Good day, ladies and gentlemen, and welcome to the ON Semiconductor Fourth Quarter 2016 Earnings Conference Call. As a reminder to our audience, this conference may be recorded. It is now my pleasure to hand the conference over to Parag Agarwal, Vice President of Corporate Development and Investor Relations. Sir, the floor is yours.

Thank you, Brian. Good morning, and thank you for joining ON Semiconductor Corporation's fourth quarter 2016 quarterly results conference call. I'm joined today by Keith Jackson, our President and CEO; and Bernard Gutmann, our CFO. This call is being webcast on the Investor Relations section of our website at www.onsemi.com. A replay of this broadcast, along with our earnings release for the fourth quarter of 2016, will be available on our website approximately one hour following this conference call, and the recorded broadcast will be available for approximately 30 days following this conference call. The scripts for today's call and additional information related to our end markets, business segments, geographies and channels are also posted on our website. Our earnings release for this presentation includes certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to most directly comparable measures under GAAP are in our earnings release, which is posted separately on our website in the Investor Relations section. During the course of this conference call, we will make projections or other forward-looking statements regarding future events or the future financial performance of the company. The words believe, estimate, project, anticipate, intend, may, expect, will, plan, should or similar expressions are intended to identify forward-looking statements. We wish to caution that such statements are subject to risks and uncertainties that could cause actual events or results to differ materially from the projections. Important factors, which can affect our business, include factors that could cause actual results to differ from our forward-looking statements. Business including factors that could cause actual results to differ materially from the forward-looking statements are described in Form 10-Ks, Form 10-Qs and other filings with the Securities and Exchange Commission. Additional factors are described in our earnings release for the fourth quarter of 2016. Our estimates may change, and the company assumes no obligation to update forward-looking statements to reflect actual results, changed assumptions or other factors, except as required by law. As indicated in our prior earnings release call, due to new and revised compliance and disclosure interpretations of the use of non-GAAP financial metrics by U.S.-listed companies by the U.S. Securities and Exchange Commission, the company has revised its practice with respect to guidance and the use of non-GAAP measures. Please see the earnings release for additional information. We will be holding our 2017 Analyst Day on March 10 in Phoenix, Arizona. If you haven't received an invitation to the event, please request an invitation through the Investor Relations section of our website or contact us. For all synergy-related discussion on this call, we have used Fairchild's 2015 results as a base for all comparisons. Now, let me turn it over to Bernard Gutmann, who will provide an overview of the fourth quarter 2016 results. Bernard?

Thank you, Parag, and thank you, everyone, for joining us today. We handedly (03:45) exceeded our revenue and margin guidance for the fourth quarter of 2016 and posted strong free cash flow performance. Accelerated progress on Fairchild integration, improving demand environment and solid execution of our organic business were the key drivers of better-than-expected results. Now, let me provide you additional details on our fourth quarter 2016 results. Total revenue for the fourth quarter of 2016 was approximately $1.261 billion, an increase of approximately 33% as compared to the third quarter of 2016. Fourth quarter revenue included a contribution of approximately $358 million from our acquisition of Fairchild Semiconductor, which closed on September 19, 2016. Revenue performance of our organic business and that of Fairchild was significantly better than normal seasonality. Our organic business, which excludes Fairchild, grew by approximately 7% year-over-year during the fourth quarter. GAAP net income for the fourth quarter was $0.26 per diluted share. GAAP income before income taxes for the fourth quarter was approximately $18.2 million as compared to $87.3 million in the third quarter. Non-GAAP income before income tax for the fourth quarter was approximately $132 million. Net cash paid for taxes in the fourth quarter was approximately $8.2 million, and diluted shares outstanding were approximately 427 million. Non-GAAP income before tax for the third quarter was approximately $107 million. Net cash paid for taxes in the third quarter was approximately $6.5 million, and diluted shares outstanding were approximately 420 million. GAAP gross margin for the fourth quarter was 30.5% as compared to 34.6% for the third quarter. Non-GAAP gross margin for the fourth quarter was 35.2% as compared to 35.9% in the third quarter. Better-than-expected non-GAAP gross margin in the fourth quarter was driven by strong progress on Fairchild integration and higher-than-expected revenue.…

Thanks, Bernard. I'm very pleased with our results for the fourth quarter of 2016. For the first full quarter that includes results from Fairchild, we are off to a solid start. We exceeded our revenue guidance, and we posted strong free cash flow and margin performance. Our results for the fourth quarter provide clear evidence of strong execution on the integration of Fairchild, and the results also validate our strategic and financial rationale for the acquisition. At this point, we are tracking significantly ahead of our planned synergy target for Fairchild. The performance of Fairchild to-date has far exceeded our expectations, and we expect to see positive revenue synergies as a result of the combination of these two companies. We are very encouraged by the significantly above seasonal revenue performance by Fairchild in the fourth quarter, and current indications point towards continued strength in Fairchild's revenue in the near term. During the fourth quarter, bookings for Fairchild were at highest level when compared to bookings during the last three years. We are seeing significant cross-selling opportunities in various end markets, as we leverage customer relationships, sales reach and distribution network of the combined company to win designs. We continue to make strong progress in the integration of Fairchild, and we are tracking significantly ahead of our planned synergy targets. We are on track to begin in-sourcing of Fairchild's back-end operations by the end of the year. IT and systems integration is progressing well, and we expect to complete that part of the integration in the fourth quarter of the current year. We've achieved sizable synergies related to purchasing, planning and other related functions in the cost of goods sold. We continue to make significant progress on operating expense rationalization. And exiting the fourth quarter of 2016, we have been able…

Thank you, Keith. Based on product booking trends, backlog levels and estimated turns levels, we anticipate that total ON Semiconductor revenues will be approximately $1.215 billion to $1.265 billion in the first quarter of 2017. Backlog levels for the first quarter of 2017 represent approximately 80% to 85% of our anticipated first quarter revenue. We expect inventory distributors to be flat quarter-over-quarter on a dollar basis. We expect total capital expenditures of approximately $60 million to $70 million in the first quarter of 2017. For the first quarter of 2017, we expect GAAP gross margin in the range of 33.4% and 34.8% and non-GAAP gross margin in the range of approximately 34% to 36%. Factory utilization in the first quarter is likely to be down sequentially. We expect total GAAP operating expenses of approximately $302 million to $330 million. Our GAAP operating expenses include the amortization of intangibles, restructuring, asset impairments and other charges, which are expected to be approximately $31 million to $45 million. We expect total non-GAAP operating expenses of approximately $271 million to $285 million. We anticipate first quarter GAAP net other income and expenses, including interest expense, will be approximately $37 million to $41 million, which includes non-cash interest expense of approximately $4 million to $6 million. We anticipate our non-GAAP net other income and expense including interest expense will be approximately $33 million to $35 million. Cash paid for income taxes in the first quarter of 2017 is expected to be approximately $16 million to $20 million. First quarter cash tax payment is anticipated to be significantly higher than the remaining quarters of 2017, primarily due to the required timing of payments for prior-year's taxes for certain of our non-U.S. subsidiaries. We expect full year 2017 cash paid for income taxes to be approximately 10% of 2017 non-GAAP pre-tax income. We also expect share-based compensation of approximately $15 million to $17 million in the first quarter of 2017. Of which, approximately $2 million is expected to be in cost of goods sold, and the remaining amount is expected to be in operating expenses. This expense is included in our non-GAAP financial measures. Our diluted share count for the first quarter of 2017 is expected to be approximately 424 million shares based on the current stock price. Further details on share count and earnings per share calculations are provided regularly in our quarterly and annual reports on Forms 10-Q and Form 10-K. With that, I would like to start the Q&A session. Thank you. And, Brian, please open the line for questions.

My pleasure, sir. Our first question will come from the line of Chris Danely with Citigroup. Please proceed.

Hey. Thanks, guys. Now that you and Fairchild are officially joined at the hip, can you just talk about the sort of combined OpEx and revenue seasonality trends for the rest of the year?

So, in general terms, as we have said, we are ahead of our plan in achieving synergies. And as just Keith said in the prepared remarks, we'll keep the ON legacy expenses pretty much in control and continue delivering the OpEx synergies as we have planned.

On the revenue side, one of the things to watch is the increased content as a percentage on the wireless side. So, there is still going to be some seasonality that looks consumer-like, but we think it's going to be much more moderated. So, the first quarter, as you can see, a little less than 2% sequential. You should still see strong growth in the second and third quarters. And then, the fourth quarter should be approximately flat. So, it'll have some additional content from the handset side, but in general will be much more muted in the first quarter.

Great. And for my follow-up, Bernard, can you just be a little more specific on the OpEx? Do you think that this level in terms of dollars, you can go down from here or should we expect it to go up, and – but less than sales?

So, right now, we're guiding for the first quarter to go down. It will be going down to a midpoint of $278 million, which is $3 million less than in the first – in the fourth quarter total OpEx.

Okay. Thanks.

Thank you. Our next question will come from the line of Vivek Arya with Bank of America. Please proceed.

Thank you for taking my question, and congratulations on the good results. First question on the pricing environment. A number of your peers in semis have spoken about a more favorable pricing environment. Are you seeing that also? And I just want to see if there's a way to tie if the improvement is there to your target of getting 40% gross margin at some point?

Yeah. We are seeing an improved environment, little less pressure out there. We still do our annual contract renegotiations in the first quarter, so there's still some ASP pressure. But as far as the relative performance, it's much lighter than it's been than the last year. So, our pricing has typically been down 1% to 2% per quarter. And as that lessens, of course, it would help us significantly on our gross margin expansion.

Thanks. And for my follow-up, you did just over $718 million or so in image sensors last year, which was down somewhat versus the prior year. I understand there is a good part of image sensors which is tied to orders, and there is a bad part which is tied to phones and consumers that you have been deemphasizing. Could you help us quantify what the proportions are? And when do you think the headwinds on the bad part will be over so you can start growing the segment in line with the growth trends that it's exposed to?

Yeah. Our automotive portion grew in excess of 25% last year. The declines were all coming out of the consumer and the consumer-like applications. We expect most of this, if not all of this, to be behind us in the first quarter. So, you should see overall market results going forward.

Okay. Thank you.

Thank you. Our next question will come from the line of Chris Caso with CLSA. Please proceed.

Yes. Thank you. Good morning. The first question. Wondered if you could expand on some of your comments about the better seasonality in the Fairchild's part of your business. What specific areas were driving that better seasonality? And then, also, I believe that you are still accounting the Fairchild revenue on a sell-in basis. Could you give some color on the sell-in versus sell-through in that Fairchild part of the business?

Okay. On the better seasonality, in the fourth quarter, really saw a little more strength than normally Fairchild sees in that handset segment and broadly based in their distribution businesses.

And from the revenue recognition, indeed, Chris, Fairchild is on a sell-in mode. We do not intend to change them to sell-through. As a matter of fact, we are in the process of continuing with our improvement in the way to estimate shipping trade and (26:07) at some point of time and we will announce it, we will convert the whole company to sell-in.

Right. But just following up on that, I guess, the – if you could maybe talk about the distributor inventory from Fairchild. And I guess just that better seasonality, it wasn't driven by distributor inventory going up, that actually it was end demand. Is that your view?

It was actually end demand. The inventories – distributor inventories for Fairchild products were flat quarter-over-quarter as compared to Q3.

Great. Okay. And just as another follow-up. Your commentary indicate that you're going to start in-sourcing some of the Fairchild back-end business, I think you said, by the end of the year. Could you talk about the timing of when that starts to impact your margins and perhaps give us some details about the magnitude of that?

Yeah. It will primarily be in 2018, starting with the first quarter.

All right. Thank you.

Thank you. Our next question will come from the line of Craig Ellis with B. Riley. Please proceed. Craig A. Ellis - B. Riley & Co. LLC: Thanks for taking the question, and congratulations on the strong results, guys. Keith, I wanted to start following up on some of your prepared comments. With regards to what you're hearing from customers, you've said that some of them are talking about increased demand. Can you be more specific in terms of end market areas and geographies where the team is seeing that uptick?

So, those are very broad based comments. We're seeing that broadly. I will say that very strong feedback coming from the industrial side of the business where the combined company now has some pretty significant leverage, also from the communications sector and, to a lesser extent, the automotive sector. Craig A. Ellis - B. Riley & Co. LLC: Thanks. And then, the follow-up. Going through the businesses, it was clear that there's just a range of revenue opportunities for the combined company, whether it's cross-selling in PC and wireless, potential for distribution share gain, revenue synergies down the road. Can you rank the top revenue opportunities with the combined company, as it would impact this year's growth, that you see for 2017?

The distribution side, certainly, I think is a significant opportunity, but across all market segments. So, it's not limited to a specific segment. Relative to what we've seen so far on upsides, I would say the handsets and industrial would be the two leading areas. Craig A. Ellis - B. Riley & Co. LLC: Thanks, guys.

Thank you. Our next question will come from the line of John Pitzer with Credit Suisse. Please proceed. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Yeah. Good morning, guys. Thanks for letting me to ask a question. Keith, just a little bit more detail on the Fairchild handset strength. I'm just kind of curious to what extent you kind of view this as content gain and was there any geographical patterns that you could sort of highlight on the Fairchild strength in the calendar fourth quarter would be helpful.

Yeah. Clearly, content gains, on the rapid charging front, we see that globally. We also saw Fairchild picking up significantly in the China-based handsets over previous cycles. And so, those two factors together are providing upsides. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): That's helpful. And this is my follow-up, guys. Just as you think about moving the core ON business from a sell-through to a sell-in model this year, can you help us understand how that might impact, sort of, the quarterly revenue patterns, kind of what's the strategy to mitigate the impact of that change in revenue rec and when in this calendar year do we expect it to hit the most?

So, in general terms, I don't expect any significant change. Our change in distribution inventory, which drove the sell-through adjustment, has been fairly moderate over the last several quarters. It normally – if you look at it historically, it has been a very modest amount. And as far as timing, we are still in discussions with our auditors. And as soon as we are ready, we'll announce it. I don't – I expect it to be somewhere in the first half of this year, but that's dependent upon us completing certain tasks. John William Pitzer - Credit Suisse Securities (USA) LLC (Broker): Thanks, guys.

Thank you. Our next question will come from the line of Tristan Gerra with Baird. Please proceed. Tristan Gerra - Robert W. Baird & Co., Inc.: Hi. Good morning. Given the very low inventories in the channel, what's the potential for the channel to rebuild inventories ahead of the second half? And if so, what's the outlook for a tightening supply chain which could be conducive of some mix shift or even pruning and which will also help your margin profile?

We normally do see modest uptick in distribution inventories in the first quarter, as they prepare for second quarter and third quarter ramps. It is – it's not substantial, but it could be up by 1% or so in a normal environment. Their motivation – very much, they're driven now by the return on working capital. And so, I think there is a lot of discipline out there to prevent overstocking. And right now, I think you'll see the economic trends maybe plus a little bit in the first half, but nothing more significant than that. Tristan Gerra - Robert W. Baird & Co., Inc.: Okay. And what type of utilization rate do you expect in Q1 that's embedded in your guidance?

Low-80s. Tristan Gerra - Robert W. Baird & Co., Inc.: Great. Thank you.

Thank you. Our next question will come from the line of Ross Seymore with Deutsche Bank. Please proceed.

Hi, guys. Just want to follow up on that last question. It's a little surprise your utilization was going doing in the March quarter, just given the preparation for normal strong seasonality in the second quarter and third quarter. Can you just describe why that decision is being made?

Yeah. It's not significantly down, but it is down. We have – we take the opportunity frankly to do maintenance on the facilities during Chinese New Year. That takes a little bit of the capacity out while we're doing that.

And I guess, as a follow-up on the OpEx side of things, Bernard, last quarter on the call, we talked about OpEx to revenue and there was some debate about 22% or slightly less than that, 21%, et cetera. Is that a framework that you could update us on?

We'll basically be updating you on that at the Analyst Day. Right now, what I can say is that, in the first quarter, our guidance is $278 million and it's down from the fourth quarter.

Great. Thank you.

Thank you. Our next question will come from the line of Steve Smigie with Raymond James. Please proceed.

Great. Thanks a lot, guys, and congrats on a nice start to Fairchild and a good growth here. Just wanted to ask about auto a little bit further. Is it fair to say that that's probably going to be your strongest growth driver this year? And if so, without cutting you down, can you give us (33:43) some sense of what the range of growth might be for 2017?

Yeah. So, it should be our strongest area, and we're looking for something in the high-single digit growth rate for the year.

Okay. Great. And as my follow-up on that, typically, on auto, I think you get to see platforms well in advance. So, is it fair to say that, given the design wins you're seeing, we would expect 2018 could be a pretty solid year there as well? And just a housekeeping item, for the tax rate, does that 10% extend into calendar 2018 as well? Thanks.

So, on the auto side, yes, we do get to see those in advance and we continue to be excited by our building backlog there on the design win inventory. So, things should continue strengthening into 2018. And on the tax rate question, we have said in the past and continue stating that our tax rate will inch itself to about 10% to 12%. So, in 2018, we'll be probably a little bit higher than 10%.

Okay. Great. Thanks.

Thank you. Our next question will come from the line of Rajvindra Gill with Needham & Co. Please proceed. Rajvindra S. Gill - Needham & Co. LLC: Yeah. Thanks for taking my questions. Congrats as well. So, if I look at the core Fairchild – the core ON business in 2016, it's a little bit probably slightly down, most likely flat for 2016. As we – but in exiting in Q4, it was up about 7% year-over-year, so the growth rate is kind of reversing course and accelerating. Can we talk a little bit about what you are thinking about in terms of the, kind of, long-term growth rate for the core ON Semiconductor business? Or is that no longer relevant now that we have cross-selling opportunities with Fairchild?

So, you know what? It's relevant and we were roughly flat last year. And basically, what we did was we were drawing from the consumer portions of the image sensor business and that was offset by growth in the rest of core ON. And so, that led to kind of the flattening for the totals. What we actually see is continued share gain in the markets that we're pursuing, and I would expect that shift as we mentioned in the image sensor piece to be over this year. So, you should see us growing at faster than the overall semiconductor market rates. Rajvindra S. Gill - Needham & Co. LLC: Great. So, we've seen strong growth in 2016 out of automotive, communication and computing numbers that are in the 15%, 16% range for the business. If we look at automotive specifically, can you talk a little bit about ADAS and the number of kind of camera-based image sensors that are going to be proliferated in these vehicles over the next one to two years or 3 years and how your kind of competitive position is in that market because it seems like the proliferation of ADAS systems are going to generate a significant amount of cameras?

Yeah, they are. We believe we've been winning about 70% of the ADAS cameras for the new platforms based on the design win feedback we get from our customers. And we believe that, that portion of the market again will be growing greater than 25% a year. So, we're expecting extremely strong growth from cameras. The exact number of cameras per car is going to vary by model line and location around the world, but a 25% kind of increase per year is a great baseline to use. Rajvindra S. Gill - Needham & Co. LLC: And, Bernard, last question and then I'll step back in the queue. Before, you had mentioned the free cash flow combined basis is expected to be about $500 million to $600 million in 2017, $700 million in 2018 and $800 million in 2019. It just seems, based on the kind of preliminary numbers in Q1, that actually the cash flow could be – for this year could be higher than that – higher than the $500 million to $700 million or maybe on the upper end of the range. Can you talk a little bit about that? The cash flow...

Yeah. We are pretty excited about the free cash flow opportunities. We think, again, we can be in that $500 million to $600 million. And obviously, the higher the better. But we are very confident with our prospects and the execution on Fairchild that we should be able to get definitely within that range. Rajvindra S. Gill - Needham & Co. LLC: Okay. Great. Thank you.

Thank you. Our next question will come from the line of Mark Delaney with Goldman Sachs. Please proceed. Mark Delaney - Goldman Sachs & Co.: Yes. Good morning, and thanks very much for taking the questions. The first question is a follow-up on the Fairchild synergy. You talked about making very good progress with those. Is it just that you're going to be able to realize some of the cost synergies earlier than you previously anticipated, or should we think about upside to the total dollar amount of the Fairchild cost synergies?

Well, we clearly are getting things earlier. We uncover more opportunities as we go along and I would expect, at the right time, we'll be increasing that number. Mark Delaney - Goldman Sachs & Co.: That's helpful. And then, for a follow-up question on the communications market. You talked about, especially in the calendar fourth quarter, strength in China, you said, above seasonal for some of the Fairchild parts. Give me a visibility about how well the shipments that ON was making in the fourth quarter into the handset market, especially China, had been able to sell through, especially now that we've gone through the year.

Yeah. We have seen no inventory backup in that area. And a part of the perhaps a little better Q1 seasonality than normal is because there wasn't the normal clog up in the China market. Mark Delaney - Goldman Sachs & Co.: That's helpful. Thank you very much.

Thank you. Our next question will come from the line of Shawn Harrison with Longbow Research. Please proceed.

Hi. Good morning, and congrats on the results. Just wanted to follow up on the synergies question. I think, last time, you said you were beyond $75 million of OpEx synergies realized and I think around $30 million of COGS synergies. But where are we at, I guess, in early 2017 on that number?

We're still very confident about achieving the $160 million as we have been reiterating in our discussions. And as Keith said, we are a little bit ahead of pace, but definitely confident about the $160 million.

Okay. And then, a brief, I guess, follow-up. Two-fold: One, just the CapEx expectation for the year; and, second, we've been hearing a lot more about wireless charging maybe becoming a bigger thing in the market in 2017. If you could talk about just what you're seeing in wireless charging, please.

So, on the CapEx expectation, our 6% to 7% of revenue model continues being the one we're using.

On the wireless charging side, certainly, we are seeing more interest on the high end phones and some rumors of maybe some major platforms. I'm afraid we're going to have to wait for those announcements to say more.

Thank you. Our next question will come from the line of Chris Rolland with Susquehanna. Please proceed.

Hey, guys. Congrats on the quarter. So, you guys mentioned Fairchild's server power. You guys said that you suspected it could be a growth area for you guys. If you could maybe expand there and then also talk about the upcoming Pearly release. (41:26) Do you get any additional content gains there? Thanks.

Yeah. So, we think we've got an opportunity for about $25 to $30 per server. And for us, it will be all share gains since there was no prior participation. We do see design wins there. I think it's too early to call market share overall, but we should see some nice growth this year in that server area.

Okay. Great. And your comments about early evidence of revenue synergies, I don't know if you guys can quantify that. If you can't, that's fine. But perhaps you can talk anecdotally or give some examples about how you guys are generating these top-line synergies. Are they, like, combinations in product sets or sales teams or new distribution channels that maybe Fairchild had that you guys didn't, or are they direct relationships? How are you – how do you think you're going to be able to generate those top line synergies?

Well, they're coming across very broadly. So, in many cases, you do have sales teams that had exposure to different portions of our customers' business, and that's having a positive impact. In some cases, just our ability to deal with the distribution market was stronger, helping the Fairchild side out. And in many of our industrial customers, they were perhaps more of a Fairchild long-term customer now getting exposure to the offers – offerings from ON has created opportunities. So, it's very broad based and, as we said, very encouraging after the first quarter.

Great. Well, congrats on the progress. Nice quarter.

Thank you.

Thank you. Our next question will come from the line of Kevin Cassidy with Stifel. Please proceed. Kevin E. Cassidy - Stifel, Nicolaus & Co., Inc.: Hi. Thanks for taking my question. On image sensors, you had said that it was up 25% for the automotive. Can you say what percentage of revenue automotive represents?

Approximately 20%?

Yes. Kevin E. Cassidy - Stifel, Nicolaus & Co., Inc.: Okay. Do you have exposure to the drone market?

Yes, we do. It's still very small. Kevin E. Cassidy - Stifel, Nicolaus & Co., Inc.: Okay. And then, on the dollar content in servers, how does that compare to the dollar content in PCs?

It's higher. So, not quite double but around double. Kevin E. Cassidy - Stifel, Nicolaus & Co., Inc.: Okay. Great. Thank you.

Thank you. Our next question will come from the line of Harsh Kumar with Stephens, Inc. Please proceed.

Hey, guys. Congratulations on a great quarter and guidance. I was wondering, you mentioned that you are tracking ahead of synergies so far. I was wondering if you could give us an update on perhaps what is – what are some of the big blocks that need to be accomplished in 2017 with Fairchild?

So, the bigger one in 2017 per se is the completion of the integration of our ERP systems towards the end of the year, and there is still some rationalization of some of the R&D expenses that we're going through. Those are the major two. As we've talked about in the prepared remarks, we should also start seeing some of the benefits on the COGS side for in-sourcing towards the end of the year, but it's mostly a 2018 phenomena.

Got it. Thank you. And then, some of the other companies that have reported, Keith, have talked about worse than normal seasonality because of some handset delays, hence couple handsets. In China, one company has said. And then, one in Korea. I was wondering – you just mentioned that your com business will be down sequentially, which is expected. But I was wondering if you're seeing worse than normal seasonality as well.

No, we're not. We're definitely not seeing worse than normal. I think it has the potential to be slightly better than normal.

Great. Thanks.

Thank you. Our next question will come from line of Harlan Sur with JPMorgan. Please proceed.

Good morning, and congratulations on the solid results. With the two weeks now post Chinese New Year, and I know you guys just talked about trends in the handset segment, I wanted to just get your views on the sell-through trends coming out of that across the industrial and auto end markets in China.

Okay. Our – actually, our post Chinese New Year activity picked right back up to where it was pre Chinese New Year, so very solid and encouraging for not only this quarter, but the buildup for Q2.

Thanks for the insights there. And one of your competitors, they're a top five supplier of power MOSFET, I think they've talked recently about having supply constraints within their business as they transition their manufacturing operations both in the December quarter and here in the March quarter. Wondering, if the ON team has been able to pick up some design win share as a result of some of these perturbations?

Yeah. Normally, those perturbations are really tactical. There are not so much design win. But where you're sharing market share, you'll pick up a little bit more, if one of your competitors have some pickups. And I would put it more in that category rather than a real design change.

Okay. Great. Thank you.

Thank you. Our next question will come from the line of Craig Hettenbach with Morgan Stanley. Please proceed. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Yes. Thank you. A question on gross margin. Can you talk about the performance of Fairchild's gross margin in the December quarter? And then, as you go forward, just kind of the mix between utilization benefits as well as end market mix, what you see is the biggest driver for gross margins?

Sure. So, we don't disclose a separate gross margin for Fairchild as we have now really totally integrated them within our numbers. But in general terms, when we look at it, it should be at or better than what we were expecting. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Okay. And then, just in terms of drivers from here, can you talk about the influence of...

The drivers are the same that we have mentioned. It's the 50% follow-through on incremental revenue throughout the year. It's the mix changes as we continue shifting our production and our revenues towards higher gross margin areas, like automotive, industrial and com. It is also the benefit of the synergies that we're talking about the size and scale. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Got it. And then, as my follow-up, Keith, on – you mentioned industrial a couple of times in terms of strength. Can you talk about just seasonality in terms of the first half of the year tends to be strong versus just any inflection you're seeing from a customer demand perspective?

Normally, we do see a pickup in Q2 and a little bit in Q1. So, usually, first half is a little stronger than second half for industrial. I do think that market itself is growing moderately from a GDP perspective. But we should see some customer gains for the synergies we talked about on the revenue line. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Okay. Thank you.

Thank you. We have follow-up questions from the line of Ross Seymore with Deutsche Bank. Please proceed.

Hi, guys. Thanks for allowing me enter the queue again. Just wanted to get a little more detail on the deleveraging goal. I know you paid down that $445 million convert post the end of the first – or the fourth quarter. But can you just talk a little bit about the progression going forward, the goals you're shooting for and what the blended interest rate is going to be?

Sure, Ross. Thank you. So, our plan – our stated plan is to delever to a target of about two times net leverage, which pretty much should take us the brunt (49:41) of the next couple of years and we'll be aggressively pursuing it with the nice free cash flow that we should be generating every quarter.

And the blended interest rate that you guys are going to have now going forward?

So, the blended interest rate is somewhere in the – our major tranche is the term loan B, which is LIBOR plus 3.25%. So, it's about 4%. All the others are at about or lower than that. So, in general terms, close to 4%.

And I guess, as my last follow-up, because of the com seeing a little bit difficult looking backwards, that two times net leverage that you're talking about a couple of years out, where does that stand now in your definition of the EBITDA from the prior year?

So, if you do it with the pro forma for the – for Fairchild on a full year basis and the synergies, you're looking at somewhere under three times on the net leverage.

Perfect. Thanks guys.

Thank you. There are no further questions in the queue. So, at this time, I would now like to hand the call back over to Parag Agarwal, Vice President of Corporate Development, Investor Relations, for closing comments or remarks. Sir?

Thank you for joining the call today. We look forward to seeing you at our Analyst Day on March 10. Thank you. Bye-bye.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program, and you may all disconnect. Everybody, have a wonderful day.