Ladies and gentlemen, thank you for standing by, and welcome to the TE Connectivity Q3 2018 Earnings Call. At this time, the telephone lines are in a listen-only mode. Later, there will be an opportunity for questions-and-answers with instructions given at that time. And as a reminder, today's call is being recorded. I'll now turn the conference call over to your host, Vice President of Investor Relations, Mr. Sujal Shah. Please go ahead.

Good morning and thank you for joining our conference call to discuss TE Connectivity's third quarter 2018 results. With me today are Chief Executive Officer, Terrence Curtin; and Chief Financial Officer, Heath Mitts. During this call, we'll be providing certain forward-looking information, and we ask you to review the forward-looking cautionary statements included in today's press release. In addition, we will use certain non-GAAP measures in our discussion this morning and we ask you to review the sections of our press release and the accompanying slide presentation that address the use of these items. The press release and related tables, along with the slide presentation, can be found on the Investor Relations portion of our website at te.com. Finally, due to the increasing number of participants on the Q&A portion of today's call, we're asking everyone to limit themselves to one question to make sure we can give everyone an opportunity to ask questions during the allotted time. We're happy to take follow-up questions, but ask that you rejoin the queue and ask second question. Now, let me turn the call over to Terrence, for opening comments.

Thanks, Sujal, and thank you, everyone, for joining us today to cover our third quarter results and updated outlook for 2018. Before I get into the earnings slides, let me briefly recap our quarterly results and full year guide against the elements of our strategy and business model. Our results in the quarter demonstrate successful executions, with ongoing investments to support an attractive and growing demand pipeline and another quarter of growth above markets in which we serve. On the top line, we delivered 6% organic growth in the third quarter and we also expect 6% organic growth at our midpoint for the full year and this is at the upper end of our 4% to 6% long-term organic growth target. Our revenue growth continues to be driven by secular trends and our focus on co-creating with our customers by leveraging our leading global position in this increasingly connected world and this is enabling TE to consistently outgrow our end markets. On the bottom line, adjusted earnings per share increased by 15% and we're raising the midpoint of our full year adjusted earnings per share guidance which also reflects 15% growth over the prior year. This growth is consistent with our annual double-digit earnings growth target and our business model. From a capital perspective, our strategy remains balanced through share buybacks, dividends, as well as a disciplined approach on acquisitions, and we continue to invest to support the organic growth opportunities in our business while maintaining ROIC levels in the mid-teens. So if you could, let's move to the slides, and I'll start with slide 3 to review the highlights from our third quarter. We did deliver performance above our guidance with double-digit growth in revenue as well as adjusted earnings per share. Sales were $3.8 billion representing 12% reported…

Thank you, Terrence, and good morning, everyone. Please turn to slide 8, where I will provide more details on the Q3 financials. Adjusted operating income was $628 million, with an adjusted operating margin of 16.7%, leveraging the strong growth of 6%. GAAP operating income was $558 million and included $65 million of restructuring and other charges and $5 million of acquisition charges. For the full year, I continue to expect the restructuring charges of approximately $150 million, driven primarily by activity in our Industrial Solutions segment, as we optimize our footprint and make structural improvements in SG&A across the company. This is consistent with what we've talked about in the past. Adjusted EPS of $1.43, up a very strong 15% year-over-year, is driven by sales growth as well as the benefit from currency translation. GAAP EPS was $1.29 for the quarter included restructuring and other charges of $0.13 as well as acquisition related charges of $0.01. The adjusted effective tax rate in Q3 was 16.9%. Looking ahead, we do expect a sequential increase in rates in Q4, resulting in our full year adjusted tax rate in the 18% to 19% range. Longer term, you should continue to view our tax rate at approximately 20%. Now, if I get you to turn to slide 9, adjusted gross margin in the quarter was 32.4%, with year-over-year decline driven primarily by SubCom where Terrence outlined the moving pieces earlier. Given the relative strength of the rest of our portfolio, I'm pleased that we were able to offset SubCom driven margin pressure and maintain our overall adjusted operating margins from 16.7%. In the quarter, cash from operations was a strong $800 million and free cash flow was $504 million. On a year-to-date basis, cash from operations is up 5% versus last year, and year-to-date…

Thanks, Heath. And let me get into guidance and we'll start with the fourth quarter on slide 10. When you look at the fourth quarter, we expect fourth quarter revenue of $3.59 billion to $3.69 billion and adjusted earnings per share of $1.31 to $1.33. At the midpoint, this represents reported and organic sales growth of 5% and adjusted earnings per share growth of 6%. We do expect our fourth quarter look like a lot like our third quarter, with the exception of currency and tax impacts. When you think about the recent strengthening of the U.S. dollar, we now expect the year-over-year currency exchange headwind of approximately $50 million and $0.02 in the quarter. Currency has been a tailwind for the first three quarters of the year, so that is going to flip. In addition, our expected tax rate has a headwind of $0.02 versus the prior year, so operationally, quarter four looks pretty similar to quarter three. If you move by segment, we expect Transportation Solutions to grow high single-digits on both a reported and organic basis, driven by all three businesses. In Industrial Solutions, we expect to grow mid-single-digits organically, with growth across all businesses in line with our long-term model. And in Communications, we expect to be down low single-digits, with continued above market growth in both data and devices and appliances and we expect SubCom revenue being at similar revenue levels as we just had in the third quarter. So let me turn to the full year and if you can move to slide 11, please. For the full year, we now expect full year revenue of $14.58 billion to $14.68 billion, representing $1.5 billion of increased revenue year-over-year. At our midpoint, this represents 12% reported and 6% organic growth. If you take the $1.5…

Allan, can you give the instructions for the Q&A session?

Absolutely. Our first question will come from the line of Craig Hettenbach with Morgan Stanley. Go ahead, please. Craig M. Hettenbach - Morgan Stanley & Co. LLC: Yes, thank you. A question for Heath on the Industrial margins, the 150-basis-point year-over-year increase looks like mostly probably operating leverage in the business, yet you're talking about some of the restructuring activities and more of a forward look in terms of footprint. So could you just talk about what you're seeing today and then how you envision Industrial margins going forward?

Craig, thanks for the question. Honestly, the improvement that you've seen not just in this quarter, but for the full year outlook for 2018 for our Industrial margins, there is some belt tightening in there, but largely, we're seeing the benefit of the organic growth flow through. And as the businesses, as you know, we got all business units growing in that segment. I would tell you that the charges that we're incurring today relative to restructuring generally have about a two-year payback. Some of these are outside the U.S., which tends to lengthen the payback period as you know. So the restructuring activity and the benefit from those, which we've talked pretty extensively about to all of you, really starts to kick in more in 2019 and much more pointedly in 2020, as some of these big facility moves are completed. So keep in mind that what we've talked externally about is about a 300-basis-point journey on operating margin expansion there. Certainly, we attributed about two-thirds of that towards footprint optimization and about a third of that through the flow through on the growth side. We're seeing the growth side of it now and the restructuring piece is yet to come. But we're pleased with the team's progress there, there's been a real heightened focus.

Okay, thank you, Craig.

And next, we'll go to the line of Joe Giordano with Cowen. Go ahead.

Hey, guys. Good morning. This is Tristan in for Joe. You had a very strong operational result that was somewhat, I guess, masked by the SubCom business. It was expected but (27:07). Are you looking to maybe be a bit more proactive on a potential divestment there?

Thank you for your question. And as you all know that, while it's a good question, it's not a new question. Our SubCom business is a unique asset that I've always told you about. While it's a good business, it is a business that is unique. So it's a business we feel, as long as we own it, we have to operate it. But it is something we always look at if there were offers on it. Clearly, we've said this for a long time, there hasn't been. But as we own it, it needs to be run. And when you look at this year, we expected the business to be down overall, going from a very healthy level of $1 billion. And we told you earlier $700 million to $800 million. Certainly it's at the low end of that range. We feel good about the cycle that we're in. I mean, it is a healthy cycle, and you see that in our backlog. But clearly, the disappointment this year in that business is the program delay that we teed up early in the year that is impacting our margin. It's also slowed things down. We do expect that program to wrap up in 2019. And we feel, as we go forward, it will be performing more like it has performed in the past than it is this year. So feel good about where the business is positioned to where it is in the cycle. Certainly, this program delay that we've had around new technology has created a headwind that I'm very proud that the rest of the business has been able to make up for, as we've had margin expansion in both Transportation and a strong step that Heath talked about to the prior question. So we'll continue to work through it. We always look at alternatives for SubCom, but I've been saying that since I've been CFO here for 10 years. So thanks for the question.

Thank you, Tristan. Could we have the next question, please?

We'll next go to the line of David Leiker with Baird. Go ahead. Joe D. Vruwink - Robert W. Baird & Co., Inc.: Hi. Good morning. This is Joe Vruwink for David.

Good morning. Joe D. Vruwink - Robert W. Baird & Co., Inc.: When we look at Transportation organic growth and try to reconcile what that is relative to end market production, it looks like your above market growth is going to be around 9% this year. It was 9% last year. So just relative to the guidance of 4% to 6% content growth, it certainly seems like it has been better than that. It can sustainably be better than that. Why can't TE sustain a high single-digit level of out-growth, above and beyond this 4% to 6% target?

Thank you for your question. And when we look at it, as we just shared with you back in our Investor Day, we think long-term that 4% to 6% is right above production. When you look at this quarter, production was a little bit stronger this quarter. It was up about 400 basis points in the quarter, and we grew about 10% in automotive. I think the key is we continue to invest in the design wins that we have. You're going to continue to see and even if we think about like next year, we still view the world is going to have about a 2% production environment. So when you sit there and you think about that 2% production environment similar to this year, I think you would be in the high single-digits in that type of production environment based upon the momentum we have in the design wins and that we're investing behind. So when we look at it, we feel the momentum we have, not only from what we do and the wins we have, but also where we're globally positioned to capitalize for any little moves that happen on global production. It's one of the great things about our businesses, our global deployment and our customer breadth.

Okay. Thank you, Joe. Could we have the next question, please?

That will come from the line of Christopher Glynn with Oppenheimer. Go ahead. Christopher Glynn - Oppenheimer & Co. Inc.: Yeah, thanks. Good morning. So back to SubCom, I think the production and approval process has been resolved relative to that project. So just wondering how the visibility is shaping up for magnitude, degree, and certainty around margin tailwind for that segment into next year, maybe on a neutral rev basis? And then separately, view to backlog converting to some revenue lift there.

So a couple of things. The backlog is strong as I've mentioned, around $1 billion. So I think when you look at next year, I think it's fair to say to your assumption, it looks a lot like this year at the top line. And what we expect that you'll see is as this program works off, it is a program that will work off in 2019, you will get the margin lift. And I think you need to think about it as the Communications segment. And you'll see segment margin to move up from what are right now sub-12% back up into the mid-teens that we've talked to you about for the segment. And you'll see that in the next year.

Okay. Thank you, Chris. Could we have the next question, please?

And that will come from the line of Wamsi Mohan with Bank of America.

Yes, thank you. Good morning. Terrence, can you address what some of the puts and takes were in the Transportation segment as it pertains to margins? Did it take down a bit in the quarter? You called out some of the investments to drive future growth. I was wondering if you can help be a little more specific on what those are? And any color on the magnitude of those investments and possibility of ongoing higher base of investments. Thanks.

Yeah, thanks, Wamsi. I guess, first of all, I want to be clear. Our margin in Transportation came in where we expected. So I don't believe it was a surprise to us where the margin came in at. And we do expect for the year it'll be at that 20%, which we've always told you plus or minus 1 point where it would be. So I feel actually good about the margin in the business. There are investments that we've talked to you about. Heath talked about CapEx increasing up to 6%, that's primarily in our Transportation business and, clearly, when we spend capital, that goes in to gross margin. But I want to go back maybe to the question that was asked earlier. The organic engine that we've had in automotive is very significant. Certainly, we talk about it in percentages, but just to frame it a little bit, we grew organically our Transportation business by $700 million last year. We're doing it by $800 million this year. And that's really a north of 20% increase in that one business over the past two years, if you really go back. And we are, having to make sure we keep up with those type of demand profiles, and also putting the capacity in for the pipelines we have. So we have increased up CapEx, we have increased up R&D and, now, you'll see that in quarters, you'll have timing off a little bit, but we are completely committed to the 20% plus or minus, and we're going to continue to make the investments for what is the best return which is organic growth, and we've been doing that and we're going to continue to highlight that for you. But thank you for the question.

Thank, you, Wamsi. Could we have the next question, please?

And that will come from the line of Shawn Harrison with Longbow Research. Go ahead, please.

Hi, morning everybody.

Hey, Shawn.

Just on kind of the third quarter versus fourth quarter dynamics, particularly maybe in Transportation, but in any of the other businesses, do you feel as if there was any maybe pull forward of demand? And the reason I ask that is it feels like seasonality is coming back into the business maybe that we haven't seen over the past 12 to 24 months.

Shawn, this is Heath. There is some typical seasonality specifically in auto that generally makes Q4 a little bit lower than Q3. But generally, as we look at it, our third quarter and our fourth quarter look pretty similar in terms of our outlook. The challenge is in terms of the earnings side is that FX turns on us and goes from being a tailwind to a headwind, and then, tax is significantly higher in the fourth quarter, so the two of those together worth about $0.10 sequentially in terms of the third quarter versus the fourth quarter. Otherwise, when you kind of look around the other businesses, they look pretty similar and we're just battling some of the, I'll say, non-operational pieces and, obviously, some of the things from SubCom that Terrence has already highlighted.

Okay. Thank you, Shawn. We have the next question, please.

Yeah, sure, that will come from the line of Amit Daryanani with RBC Capital Markets.

Yes. Thanks a lot. Good morning, guys. I guess...

Hi Amit.

Hi. Terrence, I think you talked about $1.8 billion of total design wins you've had and I think there was a commentary on sensors specifically. What's the cadence do you think of that revenues under ramp over time? And I realized you've had really good growth, sensors have been 7%, 8% for a few quarters, but do you see that stepping up to maybe double-digits as you go next year given the backlog and the design wins you're sitting at?

Yeah. When you look at it, Amit, thanks for the question, and I think it's very similar to what we've been telling you. What's great is the amount I'm talking about is an automotive online. So we also – you saw on the growth outside of automotive and sensors was very strong as well. But in automotive, you know how these programs come in. You start winning them, they take two, three years to actually start from production and they ramp, and so, as we told you back at Investor Day is we do expect you're going to start seeing double-digit growth in our automotive as these layer in. They will layer in over time. Certainly, programs ramp over time. And, in many ways, it supports how we're going to get north of $5 per vehicle in sensor content that we talked to you about. So I think the momentum that we've had just continues to be that the pipeline that we built, the technologies that we acquired with MEAS are we're able to get to our commercial teams and really make sure we're creating value and that's layering in and I feel very good about the momentum to really make sure of that sensors in automotive, you're going to continue to see nice growth as these things come into production and get built to our customers.

Okay. Thank you, Amit. Could we have the next question, please?

We'll go now to the line of Jim Suva with Citi. Go ahead.

Thank you very much.

Hi, Jim.

I know you gave some nice comments on the global tariff and M&A, but I wanted to see if you had any actually discussions or actually any actions with some of your customers. I know like in the Industrial segment, there's been some recent news of some industrial companies talking about higher cost of goods sold by steel and aluminum tariffs. Are they talking to you about changing the location of manufacturing, supply relationships or anything going on actively on that front? Thank you.

Yeah, Jim, thanks for the question. And to give some example, so number one, we are not a steel user. As you all know, we start from base metals, particularly copper and gold, and certainly, resins that we use and certainly, that's what our engineers use as a lot of our basic building blocks. So on the input costs while we have a little bit of tariffs, it's not that big. Really, the discussions we have with our customers and you know our model. Our model is to design close to our customers, and then, be aligned to their supply chain. So in regard to where we serve our customer directly, there is lots of discussions around supply chain. Do we need to be moving some of production to certain parts to as they look at their supply chain, as well as just the whole logistics flow, because there are logistic flows that I think people are trying to understand is there a way to work the tariffs that away. So they are real live discussion. As you know, it's very fluid. In areas where it is unavoidable, then we have tariffs or things that we go through our channel partners, there will be surcharges for tariffs that we cannot mitigate through manufacturing moves or supply chain moves. And that will be a surcharge, if we would do out or it's unavoidable. So that's where it is right now. As you can imagine, with somebody that sells more than 500,000 discrete SKUs, it is very tactical right now. It's very much a lot of engagement with our customers, which I feel very fortunate with our closed business model with our customers. We're going to work with them to make sure that they can stay competitive and if we have to move some things around for the long-term, we will. So, thanks, Jim.

Thank you, Jim. Could we have the next question, please?

We'll go to the line of Matt Sheerin with Stifel. Go ahead. Matthew John Sheerin - Stifel, Nicolaus & Co., Inc.: Yes, thanks, and good morning. So question on regarding some of the supply chain issues that we're hearing about specifically component shortages, capacitor shortages whether seem to be hitting some of the EMS companies. Are you seeing any rescheduling or any mismatch of parts to customers that may be affecting your business?

No, Matt. So, as you know, we don't do those passive. Matthew John Sheerin - Stifel, Nicolaus & Co., Inc.: Yeah.

So we've not seen any rescheduling. Clearly, there is shortages in certain areas. Capacity is sold out. We've not seen any impact and you can see that in our orders, we've not seen demand impacts. As we told you before, our lead time overall has remained relatively stable, but we do have some pockets instead of product categories that we are extended just due to how the demand has increased. But I would say that's a minor part of our business, but we have not seen any demand changes where our customers told us, because they can't get a capacitor or another type of passive that they want us to stop shipping or slowdown. We have not seen that in any material way.

Okay. Thank you, Matt. Could we have the next question, please?

We'll go to the line of Mark Delaney with Goldman Sachs. Go ahead, please. Mark Delaney - Goldman Sachs & Co. LLC: Yes, good morning. Thanks for taking the question. Question on subsea. I think it had been a 50 bps drag to the corporate margin last quarter and if I heard correctly, Terrence, you said it's about 90 bps this past quarter. So if I better understand, the reason is maybe a bit larger of an impact now and just to clarify on how we should think about that improving. Should we think about the magnitude of the impact of the 2018 on a somewhat linear basis, as we move through fiscal 2019 or does the magnitude stay at this kind of a level, and it's not until the program is done that it then goes away?

No, Mark. Mark, let me add some color and thanks for your question. The difference between 90 basis points and the 50 basis points is really – so our SubCom business had a great quarter last third quarter. It had $270 million of revenue. So that 90 basis points I referenced was really a year-over-year reference of what it did in TE's margin year-over-year. So that's what that 90 basis points is. The 50 basis points, you're right, that's the program delay impact that we've been seeing at the total company level what the impact has been. So that 90 basis points is very high volume last year, certainly, good flow through on it, just getting the volume more normalized, but the 50 basis points is correct on the program delay. On linearity, I think when you look at it, it's going to be as the program wraps up, and that program will wrap up. And what you'll have is as that program wraps up, you'll see margin increase and work its way up back to where we expect the segment to be, and that'll be through 2019. Mark Delaney - Goldman Sachs & Co. LLC: Okay. Thank you.

Thanks, Mark.

Thanks, Mark. Could we have the next question, please?

Pardon me. We'll go to the line of William Stein with SunTrust. Your line is open.

Great. Thanks for taking my questions. Two quick ones. First, I think you mentioned resins a moment ago. Our contacts have indicated that costs for these and maybe some other input materials have been rising. So I'm not talking about shortages of caps that would be sort of a not related to your supply chain is related to your supply chain, and I'm wondering if that's impacting margins at all and whether you're adjusting prices in response to that through the channel. Thank you.

William, this is Heath. When we went out with our original guidance for the year, we talked some about what was embedded in our guidance and that was about $0.10 a share of pressure on our earnings relative to commodity inflation. And as you know, we have hedging programs in place and everything, so you don't see a ton of volatility up or down based on the way it kind of smooths into our cost structure. However, your point is valid. There is some pressure out there on some of the commodities, metals and resins, and we're – its impact is – $0.10 is probably grown to closer to $0.12 as you see reflect in our results where we've got productivity programs in place and we're going after it, but there's a little bit of additional headwinds, especially as we exit the year on that. But the team is focused. We've got a world-class supply chain organization that's going after it and challenging some of those things. And where we do have more of those types of pressures that we have to realize, certainly, our commercial teams are in sync on that relative to price increases. And you would expect price seem to stay pretty similar, but we have opportunities to raise price, especially through our distribution channel and those types of things. Those are proactively being done, some of it in context of the commodities inflation, the input side. And then, onboard, we have direct relationships. Certainly, those are fluid dialogues, but it's not lost on our customers either in terms of how we recover there and/or sharing some of the pinch points, but we're geared up pretty well to handle these types of pieces. And as we get closer to 2019, William, what I would say is certainly, we'll quantify that again. But you shouldn't expect us to be using this as a major excuse, because we're going to be ramping up our material sourcing programs as well to offset some of those pressures. But I appreciate the question.

Thank you, Will. Next question?

We'll go next to the line of Deepa Raghavan with Wells Fargo. Go ahead.

Good morning.

Hey, Deepa.

Hey. Good cost controls on the SG&A line. Just curious if those are from some of the structural changes you were targeting? Or was there something temporary this quarter, example, belt tightening just given forex headwinds, et cetera?

Deepa, I appreciate the question. This is Heath. If you're looking at our operating expenses in general, whether that's SG&A, a component of that, or in total, certainly, we're tightening the belt. And we've talked about some of the activity that we've done to reduce structurally our SG&A. That still is in place and that will continue forward as we're looking at a lot of different opportunities and there's a high focus on that. Having said that, I think the quarter came in a little bit lighter than what I thought. I would look at it more on a full year basis and the relative improvement that we're targeting. We've talked about taking a full 100-and-change basis points out of our operating expense structure. Certainly, we're ahead of that in the quarter, but I'd say that when you look at a more normal – full year normalized basis, where that's still part of the journey.

Okay. Thank you, Deepa. Could we have the next question, please?

We'll go to line of Sherri Scribner with Deutsche Bank. Go ahead.

Hi, good morning.

Hi, Sherri.

Terrence, if you look at the business environment, we've been in a relatively strong business environment. And we've seen some benefits for TE in the Transportation and Industrial segments. I guess when we think about the fourth quarter guidance, there's a bit of a deceleration in organic growth expectation. Can you maybe talk to what's driving that slight deceleration? Is it related to the business environment? Maybe some commentary on what you're seeing on demand trends and what's driving that. Thanks.

No, actually, Sherri, thanks for the question. Honestly, I don't see that we're seeing deceleration. I think one of the things – while our organic growth has changed, I think one of the things is SubCom also had a very strong fourth quarter last year as well as third [quarter]. You really take our organic growth without SubCom, we would have told you 9% this quarter instead of 6% and 8% in the fourth quarter versus 5%. So we will still have SubCom having a strong fourth quarter last year. So when we look across and it goes back to my order activity, what we see is while auto production has been bouncing around 2%, the content wins that we see clearly are staying where they're at. Markets that we see continuing to have very strong momentum in addition to auto. Sensors we talked about during the call, as well as commercial aerospace, defense, medical, we really see strength in those markets. And certainly, in where we are affected by the cloud, like our data and devices, we continue to see strong momentum, and we would expect that to continue. I think the markets we continually talk to you about, that we would say the lead, they have to get to a more normalized growth. Certainly, our industrial transportation business, our appliance business and our industrial factory automation business looks like it's getting there sort of where we are. You saw the growth this quarter, it's good. So they're the only three that when we look at and we say, we're waiting for them to get to more normalized growth, because we are benefiting from some supply chain bump-ups. And I think as we look going forward, we expect they'll get to a more normalized growth pattern. But net-net, I would say it's very healthy, you saw it in the book-to-bill, you saw it in our order rates being double-digit, you saw the broad based nature of it. That, it's still a very constructive economic environment, but in some of our businesses, we're not going to grow 20% a year for four years. It has to normalize.

Thank you, Sherri. Could we have the next question, please?

And that will come from the line of Mark Delaney with Goldman Sachs. Go ahead, please. Mark Delaney - Goldman Sachs & Co. LLC: Thanks for taking a follow-up question. Follow-up question was on the automotive end market. Realize TE had very good results in the quarter. Some of the supply chain like Dimewar and OSRAM (50:34) have lowered their guidance. So I'm curious, did TE see any impact and was just able to overcome it? Or did you not see an impact at all?

No, we really didn't see an impact because of our global position, so no different than we told you throughout the year, 2% auto production. And while certain customers may have had some things they talked about, our revenue has been staying pretty steady. And if you look at us operationally, both versus even 90 days ago, our Transportation top line is going to be pretty similar for 2018 that we told you 90 days ago. So and it's broad-based, it's broad-based across regions. So I feel very good about where we position ourselves. Certainly, we have something that's unique with the content and where we play both into the connected car and the electric vehicle trends, not everybody in the supply base has that opportunity. So maybe they had some of those impacts. But I feel the content momentum we've had as well as our global position always gives us an opportunity to be isolated from one-off small events. Mark Delaney - Goldman Sachs & Co. LLC: Got it. Thank you.

Thank you, Mark. Could we have the next question, please?

We'll go to Deepa Raghavan's line from Wells Fargo for a follow-up question.

Thanks for the follow-up for me too. Heath, Terrence, could you slice up some of the possible forex headwinds into fiscal 2019? And is there a sensitivity we should be thinking about, so we could right-size our models just given the inflection point here? Thank you.

Thanks, Deepa. And it's a fair question. We're obviously working it real time. If you look at the basket of currencies that we have, you've got to kind of look at when those kicked in in terms of the weakening and the strengthening dollar against that basket. Certainly, at this point, it turns into a year-over-year headwind in our fourth quarter, which is the quarter we're sitting in today. And then, as we get into next year, it has a little bit less of a pointed impact at today's rates in our early part of fiscal 2019. And then it starts to kick in as a much more pointed headwind in the latter part of our second and third quarter. Again, as rates get today, we're not economists, we're not trying to predict what the dollar is going to do. But we'll quantify that as part of the guidance. I would tell you though that it will be a net headwind for the full year 2019. We are not at the point to quantify that externally yet though, but – and we'll keep an eye on what the dollar does.

Okay. Thank you, Deepa. Could we have the next question, please?

And another follow-up question from the line of Amit Daryanani with RBC Capital Markets. Go ahead.

Thanks. Heath, I guess, when I look at the total restructuring initiative, I think $150 million is the number you guys have talked about. How do I think about the payback and when do you get the savings from that into your model? And very specifically, on the Industrial side, let's say revenues are flat in 2019, how much costs do you think you've taken out of the model to margins? I'm trying to figure out how much could margins go up in Industrial specifically even if you don't have revenue tailwind from the cost reduction initiatives.

Well, Amit, good question. The dollars that you see us incurring now relative to restructuring are for things that have been announced in terms of facility consolidations largely and there's still a couple of more of those to come that you would expect to see in our fourth quarter results and into the early part of 2019. However, just because those are announced and we reported the charge doesn't mean that the costs come out instantaneously. Those tend to be more on an operational timeline that continues to support our customers and everything else in those types of transitions. So it can be a couple of years depending upon where the facilities are. And I would tell you that we're still targeting the mid to high teens margin for the segment, similar to what we talked about at our Analyst Day, but it's going to take us a couple of years to get there. 2019 actually is quite a big year operationally for our Industrial segment as some of these announced restructuring programs and the site consolidations are being worked real time. Some of that is captured in the charge that we took, largely though that's around severance costs and so forth, there are any asset impairments. And then, there is real operational costs that are rolled through our results in 2019 relative to parallel production and then these types of things in terms of move costs. So I wouldn't want to oversell that you're going to see another 100-basis-point improvement in 2019 in Industrial, but I do think we'll continue to push the peanut forward on that. And then, if you get into certainly 2020 when some of these sites officially go offline, you'll see a more pointed impact.

Okay. Thank you, Amit. I think we have one last question.

And that will come from the line of Shawn Harrison with Longbow Research. Go ahead, please.

Hi and thanks for taking the follow-up. Wanted to just get your thoughts on the M&A environment and the reason I ask is maybe two weeks ago, one of your quasi competitors paid, I think, a pretty healthy multiple, at least on a sales basis, for an industrial connector company. And so, are you seeing tuck-in M&A higher valuations out there in the market and you think this is maybe just kind of a one-off transaction?

No, Shawn. Thanks for the question. I think like we shared with you, what Jeanie (56:20) talked to you back in the fall, it is an expensive environment and it's been an expensive environment. I don't think that's changed. It hasn't decreased from where we've been. I think the key when you think about TE is how we've talked to you about where bolt-ons play in and where we – they kind of add strategic value. And I think our strategy is very – has stayed consistent as well as how do we make sure that we get return for our owners from ROIC over time. So net-net, I would say the environment still is frothy. And I think we're staying disciplined during that environment, because we have something I think is pretty special in the organic growth opportunities we have. So I don't feel we need to be compelled to do something like we told you on Investor Day as to how do we continue to strengthen our portfolio long-term and create value for the investors. So I think it is a balance with organic first, inorganic supporting it. And we're going to be looking at how we invest our incremental dollars or free cash flow. And like Heath and I've been talking about, we have taken it up on the organic side here this year to really make sure we get the organic opportunities which is the best return.

All right. Well, I want to thank everybody for joining us on the call this morning. And if you have further questions, please contact Investor Relations at TE. Thank you and have a great day.

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