Hello, everyone, and welcome to the Regal Beloit Fourth Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Rob Cherry, Vice President-Business Development and Investor Relations. Please go ahead.

Thank you, operator. Good morning, and welcome to Regal Beloit's fourth quarter 2017 earnings conference call. Joining me today are Mark Gliebe, Chairman and Chief Executive Officer; Jon Schlemmer, Chief Operating Officer; Chuck Hinrichs, Vice President and Chief Financial Officer; and Rob Rehard, Vice President of Financial Planning and Analysis. Before turning the call over to Mark, I would like to remind you that the statements made in this conference call that are not historical in nature are forward-looking statements. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results and actual results could differ materially from those expressed or implied in forward-looking statements. For a list of factors that could cause actual results to differ materially from projected results, please refer to today's earnings release and our SEC filings. On slide 3, we state that we are presenting certain non-GAAP financial measures in this presentation. We believe that these are useful financial measures to provide you with additional insight into our operating performance and for helping investors understand and compare our operating results across accounting periods and, in the same manner, as management. Please read this slide for information regarding those non-GAAP financial measures, and please see the Appendix for a reconciliation of those measures to the most comparable measures in accordance with GAAP. Now, I will turn the call over to Mark.

Thanks, Rob. Welcome, everyone. Thank you for joining our fourth quarter call, and thank you for your interest in Regal. We'll follow our normal agenda. I'll make a few opening comments. Now, normally Chuck provides the overall financial update, but as you may recall, Chuck Hinrichs will be retiring at the end of March and Rob Rehard will be Regal's CFO effective April 1. So, Chuck will provide a financial update on our fourth quarter and total year results and Rob will cover the impact of the U.S. tax reform as well as our 2018 guidance. Then, Jon will provide color on markets, operations and the performance of our three segments. And then after that, I'll summarize and we'll move to Q&A. Regal delivered a solid top line performance in the fourth quarter with organic sales up 6.9%. In fact, the fourth quarter was the 8th quarter in a row where the organic growth rate improved sequentially. At a segment level, in Commercial & Industrial, organic sales were up 8.7%, with broad strength in the North American commercial and industrial end-markets, oil and gas, and in most Asian end-markets. In the Climate segment, organic sales were flat. Recall that in 2016, our residential HVAC sales were up double digits, making the fourth quarter 2017 comparison difficult. Finally, in the PTS segment, organic sales were up a strong 11.9% for the quarter with robust growth in oil and gas, renewable energy, and distribution. From an operating profit perspective, the adjusted operating margin improved 20 basis points year over year. The operating margin benefited from strong volume, incremental price and productivity, but was held back by commodity inflation and tougher SG&A comparisons. The resulting adjusted earnings per share was up 9.6% year over year. As you may recall, we set a goal…

Thank you, Mark, and good morning, everyone. Sales in the fourth quarter 2017 were $820.7 million, up 8.3% from the prior year. Foreign currency translation in the quarter was a positive 1.3%. Therefore, organic sales increased a solid 6.9% from the prior year. And for the full-year 2017, our organic sales growth was 4.3% above the prior year. Looking at our three segments, the C&I segment had organic sales growth of 4.6%, the Climate segment had organic growth of 3.1%, and the PTS segment had organic growth of 5.3%. In summary, we had solid organic sales growth in the fourth quarter and for the full-year 2017. Our adjusted operating margin in the fourth quarter was 9.7%. Compared to the prior year, our margin was up 20 basis points. This improvement was driven by volume growth with some offset from the price/cost headwind. In the quarter, we took $2.7 million in LIFO expense, consistent with our guidance from last quarter. The LIFO impact by segment is shown on the slide. As you can see, the C&I segment had a LIFO expense partially offset by the LIFO benefit in both the Climate and PTS segments. And finally, SG&A expenses were higher in the fourth quarter 2017 compared to the prior year primarily due to timing in our Climate and PTS segments. Our SG&A expenses for the second half of 2017 show only a modest increase over the prior-year period. In summary, we continue to show improvement in our adjusted operating margin in the fourth quarter. Our fourth quarter 2017 earnings per share reported on a GAAP basis were $1.15. There were three adjustments to GAAP EPS in the fourth quarter. The first adjustment was restructuring and related costs of $1.6 million or $0.02 per share. The second adjustment was the gain on…

Thank you, Chuck. Let me walk you through how the new U.S. tax reform legislation impacts Regal. There are two main points I would like to make. The first point is that our fourth quarter 2017 results include the impact of a $1 million net benefit from the new tax reform legislation. There are large provisional estimates that make up this net benefit as noted on the slide. The combination of the transition tax on non-U.S. earnings and the withholding taxes on non-U.S. dividends is more than offset with the benefit from the revaluation of the deferred tax liabilities. As Chuck previously mentioned, this $0.02 per share benefit is included in our GAAP earnings, but excluded from our adjusted earnings. The second point is that we are estimating a nearly 1% decrease in our effective tax rate for 2018. You'll recall that Regal's 2017 effective tax rate was 21.7% excluding the impact of the new tax reform legislation. We are estimating our 2018 effective tax rate to be approximately 21%. Now, I'll provide information on our full year guidance for 2018. Our guidance assumes low- to mid-single digit organic sales growth for the full year. We're expecting an improvement in our adjusted operating margin for the full year 2018, making this the third year in a row of improvement. We're expecting to see improvements in all three segments from volume leverage, continued simplification efforts, and incremental price. Our full year 2018 GAAP EPS guidance is $5.19 to $5.59. On an adjusted EPS basis, our full-year 2008 (sic) [2018] guidance is $5.35 to $5.75. The adjustments to convert the GAAP EPS to the adjusted EPS are restructuring and related costs of $10 million or $0.16 per share. Also shown on this slide, for your reference, are some key assumptions included in our 2018 guidance. In summary, at the midpoint of our guidance, our full year adjusted EPS is expected to be up 14% over the prior year. Now, I'll turn the call over to Jon.

Thanks, Rob. Good morning, everyone. I'll walk you through each of the segments and give more details on organic sales and operating margin performance. In Commercial & Industrial Systems, sales were $408 million with organic sales increasing 8.7% from prior year. In the quarter, we experienced broad-based sales strength across the C&I end markets. In North America, demand was strong in the commercial HVAC, pool pump, and oil and gas end markets as well as in distribution. Our power generation businesses were up driven by strength in the data center market. Finally, we had strong demand in our China businesses. During the quarter, we implemented a general price increase effective in December. Price in the quarter improved sequentially and was up over prior year. Adjusted operating margin was 6.1% of sales, up 30 basis points from prior year. Volume had a positive impact on our margins but was partially offset by commodity inflation. In summary, we had strong organic sales growth in the fourth quarter, 30 basis points of margin improvement, and more margin improvement is on the way. On the next slide I'll walk you through a number of actions we've taken to further improve the profitability of our C&I business in 2018. There are three areas we're focused on to improve the C&I margins. The first set of actions are related to the simplification activities we undertook in 2017. As you recall, the majority of the 2017 restructuring programs were focused on the C&I segment. Most of these programs were completed in the second half of 2017. These programs will deliver approximately $6 million to $7 million of cost improvements in 2018. The second area of improvement is focused on pricing. We will see improvements from the price increase we implemented in the fourth quarter of 2017, as…

Thanks, Jon. Now, before we go to Q&A, I'd like to briefly summarize our fourth quarter results and our 2017 total year results. First, the fourth quarter. Organic sales increased 6.9%. Our operating margins were up 20 basis points for the quarter and our adjusted earnings per share were up 9.6% as compared to prior year. Now, let's look at the full year. Organic sales were up 4.3% for 2017, adjusted operating margins increased 40 basis points in spite of the significant commodity headwinds. Adjusted earnings per share increased 9.7% and for the 7th consecutive year, we finished with free cash flow to net income greater than 100%. In total for 2017, we repatriated $244 million of cash. We used a portion of that cash to repurchase $45 million of our shares. For the year, we paid down $275 million of debt and reduced our total debt to adjusted EBITDA to 2.4. Finally, you may recall at the March 2017 Investor Day, we laid out our enterprise strategy and communicated our expected performance over the next three years in four key metrics: Organic growth, operating margin, return on invested capital, and free cash flow to net income. We are pleased that in 2017, we made meaningful progress on all four metrics. In closing, we expect that 2017 momentum will continue into 2018. We are off to a good start and encourage that orders were up in all three segments as we entered the year. Our 2018 guidance reflects continued organic growth, our third consecutive year of margin improvement, and a 14% increase in adjusted earnings per share at the center point of our guidance. We will now take your questions.

Thank you. We will now begin the question-and-answer session. And our first question comes from Christopher Glynn with Oppenheimer. Please go ahead. Christopher Glynn - Oppenheimer & Co., Inc.: Hey. Thanks. Good morning.

Good morning, Chris. Christopher Glynn - Oppenheimer & Co., Inc.: On the view towards price/cost neutral by the second quarter 2018, what was the negative gap in 2017 for C&I specifically?

You're asking us what was the value of the price/cost variance for the quarter? Christopher Glynn - Oppenheimer & Co., Inc.: No, for 2017. You're expecting to get to neutral by the second quarter of 2018, which is good. We've been talking about a negative gap throughout 2017. I'm wondering what that gap might have been for the year?

Yes. We haven't sized it for the year, Chris, but what we can tell you is this. We saw a big jump in inflation at the front end of 2017 and then midway through the year. So, the way that two-way material price formulas work is there's a three to six months gap. And then, secondly we announced our price increase in December. So we were in catch-up mode from the second half going forward, and it got sequentially better as we move from quarter-to-quarter throughout the year, and we expected to continue to get sequentially better right through the second quarter where we believe it'll go to neutral. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. Great. And then the midpoint EPS up 14%, you gave below the line guidance. That implies about 9% operating profit improvement at the midpoint. I'm just wondering if you could discuss the general directional thoughts by segments around that midpoint OP growth?

Well, we're expecting improvement in all three segments. Jon laid out for you our views on C&I. The C&I business is obviously a big chunk of the company and, from an operating margin perspective, the weaker performer. So we're quite focused on that and Jon laid that out. Jon also made the comment that we expect slight OP margin improvement in our Climate segment. So, that should give you directionally how we're thinking about it. Christopher Glynn - Oppenheimer & Co., Inc.: Okay. Thanks, Mark.

Thanks, Chris.

Our next question comes from Scott Graham with BMO Capital Markets. Please go ahead.

Hey. Good morning. Good job. Good quarter.

Good morning, Scott. Thanks.

I wanted to maybe ask you to fill in a couple of the blanks for us. You talked about in – you didn't give the same information for all three segments is what I mean. I was hoping you could kind of give us simplification for all three segments and maybe the price/cost expectations sort of along the lines of what Chris just asked by segment for 2018 because I think you only gave that in one segment. Are you able to fill in the other two segments?

Well, I could add a little bit – I can add a little bit of color there, Scott. We previously disclosed that we spent $14 million – roughly $14 million in restructuring in 2017. Typically, we have a two-year payback on that kind of investment. We've commented in the past that 70% of our 2017 restructuring was focused on the C&I segment, so that will give you some direction. And then Jon commented that we expect a benefit of $6 million to $7 million in the C&I segment. So, that will help you kind of figure out where the rest of the spending went and what kind of benefit we would expect by segment.

And that other 30%, Mark, was spent in programs in both Climate and PTS.

Okay. All right, I'll do some of those calculations. And then you've given us some price/cost for two of the segments. Could you kind of tell us where you expect to be – where you are right now in PTS, and if that's negative, when you expect to turn – or neutral in 2018?

Scott, this is Jon. Sure. So, in PTS, price/cost would have been a little bit of a tailwind in 2017 unlike what we saw in Climate and C&I, and we're expecting the same in 2018.

Great. Last question. Thank you, Jon. Maybe to look at things a little bit more holistically, you, a year ago at your meeting, indicated that your operating margin expansion target for, I believe, the legacy businesses to 11% to 12%. And if my calculations are right, we ended 2017 at about 9.7%, up only 20 basis points. And so, I'm wondering if the thinking there is sort of – even if you did a pro rata on that, you would obviously be behind where you'd want to be. Does that mean that this works sort of like an accordion? We got a little squeeze this year on price/cost, but then in 2018 we could expect a catch-up to get to where your goal would land (29:51)? Yeah.

Yes. I understand your question, Scott, so, thanks. So, you're right, in March of 2017, we laid out four metrics, one of them – the good news is we made great progress or meaningful progress, I should say, on all four of them. With regards to adjusted operating margins for the total year, our adjusted operating margins this year improved 40 basis points. We did improve adjusted operating margins last year and we expect to improve adjusted operating margins in 2018. The goal we laid out for ourselves back in March was 200 basis points to 250 basis points of margin improvement over a three-year period. And you are right to say that the second half inflation – we had a 26% increase in copper spot in the back half of the year, and you're right that that slowed down our progress. So, we do have margin improvement included in our guidance and we did comment that we would have low- to mid-single digit revenue growth. So, the margin improvement we are planning for this year or expecting this year is baked into that guidance.

Yes. I'm sorry, Mark, it's just that I'm trying to maybe get a little more granular with you there because it does appear as if the legacy business' margin was only up 20 basis points not – excluding PTS and the issue there obviously continues to be C&I. So, I guess I was hoping to hear a little bit more about how we get C&I away from beyond the $6 million or $7 million worth of sort of cost that were taken out that benefit 2018. What's next there? It's just that that margin is just really kind of holding you guys back.

Yes. So, I understand. I apologize. I got what you're saying. So, you're right, and Jon did lay out the three things that we're focused on in 2018 to try to drive the improvement in the C&I segment. So, he commented on the fact that our simplification programs, the majority of our investment there is focused on C&I. He commented on incremental pricing actions. And Jon, do you want to finish up on that one?

Yes. So, the price increase that we implemented in December, we expect to see the benefit of that in our 2018 margins, as well as the part of the business that is exposed to the two-way material price formulas. Those will continue to improve with the lag of the copper increase that we saw in the second half of 2017. That will help our pricing in the first half of 2018. We expect price/cost to turn neutral by the second quarter, so no longer being a headwind to our margins. That will be a big help in C&I. And then the last piece of it is the efficiencies, the productivity from our manufacturing operations. We had some challenges clearly in 2017 that hurt us. We are expecting better performance. We have a lot of focus in that area in 2018. So, the $6 million to $7 million from simplification is just a portion of the benefits we're expecting to see in the C&I segment this year.

That's good to hear. All right. Thank you.

Thanks, Scott.

Our next question comes from Robert McCarthy with Stifel. Please go ahead. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good morning. Congratulations on a good start, and a good end of the year.

Thanks, Bob. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Can you hear me, okay?

Yes. Thank you. Good morning. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Yes. I guess – and I've been jumping off a couple of other calls, so there has been some excellent questioning, some of which I probably missed. But in any event, in terms of getting my arms around price/cost, is there anything you'd say about your kind of organic growth rate? How much will be price for the full year 2018 and any kind of cadence around that for the year? In other words, how much of a contributor will pricing actions be 1Q, 2Q, 3Q, 4Q? I know it's probably something you're not going to really comment on, but I want to see if I can get any kind of texture around that because it might just help level set the model.

Okay. Thanks, Rob. So, first, let's break it into two pieces. The first one is the two-way material price formulas. So, we typically have a three to six-month gap in the (34:08) two-way material price formulas which represent 30% of the total revenue of the company. And so, as we head into the second quarter, those will be – have caught up from the second half, big increase in copper that we saw, those will have caught up. And then there's the second piece of it which is the general price increase which went into effect in December and we'll see the benefit of that throughout the year. The price increase was in all three segments. And Jon, 3% to 5% was...

Yes. Typical range of the price increases do vary by product but was in the 3% to 4% range. And as Mark said, Rob, we talked a lot about the price increase that went into effect in December in C&I. But we also had price increase, general price increase in our Climate and our PTS segment as well, but it was in that same range in the fourth quarter. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: So, I guess on the basis of the material – well, two follow-up questions there. What will be your effective – on the general price increases, what will be your typically effective realization historically?

On the two-way material price formulas, they're contractual. So... Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: No, no. I'm talking about the general price increases. What is your typical experience for the price realization?

Yes. I'm not going to get into anything specifically related to price. However, I made the comment earlier that the price increases are sticking. So, it should... Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Okay, okay. All right. All right. Nice try. Moving on, maybe you could just talk about in the context of obviously a lot of conversation around C&I and simplification and incremental margins. Can you just level set for us what should we be expecting for incremental margins kind of the next couple of years across each one of those segments, and level set us for – and this is the word of the day, I guess – for 2018 in terms of how we're thinking about what's embedded in the guidance for incrementals?

Yeah. So there's two key drivers that kind of held us back on incremental margins in 2017. The first was the big jump in inflation again that happened in the second half of the year. And the second was the demand was very robust and we did, as we mentioned back in the second quarter, have some efficiency challenges ramping up our facilities. So as we head into 2018 without those two headwinds, we would expect our normal incrementals which is roughly 25% in the Climate business, roughly 30% in the C&I business, and roughly 35% in the PTS segment. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Okay. And then the last question, and then I'll move on. Obviously, there has been a lot of talk around trade rhetoric and the withdrawal from NAFTA. I mean any kind of conceptual view of how you're looking at that risk and what that would mean for you in terms of plant footprint pricing, that kind of thing?

Obviously, anything that deals with NAFTA definitely got our attention because we have a relatively large footprint in Mexico serving our customers. But I would say this that our view is we look at who we compete with and we don't tend to compete with people that are in the U.S. We tend to compete with people who are also located in Mexico or who are located outside of Mexico. So our sense is, is that our competition would have similar challenges coming out of the NAFTA agreements and my guess is, it would result in inflation. If there were significant tariffs put on us or put on our competition that would simply result in inflation. That's our best view. Robert Paul McCarthy - Stifel, Nicolaus & Co., Inc.: Good Luck, Chuck.

Thank you, Rob.

Thanks, Rob.

Our next question comes from Josh Pokrzywinski with Wolfe Research. Please go ahead.

Hi. Good morning, guys.

Good morning, Josh.

So I know we've come after this price/cost question maybe a few ways. But I guess at the midpoint of your guidance, EBIT is probably up somewhere in the neighborhood of $20 million and I don't know if it's right to think about LIFO as an add-back but it doesn't seem like it has to recur. So call it $6 million of LIFO, $6 million of restructuring benefits, I think a few million bucks from supply chain interruptions in Climate. The core number there really isn't that large for EBIT growth year over year. If I think about a normal incremental margin across the business of say 20%, it seems to imply that there is a price/cost headwind of roughly $25 million and you're saying it's all in the first half, is that arithmetic correct I guess just as a starting point?

Well, you're right to say that we expect that price/cost will be neutral and that will be a headwind in the front half of the year. So assuming no more inflation, that should burn off throughout the year. But we had 40 basis points of improvement in 2017, commodity inflation held us back, and we included in our guidance continued margin improvement with low to mid-single digit organic growth rates for the year. So everything that we're assuming from a commodity headwind is baked into that guidance.

And I would just say, Josh, this is Jon, the math that you walked through there, I didn't catch all the pieces. But the number you quoted for a price/cost headwind in the first half seems too high.

Okay. We can follow up online (sic) [off-line] and maybe what some of those deltas look like. And then just I guess circling back on the Climate business, how should we think about mix from here? I know that there has been some share wiggle over the past few years and you had the Middle East flare up more recently. Is that business kind of, to use Rob's word again, level set on some of the share mix and regional dynamics as we enter 2018?

Well, we feel like we're in a good position as we go into the FER world. 2018 at the back, our customers are – at the back half of the year, our customers are going to start thinking about how to position their furnace business for the 2019 legislation. And with the products we're putting out, we think that we're positioned well for that battle with our competition, and that substantial change in energy legislation. So we had a pretty good year with 3.1% growth in 2017 and we're expecting another year of growth in 2018.

Got you. And then just one final one, might help us calibrate some moves going forward. I think HRC is around $730 a ton today, up a lot in January obviously. Is that roughly the level that you guys have contemplated in your guidance?

Yeah, you're thinking about it the right way. The good news is that our two-way material price formulas will adjust regardless of what the price is. But yes, the copper price that we're at today is what is assumed in our guidance. We've taken that into – I should say we've taken that into consideration. So thanks, Josh.

Okay, perfect. Thanks a lot, guys.

Our next question comes from Jeff Hammond with KeyBanc. Please go ahead.

Hey. Good morning, guys.

Good morning.

Just on the LIFO, can you just explain where you had a couple with benefits and a couple – and then the one with the big expense and then do we build any kind of LIFO adjustment into 1Q?

Morning, Jeff. This is Rob Rehard. I'll take that one. So, as we explained in our remarks, we had a $2.7 million LIFO impact that's similar to what we had guided. Chuck mentioned there were some variations in the impact of LIFO by segment. Obviously, when you have inflation, you expect a LIFO expense would happen. The good news – and that's what happened in C&I. The good news is that our Climate business was able to offset the inflation, in fact, have a LIFO benefit because the manufacturing facilities performed well. The impact going forward from a guidance perspective we're not at this point anticipating a LIFO impact for 2018.

Okay. And then can you quantify what you think the inefficiency headwind was in 2017 that goes away?

We haven't done that work, Jeff, but we did comment that our manufacturing facilities in both C&I and Climate were performing well as we exited the year.

Okay. And then the 30% incremental in Climate that you called out as normal, does that include the $6 million to $7 million saves because it just seems like that hasn't been achieved in quite some time and it seems like you're certainly putting something lower than that into the guide?

I think, Jeff, I'll let Jon answer this, but you used the term Climate, I think you meant C&I?

Yes, yes, C&I, sorry.

Yes. I'll let Jon answer the question.

Yes. I think clearly in 2017 we didn't get the incrementals that we expected to get in our C&I segment. So, as Mark said, we're very focused on improving the margin performance of our C&I segment in 2018. That is the way we're thinking about the incrementals for C&I on a go-forward basis. The same expectation we've had historically is what we expect to see even though we didn't perform to that level in 2017.

Okay. Thanks, guys.

Thanks, Jeff.

Our next question comes from Walter Liptak with Seaport Global. Please go ahead.

Hi. Thanks. Good morning. Good quarter.

Thanks, Walt.

I want to ask about C&I and just if you could refresh our memories on how much is general price and how much is two-way price formulas?

So, I'll take a shot at this and then Jon can follow up. On the two-way material price formulas, it's about 30% of the company and it's split – that 30% is split between Climate and C&I. So, since C&I is a bigger segment, it has more of an impact on Climate than it than it does C&I. You want to – is there anything else I...

No. That sizes it up right, 30% of the total company's revenue driven by the two-way material price formula is roughly split – that revenue is roughly split between the C&I segment and the Climate segment. So, the rest of C&I is exposed to what we do with general pricing.

Okay. And the December general pricing, you mentioned that it was being affected by the market, so presumably the rest of the competitors are taking up price as well. I wonder if you could talk about where you're getting the best flow through on price. Is it on oil and – O&G, is it in general distribution?

I would just say that we have – it's broadly implemented, and we're getting progress on our price increases broadly. I wouldn't say it's any better or worse in any particular segment.

And on a global basis as well.

Okay. And what's your flexibility during 2018? The markets are recovering, hopefully the markets are tightening up a little bit for supply. Can you take up prices later on in the year?

Well, if we had a big jump in – another big jump in commodities, we certainly would be looking at it.

Okay. All right. Thank you.

Thank you, Walt.

Our next question comes from Chris Dankert with Longbow Research. Please go ahead.

Hey. Good morning, guys. Thanks for taking my questions.

Good morning, Chris.

I guess just looking at Climate, I know the organic growth rate you're facing some stiffer comps there. But I guess I was expecting a bit more benefit from the increased commercial efficiency standards in the U.S. I guess, is that just not a huge part of the mix, or kind of how should we think about those increasing standards helping out Climate to the rest of 2018 here?

Yes. Chris, this is Jon. I would say that we did see a little bit of positive mix in the quarter on our Climate business, which was nice to see. So, we look at high efficiency product versus our standard products that was a little favorable in the fourth quarter. So, even though we didn't see overall revenue growth in the quarter, we did see that as a positive contribution. I would say that those standards are probably a bit more impactful to our C&I segment than to our Climate segment because of the commercial equipment aspect and the kinds of products that go into that equipment. With the upcoming change for gas furnaces, we'll see that impact in our Climate segment. However, depending on what happens potentially with the pre-build, we're expecting more of that to be in 2019.

Got it. Got it. Thanks. And then, I guess looking at PTS, even if you kind of adjust out the big, I think it was like $5 million of FX benefit in fourth quarter of last year on the EBIT line, it looks the incrementals were closer like 25%. I guess, is the gap between the 25% and your kind of targeted 35%, is that just labor inflation or can you help us bridge that difference?

I would say that a big part of it was the timing of the SG&A expenses. For the year, our incrementals were 30% in PTS, so not quite where we'd like them to be because we are targeting more in the line of 35% incrementals in PTS. So, we were held back a little bit in 2017 from that target. We did make some investments of course in SG&A to help grow the business. We, by the way, feel very good about those investments and helping to drive organic sales growth in the segment, as well as in the company. But in the fourth quarter, our view is that the margins in the fourth quarter were really more related to the timing especially in prior year with the SG&A expenses.

Understood. Thanks so much, guys, and congrats again on the quarter.

Thanks, Chris.

And our next question comes from Ryan O'Donnell with Baird. Please go ahead. Ryan O'Donnell - Robert W. Baird & Co., Inc.: Hey. Good morning, guys. Thanks for taking my question.

Good morning, Ryan. Ryan O'Donnell - Robert W. Baird & Co., Inc.: So, just taking a step back on the 2018 margin. If you could think about first half versus second half in terms of year-over-year expansion with volumes being better in the first half, with price/cost probably better in the second half, is there any way you can kind of parse that out for us?

We haven't laid it out in terms of any particular guidance on a quarterly or half to half basis, Ryan. But the way we've – as Mark mentioned, we are expecting to see a little better organic sales growth in the first half as compared to the second half in 2018, simply because of the comparisons to prior year. On margin expansion, we're expecting to see margin improvement throughout the year as you look at margins on a year-over-year basis. Ryan O'Donnell - Robert W. Baird & Co., Inc.: Got you. That's helpful. And then last one for me, just any pre-buy that you guys may have seen around kind of the price increase in December obviously in the non-material price formula side?

Are you talking about for 2017, Ryan? Ryan O'Donnell - Robert W. Baird & Co., Inc.: Right. Yes, in the fourth quarter, any pre-buy that you may have seen kind of ahead of that December price increase?

Ryan, our view would be if there was one, it was small and not a significant impact to revenues. Ryan O'Donnell - Robert W. Baird & Co., Inc.: Got you. Appreciate the time, guys.

Thanks, Ryan.

And this concludes our question-and-answer session. I'd like to turn the conference back over to Mark Gliebe for any closing remarks.

Thank you, operator. I would like to add one comment before we close today. This will be the last Regal earnings call where Chuck Hinrichs will be a participant. Chuck has been a key part of the Regal team for nearly eight years, and we sincerely appreciate his contributions and dedication to Regal. We wish Chuck and his wife, Linda (51:21), all the best in retirement. Chuck will be with us through the end of March, so you can Chuck at his Regal email until that time. Chuck, thank you very much for all that you have done for Regal. And to everyone on the call, thank you for your questions and for your interest in Regal. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.