Good day, ladies and gentlemen, and welcome to the A. O. Smith Corporation Second Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Patricia Ackerman, Vice President, Investor Relations and Treasurer. Ms. Ackerman, you may begin. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Thank you, Danielle. Good morning, ladies and gentlemen, and thank you for joining us on our 2016 second quarter results conference call. With me participating in the call are Ajita Rajendra, Chairman and Chief Executive Officer; and John Kita, Chief Financial Officer. Before we begin with Ajita's remarks, I would like to remind you that some of the comments that will be made during this conference call, including answers to your questions, will constitute forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters that we have described in this morning's press release. Also in respect of others in the question queue, please limit yourself to one question and one follow-up per turn. If you have multiple questions, please rejoin the queue. I will now turn the call over to Ajita who will begin with his remarks on slide three. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Thank you, Pat, and good morning, ladies and gentlemen. The second quarter of 2016 was another excellent quarter for A. O. Smith., setting second quarter records for sales and earnings. We continue to see healthy end markets for our consumer products in China and commercial water heaters and boilers in…

Thank you. And our first question comes from Robert McCarthy from Stifel. Your line is open. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Good morning, everyone. I guess the first question I would have is maybe you could just amplify your comments around the price increases that you're going to be pushing through in August and kind of your thoughts about the cadence of volumes for the back half of the year in the North American business. How we should be thinking about that? John J. Kita - Chief Financial Officer & Executive Vice President: So, North America volumes, I guess, first half of the year to second half of the year we would actually expect to be relatively similar. The third quarter is traditionally quite a bit lighter than the fourth quarter but this year, well, we think in all it would be lightly less because of the price increases, et cetera. So, that's how we would kind of view the North America volumes. Obviously, very favorable comps compared to the last half of the year 2015, the opposite of what we had in the first half. So, that certainly will result in an increase of year-over-year. With respect to the price increase, we talked about it. I think we put out an 8-K and we said it's effective H1. Obviously, there can be some pre-buys, so it might ultimately be a little bit later in the quarter, but that's effective H1. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: You would expect some kind of modest pre-buy in association with that? John J. Kita - Chief Financial Officer & Executive Vice President: Yeah. I think that's typically what happened. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Okay. And then my follow-up question I think would be…

Thank you. And our next question comes from Charlie Brady from SunTrust Robinson Humphrey. Your line is open.

Thanks. Good morning, guys, and Pat. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Good morning.

Just on the North America margin outlook second half over first half, it looks like to get to you at the high-end of that range you've laid out for North America – it's about 160 basis point, 170 basis point year-over-year second half versus first half decline. Is that entirely due to your commentary about steel pricing or steel cost rather being a greater headwind as you go through the year or are there other some factors going on in there? John J. Kita - Chief Financial Officer & Executive Vice President: Well, I think, there's a couple of things going on. Number one is ERP spending is higher in the last half of the year than the first half. So, we've said that will affect margins by over 50 basis points compared to the first half of the year. And I think the other biggest factor is what you alluded to. Steel is going to be effective July 1. The price increase will be effective some time probably mid-quarter. And then, also, anytime you put a price increase like this, it's customary for our industry to commit pricing to some projects. So, the entire pricing might not get in until later this year, early next year. So, I think, steel, certainly is the biggest factor.

So, you've got a lag on the pricing versus steel cost going up and you've probably got some pre-buy which skews the volume a little earlier? John J. Kita - Chief Financial Officer & Executive Vice President: Right.

Price hit. Got it. Okay. That's all for me. Thanks.

Thank you. And our next question comes from David MacGregor from Longbow Research. Your line is open.

Yes. Good morning, everyone. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning, Mike (sic) [David].

Just with respect to the residential water heater business, can you just discuss any differences you're seeing in growth patterns between wholesale and retail? John J. Kita - Chief Financial Officer & Executive Vice President: I'll start. Wholesale is growing a little bit better than retail. There might have been some – and I'd say the opposite happened last year. I think retail probably grew a little bit more than wholesale. So, I think, you have that flip-back going on. But I don't think it's dramatic either way, if you will. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah. The ratios really haven't changed much. John J. Kita - Chief Financial Officer & Executive Vice President: Yes, right, not significantly.

And just further to that point is are you seeing disparity within your retailer mix that would raise concerns or is it pretty even? John J. Kita - Chief Financial Officer & Executive Vice President: No. Not really. I mean I talked to our salespeople last couple days and where there is disparity is there is some geographic mix. I mean the Southeast is very strong. The Midwest isn't as strong. So, I mean, you have some of those things going on. I think that the comments they made to me as much were the market's steady. I'm not going to tell you it's robust, but they also said it's not weak. And our forecast of flat to last year results in us taking down our unit volumes by about 100,000 to 150,000, but in total that's less than 2% of the market. So, it kind of is what it is.

Right. Second question just on China. Your best assessment of China's market unit growth rate in second quarter and what are you assuming for the second half in your EPS guidance? John J. Kita - Chief Financial Officer & Executive Vice President: Unit growth, I don't have – oh, yes, I mean, it depends what sector you're talking about. So, water treatment was up 30%, very strong. Our instantaneous gas very strong. We're still a little bit on the Combi Boiler and the commercial a little bit behind. And the electric is up. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah. John J. Kita - Chief Financial Officer & Executive Vice President: So it's - Ajita G. Rajendra - Chairman, President & Chief Executive Officer: And the mix in the first half is in local currency about a 16% increase. John J. Kita - Chief Financial Officer & Executive Vice President: Right. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: And there is some pricing in there because average unit prices have gone up, as we've talked about, because with the new products we try to make sure that, with enhanced features and benefits, we are driving unit prices up. So the 16% is a combination of a little bit of pricing and unit volumes going up. John J. Kita - Chief Financial Officer & Executive Vice President: And, I mean, I think if you look at the last half, we're probably – given our 15% and we're up 16%. We're a little bit lower than the last half of the year, but that's just difficult comps quarter-to-quarter. So we kind of look at it on an annual basis.

Yeah. I guess just to that point, within that 15% second half, are you expecting a slightly better category and maybe just changes in terms of share and pricing or just if you could deconstruct that for us? John J. Kita - Chief Financial Officer & Executive Vice President: No, I think it's pretty much the same thing. As water treatment continues to do very well, we would hope commercial will come back a little bit more in the second half of the year. We're introducing a new product there. But all in all, I don't see anything dramatically moving. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yes. We have new products. We have Series 10 coming out in electric. We have an enhanced portfolio of air purification products. And that's a seasonal product, so that when it gets to the fourth quarter, December, January, is where you see the high volumes there. So, overall, pretty much continuation of the same. One thing I want to add in terms of – just to add some color to your question. When it comes to water treatment, which is probably the business segment that's growing the fastest, the penetration of that product in households in China is very low. It's single-digit. And that's part of what's driving this 30%-plus growth rate in the marketplace. And we have a high share position. And we continue to grow. So we are very bullish about the opportunities in that segment also. John J. Kita - Chief Financial Officer & Executive Vice President: And, I guess if you look at that first half margin for Rest of World, it looks about 13% and we're expecting the last half and the full year to be 13%. So, we'll come in relatively similar.

Right. Okay. Thanks very much. Appreciate it. John J. Kita - Chief Financial Officer & Executive Vice President: Sure.

Thank you. And our next question comes from William Bremer from Maxim Group. Your line is open.

Good morning, gentlemen, and Pat. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning. John J. Kita - Chief Financial Officer & Executive Vice President: Hi, Bill.

Can we touch base a little bit on Lochinvar here? In your slide deck, you said that product sales growth of about 6% but yet your commentary was voicing first half of this year 10% and second half 10%. This is predominantly a North American play. I'm just trying to get a sense on how is it progressing and have we started to consider bringing this internationally. John J. Kita - Chief Financial Officer & Executive Vice President: Well, I'll try to clarify the numbers. Maybe we didn't clarify them quite correctly. So, we really split it into, I'll say, two segments. One is I call their core business, which is the boiler business – residential, commercial boilers. And we said year-to-date that was up about 10%, okay. But they do have, as you know, a standard commercial and a residential business, and that residential business the first half of the year was down 18%. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Residential water heater. John J. Kita - Chief Financial Officer & Executive Vice President: Residential water heaters. So what we said is, for the first half of the year, the total Lochinvar was up 2%.

Okay. Got you. John J. Kita - Chief Financial Officer & Executive Vice President: Then we went to the second half of the year and we said the run rate, we think, will be at about a 10% run rate for the second half of the year, again, led by boilers, which will be up double-digits. And residential will again have some drape but not as much. So, what we've said is, that gets us to kind of that 6% for the year, less than we expected. And, quite frankly, we just didn't build in the residential volatility that we saw. We had a very strong residential last year and we're seeing it come back. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yes. And that's a key point there too because the residential water heater business for Lochinvar was very strong in the first half of last year. So they had tough comp. And so, we see it getting back on track in the second half. John J. Kita - Chief Financial Officer & Executive Vice President: The other thing I'll say is as we look at our boiler business, we appear to be getting market share. So we're very pleased with that.

Okay. The aftermarket there, has that been picking up as well? John J. Kita - Chief Financial Officer & Executive Vice President: Up by 6%, up a little bit. Not dramatic.

Okay. And finally, steel prices. The Q is not out yet. Just wondering. Do you take this opportunity or where are you in terms of positioning yourself? I know about the price increase, but more in essence on hedging tactics going forward. John J. Kita - Chief Financial Officer & Executive Vice President: Well, we talked about it. We've done some hedges on steel. It's not a very liquid market. And we have put some hedges in place that really didn't have much effect at all on the second quarter. And it's just difficult given the liquidity to do much. You have to have a – to be a buyer, you have to have a seller. And it's not a liquid market. It's developing. But we have put some hedges in place.

Great. Thank you.

Thank you. And our next question comes from Alvaro Lacayo from Gabelli Company. Your line is open.

Good morning, everyone. John J. Kita - Chief Financial Officer & Executive Vice President: Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning.

Just a quick – just some more clarity around a flat volume for residential water heater expectation. If you could just comment on the clarity you have into the market and maybe some commentary around sell-in versus sell-out. And you mentioned there is some pre-buy. Have you already seen some evidence of that? John J. Kita - Chief Financial Officer & Executive Vice President: Well, I guess, what I would say and we haven't been very clairvoyant on that, but I would say that when I talked to our salespeople, they think that inventory levels are reasonable. And they'll actually be a little elevated obviously at the end of July because of the pre-buy which we expected. But all in all, inventory levels are reasonable. I think the myth was probably that the inventory levels were just much higher last year than we expected. I mean, Ajita talked in the first conference call that contract is pre-bought. That normally doesn't happen. We've actually seen some NAECA II products sold online recently. So, there's still some out there. But as our people look and talk to their customers, I think, I'd be repeating myself, but it's steady. Our completions are moving the way that was expected. And I think we're relatively comfortable with flat second half of the year compared to first half of the year. And we'll see.

Okay. And then, secondly, just the organic growth assumption on Q2 versus Q1, it's down a little bit. Is that just the reflection of maybe a little bit lower volume on the residential water heater or are there other elements at play here? John J. Kita - Chief Financial Officer & Executive Vice President: Well, I think, it's two things. We've changed our assumptions for currency from the first quarter. And that probably caused us $10 million, $12 million. I mean, the RMB has moved faster than what we thought. And so, we're assuming right now RMB6.7 kind of in the third quarter, RMB6.8 the fourth quarter. And that's up from our original assumptions. And I think the other adjustment would be the residential volumes.

Got it. And the acceleration in the back half of Lochinvar is just purely comps related from the residential water unit? John J. Kita - Chief Financial Officer & Executive Vice President: Well, not clearly. But I guess I'd say what happens is we don't have as much drag from residential, but the boiler business continues to do what it's been doing. Like I said the first half of the year up 10% and we expect the second half of the year to be up more than 10%. And then you throw in, yes, it does have favorable comps just like our North America water heater business does, so yes.

Okay. Thank you. John J. Kita - Chief Financial Officer & Executive Vice President: Sure.

Thank you. And our next question comes from Scott Graham from BMO Capital Markets. Your line is open.

HI. Good morning. John J. Kita - Chief Financial Officer & Executive Vice President: Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Good morning.

So, the expectation that you guys have for the full year residential water heater business, now, I'm not privy, I don't have it in my hands the tankless side. But it would suggest that the water heater side residential your expectation for the second half – year-end volumes are up more than 10%, which seems reasonable given the comparisons and what have you. I guess my question is, is that we're kind of – this has been a pretty long de-stock following the pre-buy, looking in your earlier comments. And what I'm wondering here is we're at like 7.8 million units trailing 12 months. That's a number we haven't seen since, well, three years ago. So, I'm wondering if there's anything else that you think is going on in the channels that might have gotten us to this level. They seem to be leaner than lean, but is there more going on in your view? John J. Kita - Chief Financial Officer & Executive Vice President: I guess what I would say is, repeating myself, it turned out that the volumes were much higher in the pre-buy starting in 2014 and 2015. I think when we step back, Scott, we still look at – we had a run rate in this industry 2010 to 2012 about 8.1 million units. We're up to this year and last year we're staying about 8.9 million units when you include tankless in there. And completions have probably added probably 400,000. So, we've had some replacement growth in there. And I think our people are comfortable with the estimates we have in the last half of the year but - Ajita G. Rajendra - Chairman, President & Chief Executive Officer: I think the pre-buy – as John said, the pre-buy was greater than we thought. And the feedback we are getting from the marketplace is there are now distributors. There are run rates. They're saying, hey, things are okay.

Okay. That's fine. So, there's really no change in your view that there is this still large amount of pent-up demand because the residential water heater volumes have still a ways to go catch-up-wise from how wicked bad it was last cycle. So, you're still thinking that the under-build on starts in particular still suggests that there is a significant amount of units of pent-up demand. Do you still – you're holding to that? Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Long-term, yeah.

Yes, agreed. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Long-term, yeah. In terms of current run rate, things are okay. But long-term the fact is if you go, do the math in terms of the overbuild before the recession and the housing starts since then, there's a deficit in housing. And like I've spoken before, we don't think it's going to come back quickly but it will come back in terms of steady growth over the long haul. And, frankly, we prefer that.

Yeah. Yeah. Got it. My second question is very simple. It's on the Rest of World margins which have been kind of like you get volume leverage and then you spend it and you – this is my phrase, not yours. You kind of manage the earnings of that business really well. I guess, the question is, at what point does Rest of World spending start to comp a little bit more easily and Rest of World margin actually starts to benefit from the volume leverage that you're generating? Ajita G. Rajendra - Chairman, President & Chief Executive Officer: I think you're right. We have been investing. And the level of investment in new businesses in the last few months has been a little higher than what we've done in the past. We still have air purification, which is an investment. We've gotten into commercial water treatment, which is an investment. We are investing in e-commerce business, which is growing at warp speed. I mean, it is just growing very fast. And we're also investing in terms of going into second tier and third tier cities, the smaller cities. So, we do have a lot going on right now. But longer-term, you should see an increasing leverage, an increasing profitability coming out of the China business as we continue to grow. And what we are doing now are investments to make sure that we are fueling that growth out into the future.

Got you. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Because we continue to believe that our brand and distribution in China and our footprint in China has significant upside potential as we expand our categories and continue to grow in the categories we're in. John J. Kita - Chief Financial Officer & Executive Vice President: Yeah. Just to emphasize, I think, China is having a great year. So, one, it doesn't affect their margins, but their currency has affected their absolute profits by $6 million to $7 million. And we've chosen to invest in two businesses specifically that Ajita talked about, air purification, which will probably lose an additional $3 million over last year and commercial water heating, which will probably lose $3 million over last year because we weren't in it. But we think, long-term, both those businesses can be very attractive. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: You meant commercial water treatment? John J. Kita - Chief Financial Officer & Executive Vice President: Yes, commercial water treatment, yeah. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah.

Thank you. That's all I had.

Thank you. And our next question comes from Sam Eisner from Goldman & Sachs (sic) [Goldman Sachs]. Your line is open. Samuel H. Eisner - Goldman Sachs & Co.: Yeah. Thanks and good morning, everyone. John J. Kita - Chief Financial Officer & Executive Vice President: Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning. Samuel H. Eisner - Goldman Sachs & Co.: Hey. So, if I look at your trailing 12 months operating profits in North America and the margins there, you're at roughly 22.5%. That's up from this time last year, on LTM basis up at 17%. So, this is now four quarters in a row where you generated north of 20% EBIT margins within North America. I was wondering if you could parse out how much would be isolated just the raw material tailwind. How much that really has been to you, guys? Because obviously now we're starting to lap some of those savings. So, I was wondering if you could just isolate how big the steel tailwind has been for you guys on an LTM basis. John J. Kita - Chief Financial Officer & Executive Vice President: I don't have that data. I mean, you've got things going on, commercial up and down during that time period. Clearly, steel was beneficial for us over the last three quarters, I'd say. But I don't have any data that would parse that out. Samuel H. Eisner - Goldman Sachs & Co.: Got it. John J. Kita - Chief Financial Officer & Executive Vice President: You have Symphony cost going plus and minus during – I mean not just the SAP cost going plus or minus. So, there's a lot of variables. But certainly steel was beneficial to us in the last three quarters.…

Thank you. And our next question comes from Kevin Maczka from BB&T Capital Markets. Your line is open. Kevin Richard Maczka - BB&T Capital Markets: Thanks. Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Morning. John J. Kita - Chief Financial Officer & Executive Vice President: Morning. Kevin Richard Maczka - BB&T Capital Markets: Can we just do a clarification on the ERP spend expectations for the year? So on a full year basis we'll be $9 million higher this year than last year. Is Q4 a very heavy spend quarter in the back half, a heavier spend quarter and any sense yet on how much that declines into next year? John J. Kita - Chief Financial Officer & Executive Vice President: Okay. So, yes, I'll try to clarify it. First half of the year we spent about $9.5 million. That was very similar to last year's first half of the year. Okay. The second half of the year then we'll spend a delta of $15 million, $15.5 million. That's going to be about $9 million more than the prior year. And I would tell you we will be spending that $15 million or $16 million a little bit heavier in the fourth quarter than the third quarter. So, does that clarify it this year? Kevin Richard Maczka - BB&T Capital Markets: It sure does. John J. Kita - Chief Financial Officer & Executive Vice President: Okay. So, then, when you go into 2017, our expectation – and, again, we haven't done our planning process, but I would think a reasonable run rate is going to be closer to $15 million versus the $25 million. Now, with one caveat, we have not made a decision on what we're doing internationally. I think we've talked on this call that China has a good ERP system. So, at this point, we'll see where we go. It probably is not necessary to put SAP into China. And with that caveat, I would say we think a reasonable run rate would be $15 million. And that kind of covers the amortization, that covers the hosting cost, that covers the service, and those sorts of things. Kevin Richard Maczka - BB&T Capital Markets: Okay, John. Very helpful. Thank you. John J. Kita - Chief Financial Officer & Executive Vice President: Sure.

Thank you. And our next question comes from Bhupender Bohra from Jefferies. Your line is open.

Hey. Good morning, guys. John J. Kita - Chief Financial Officer & Executive Vice President: Good morning. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Good morning. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Good morning.

First question on China here. We have seen like year-to-date now the organic sales growth about like 16%. Could you give us like the second quarter the core water heater sales as well as the water treatment and air purifier? John J. Kita - Chief Financial Officer & Executive Vice President: Air purifier was not much. It was up probably $1 million, but that's off a very low base because I think that the two big quarters for air purifiers are the fourth quarter and the first quarter. So, it was up. It's doing well. Ajita talked about a new project we've introduced. We'll see how successful it is in the – that's the first point. It's going to be significant is in the fourth quarter. I would say, in local currency, electric was up. Gas was up more than that. And water treatment was up 30%.

Okay. Do you have numbers for water heater, like electric and gas, on an organic basis? John J. Kita - Chief Financial Officer & Executive Vice President: Combination, you think, Pat, probably 5%, 6%, 7%? I guess the two combined. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Yes. Right.

Okay. So, somewhat in line with the market growth, what you've been - John J. Kita - Chief Financial Officer & Executive Vice President: Yeah. I think we're very consistent when we look at our market share. And if you're getting at our first growth situation where we talk about the market growing at 7%, the data we've got in our appliances, of which water heaters are a part of that, grew a little bit more than 7%. And certainly all the share data we see we are maintaining share in electric and gaining share in gas. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah.

Okay. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: And other indicators we look at like residential square footage of residential sales, home sales is up nicely, 20%-plus. There's no direct correlation we see, but we track those numbers because all of those impact what our demand is going to be.

Okay. John J. Kita - Chief Financial Officer & Executive Vice President: Everything we see in China, the move to the consumer-driven economy, retail sales numbers, consumption, all seem in place. And then we've said many times on this call, we're a consumer products company in China.

Okay. And the other question was around North America commercial products, commercial water heaters. Maybe, Ajita, you talked about the shift and we have seen that in the air dryer numbers here from the residential electric to the commercial electric here. How should we think about like from all-in perspective and when does that anniversary, because we're seeing growth rates of like 70% or 60% like month-over-month here at least the last two months, three months here? John J. Kita - Chief Financial Officer & Executive Vice President: I think it anniversaries probably at the end of the quarter. But I should emphasize there's two things that could be happening. One is residential clients could be buying commercial units, but there were also smaller commercial customers who, gas stations, et cetera, that very easily could have been buying residential products and can't now. But you're right, almost all of the growth has been in that 55-gallon to less than 90 gallons and that probably continues through the first quarter of next year.

Okay. Okay. And I believe you guys actually introduced a new product in that particular channel here on the commercial side. I think Pat was talking about it earlier this year. How is that doing from market share perspective, especially on the commercial side? Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah. We were late getting into that segment on the commercial side. And we have products in there now. And they're doing well.

Okay. Okay. And lastly on the North America residential here, I've done some channel checks here. Like people, some of the wholesalers have been talking about some good traction in the tankless water heater because of the NAECA III regulation kind of made, as you said, like an 80% changes to your SKUs. So, have you heard anything on that? It's a pretty small category, about 0.5 million in North America. Have you seen some more traction in that category and any thinking about the medium-term growth in that particular category? John J. Kita - Chief Financial Officer & Executive Vice President: Well, it's grown 500,000 last year. It will probably be 550,000 or so this year. As we've talked about in the past, it's more new rather than retrofit because it's more expensive. I will also tell you that tankless unit is more expensive than our tank unit. And so, there is some growth in it. We don't expect it to be enormous. We have a product in that category. So we're covered in that category either way. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah, either way. So, this year, if you look at the first part of this year, tankless has gained market share faster. I mean, tankless has gained. It's growing faster than the tank types. From our perspective, we are actually gaining market share in the tankless. So, either way, from our perspective, yes, you've got both categories. We are covered in both categories and somewhat indifferent as to which grows faster.

Okay. Okay. And any reason behind why year-to-date it has grown faster than the tank? Ajita G. Rajendra - Chairman, President & Chief Executive Officer: I think a lot of it is driven by NAECA III and the fact that you had that significant buy-in last year of the tank type.

Okay. Okay. Got it. That's all I have. Thank you.

Thank you. And our next question comes from Jeff Hammond from KeyBanc. Your line is open.

Hey, guys. Just on China, a couple questions. One, can you just talk a little bit more about your investment in commercial water treatment? What you think the opportunity is, growth rates long-term? And then also, Ajita, you mentioned e-commerce growing dramatically. What's driving that market? How big is that business for you? What do you see as the growth rates? John J. Kita - Chief Financial Officer & Executive Vice President: I'll answer the last one. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah. Go ahead. Yeah. John J. Kita - Chief Financial Officer & Executive Vice President: You take the first one. The last year, we sold about $140 million in e-commerce. We're up year-to-date very nicely. Our expectation is we'll be over $180 million this year. I can't say what's driving it as much as obviously the Chinese consumer is very willing to buy online. And all the statistics show that that they're more willing to do that than the U.S. consumer, et cetera. And it's an opportunity for us because we have good distributions. So, when they buy online, we have the capability to install the product, and we're doing that. So, our management team saw this in China, saw this about four years or five years ago and started putting in the infrastructure. And we're doing advertising on the net, et cetera. So, we think we're in very good position with respect to that category. Ajita G. Rajendra - Chairman, President & Chief Executive Officer: Yeah. And we've added significant amount of people and skill sets in terms of being able to sell our products online, merchandise our products online, do the search engine optimization, so that our products pop up and people do the searches. And interesting statistic, more than 75%…

Great. Thanks, guys.

Thank you. And our next question comes from Robert McCarthy from Stifel. Your line is open. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Yeah. Just a couple more in the interest of time. I mean, have you sized, just in terms of annual numbers for 2016 for your water treatment business here, purification business. You've given us some numbers in the past. And then now given the growth rates we've seen, whether you can give us those updated numbers? And then, I have a follow-up on India. John J. Kita - Chief Financial Officer & Executive Vice President: So, last year, in our branded business we sold about $110 million. We would expect to be close to 30%, although again, you have currency playing issues there. But we are certainly expecting to be in that $135 million to $140 million range, I would say, for our business for water treatment. And that's after a fair amount of currency drag. You throw in, in Vietnam, we'll sell $3 million or so this year. India we'll probably sell about $3 million this year. And Turkey we'll sell $5 million to $6 million this year. And then, our base legacy business that we bought will sell about $15 million. So, water treatment is starting to get to a reasonable scale, and we think there's potential in that area. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Air purification is still, what, $10 million to $15 million, what are we talking about? John J. Kita - Chief Financial Officer & Executive Vice President: Well, air purification last year was $10 million and we said that we expect it to double this year. Robert McCarthy - Stifel, Nicolaus & Co., Inc.: Okay, $20 million-ish. And then just in terms of – you did cite…

This concludes today's Q&A session. I would now like to turn the call back over to Patricia Ackerman for closing remarks. Patricia K. Ackerman - Treasurer & Vice President-Investor Relations: Thank you, all, for joining us today. Please take note that we will participate in several conferences during the third quarter: Jefferies Conference in New York City on August 10, Oppenheimer Corporate Access Day in Chicago on August 18, and the CFA Society (sic) [Institute] Conference in Minneapolis on August 23. Have a wonderful day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.