen specific impacts of where that can happen where they can make the decisions, or their people can make decisions that historically might have gotten bogged down a little bit in this company. So, I hope I've answered your question there. But do you want to comment, Pete?

Yeah. Just to add to what Ron said, relative to product development and looking at the markets, we've seen, in my business in particular, migration from the toughest conditions. Certainly, as Ron said, that's always going to be part of our DNA, who we are to provide those solutions. But there's another expanding portion of the market now that requires something that, in some cases, that's just good enough. And we've looked at this from the a standpoint of developing products that aren't extremely better but are better than what's out there in the market, but most important, we'll produce those at a competitive cost structure and be competitive from a pricing standpoint. And we've seen success with that with recent introductions and we're continuing that with our new product development pipeline.

What geographies do you feel like are going to be most supportive of kind of your new product development strategies? Where do you feel like you'll get the most headway geographically?

Geographically, and I'm talking relative to construction now in the most recent product introductions. We've had in FY 2016 great success in EMEA and North America. Year-over-year growth in construction specifically the Road King product that we talked about in Q4, It was 18%. It was huge and we haven't even introduced the product in Asia yet. We're in the process of doing it as we speak and localizing production. So I'm looking forward to having success in Asia.

Jorge, this is Chuck. I hope you can come visit with us at IMTS. We have some major new platform launches we'll be announcing at IMTS. There's a new Duo-Lock Turning Drilling platform that we'll launch at IMTS, a new Milling 411 platform where we'll be announcing a significant expansion of our already successful Beyond Evolution Groove and Cut-Off platform and then some exciting new grades in our top-notch Grooving platform that will all be rolled out at IMTS, showing significant benefits to customers.

That sounds great. Thank you. Ronald M. DeFeo - President, Chief Executive Officer & Director: Okay.

And our next question comes from Samuel Eisner of Goldman Sachs. Please go ahead. Samuel H. Eisner - Goldman Sachs & Co.: Yeah. Good morning, everyone. Ronald M. DeFeo - President, Chief Executive Officer & Director: Good morning, Sam. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Good morning. Samuel H. Eisner - Goldman Sachs & Co.: So just on the original cost saving plan, the Phases 1 through 3. Are you guys still on pace to achieve roughly the $115 million to $135 million run rate savings by the end of this year? Jan Kees van Gaalen - Chief Financial Officer & Vice President: Yes. That's after completion of, materially completing Phase 1. That is still the target, yes. Samuel H. Eisner - Goldman Sachs & Co.: Thanks. That's helpful. Ronald M. DeFeo - President, Chief Executive Officer & Director: In fact, let me just state it more directly. I think we want to do better than that, okay. I think we've added additional cost savings programs so we can exceed that. Samuel H. Eisner - Goldman Sachs & Co.: That's helpful. And then you guys called out roughly $0.19 of raw materials absorption and mix tailwinds for your fourth quarter EPS bridge. I was wondering if you could maybe break out those individual pieces. Just curious what the major drivers were. It's basically the largest bucket of improvement that you guys saw in your earnings this quarter. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Sam, look we typically don't provide the break out for this. The raw materials are a larger portion. Samuel H. Eisner - Goldman Sachs & Co.: Okay. And then maybe asked a different way, when I look at your inventory as a percentage of LTM sales, you…

And our next question comes from Steve Barger of KeyBanc Capital Markets. Please go ahead.

Hi. Good morning. Ron, you said you're being aggressive with the distributors. The message you're sending is different than the message from six months ago. Question is how is that conversation different? What is the new message that's so compelling that wasn't being communicated before? Ronald M. DeFeo - President, Chief Executive Officer & Director: I'm going to let Chuck answer that.

Steve, this is the biggest change I've seen in my seven months with Kennametal. We have implemented our direct to indirect strategy, which basically says we're not going to compete with our indirect partners at small direct customers that Kennametal used to hold so close they would never allow indirect partners to participate in those sales. We also have continued to invest, as Ron mentioned, to address our inventory levels. So we are continuing to have high fill rates and high availability of product that make it easier for us to do business with. This direct to indirect change has driven a response from our customers, our indirect partners that say we really want to be their partner and we want to stop competing with them. And I can't explain how positive that is that our indirect customers no longer think of our sales people as their competitor but instead, they think of them as their partner. I spend a significant part of my time dealing with our VARs globally and with MSC here in North America to find any way we can continue this path where they see us as their partner instead of their competitor. Ronald M. DeFeo - President, Chief Executive Officer & Director: Yeah. VAR stands for value-added reseller. And, I guess, what I would say is one of the big customers that Chuck is referring to, and I won't mention which one, when I visited with them, they said we have to look at Chuck's card to see whether or not it really said Kennametal on it because he fundamentally understands that we're partners and dedicated to growing our business. And that's an attitude change and it starts from the top.

So, when I think about that new mindset towards the distribution channel, and you've talked about how you need to have really great innovative product, you have to invest in inventory to keep that level high, yet you're reducing head count by 1,000 people. Presumably, that's not coming from engineering but maybe some from sales. But really it's all manufacturing where that reduction is coming? Ronald M. DeFeo - President, Chief Executive Officer & Director: Steve, it's going to come from everywhere in the organization. We have some limitations. I mentioned, India, Asia and probably the IT finance and HR organizations which were targeted in our Business Excellence initiatives that were already underway. And let me just say it this way. You can't take 1,000 people out of an organization and not have various parts of the organization affected and certain levels of work has to change. And there's got to be a concentration on the most important things. But at the end of the day, it's probably going to be a preponderance of operational folks with some sales and marketing. But also, let's be clear, a large portion of the cost has come out of the highly paid. Jan Kees van Gaalen - Chief Financial Officer & Vice President: As Ron mentioned, we've changed the six people out of nine in the IT (01:08:11). 20% of the highest paid 100 employees of the company are leaving or have left already. So there's a considerable effort being made to make sure that top-down these initiatives are implemented.

Understood. Thanks. So, last question is just around free cash flow then. So given the normal seasonal pattern of earnings and the cash restructuring costs that you're undertaking early in the year, should we think the free cash flow is negative in the first half, positive in the back half? Jan Kees van Gaalen - Chief Financial Officer & Vice President: I think most of the free cash flow will be in the latter half of the year but negative are not entirely there yet in the first half. Ronald M. DeFeo - President, Chief Executive Officer & Director: In other words, probably neutral in the first half. Jan Kees van Gaalen - Chief Financial Officer & Vice President: Neutral in the first half. Ronald M. DeFeo - President, Chief Executive Officer & Director: And most of it in the second half.

Got it. Thanks for the time. Ronald M. DeFeo - President, Chief Executive Officer & Director: All right, Steve. I think, Rocco, that probably is it on the call, correct?

That is correct. Yes, sir. Ronald M. DeFeo - President, Chief Executive Officer & Director: So a couple of final comments. I appreciate everybody participating in and their interest in Kennametal today. Obviously, please follow up with questions. Kelly, Jan Kees, myself and other members of management team would love to engage with any of your interests in Kennametal today. Thank you very much.

And thank you, sir. Today's conference has now concluded. A replay of today's event will be available approximately in one hour after the conclusion of today's conference. Please dial 1-877-344-7529 or 1-412-317-0088 and enter code 10071553 to listen to the recording. Thank you for attending today's presentation. You may now disconnect.