Good morning. My name is Angela, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2011 Third Quarter Results Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Ken Lamb, Director, Investor Relations. Mr. Lamb, you may begin your conference.

Thanks, Angela. Good morning, and thank you all for joining us. We issued our earnings release this morning at approximately 8:00 a.m. Eastern Time. It's posted on our website borgwarner.com on our homepage. A replay of today’s conference call will be available through November 4. The dial-in number for that replay is 800-642-1687. You'll need the conference ID, which is 11581019. The replay will also be available on our website. With regard to our Investor Relations calendar, we’ll be attending several conferences over the next few months. November 1, we will be at the Gabelli Automotive Symposium in Las Vegas; November 8, we will be at the Baird Industrial Conference in Chicago; November 14, we will be at the Barclays Global Automotive Conference in New York; November 17, we will be at the Morgan Stanley Auto Meeting in Los Angeles; December 8, we will be at the Goldman Sachs Global Auto Conference in London; and we will be at the Deutsche Bank Global Auto Industry Conference in Detroit in early January. Also we will be releasing our 2012 to 2014 backlog of net new business on November 8 and providing color on the backlog at the Baird Conference. Before we begin, I need to inform you that during this call, we may make forward-looking statements, which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. Now, moving on to our results, Tim Manganello, Chairman and CEO, will comment on the third quarter and current industry trends and then Robin Adams, our CFO, will discuss the details of our operating results and also our outlook for the rest of the year. With that, I'll turn it over to Tim.

Thank you, Ken, and thank you everyone for joining our call. Today, I’m very pleased to review our third quarter results, our accomplishments and our revised guidance. But first, I’d like to comment on current production volume concerns within the investment community. In recent weeks, uncertainty about the world economy particularly in Europe has created nervousness and has caused speculation about vehicle production in certain parts of the world. In July, before this issue surfaced, we raised our 2011 sales and earnings guidance, and today we refined our guidance to the high end of that range at $4.35 to $4.45 per share. All the markets have been assessing vehicle production risks; the outlook for BorgWarner and our business remain strong. BorgWarner’s performance is linked to the industry’s focus on fuel economy and improved emissions. There may be uncertainty about European vehicle production, but there is no doubt that fuel economy and improved emissions are a focal point for the industry now and for many years to come. Therefore, we remain bullish about BorgWarner’s near term and our long-term future. However, because there is uncertainty about Europe, I would like to address our BorgWarner will get through another downturn should the need arise. In the aftermath of the last downturn, BorgWarner emerged stronger than ever, and today we are a leader company and sales and earnings performance continues to set records. Also, we employ more temporary workers now than we did previously. And that means our total cost structure is easier to flux if necessary. We also have agreements, pre-range agreements with our various works counsels in Europe. In our view, there are no clear signs of a downturn; however, we are prepared to execute cost control plans quickly if needed, and we feel very good about our ability to perform…

Thanks, Tim, and good day to everyone. Before I begin my review of the financials, I would like to again review the macro auto industry environment for the third quarter to help put our record sales performance in perspective. If you look at third quarter global production, it was about 18.2 million units, which is up about 5% from the third quarter last year. Our reported sales were up 27%, now that did have some foreign currency benefit, dollar versus the euro, I think the dollar to euro was about $1.32 last year, year-to-date and we are looking about $1.41 this year, so there is a benefit there. As well as the Haldex Traction Systems, a business, which we acquired in the first quarter this year. So excluding those, and to put the year on a comparable year-over-year basis, our sales were up 16% and that’s 11 percentage points better than the 5% increase in global production year-over-year in the quarter. And just another quarter in a row, where our sales growth significantly outperformed the market. Looking at the income statement, if you work down from the sales line, gross profit as a percent of sales was 19.6% in the quarter, slightly higher than 19.4% a year ago, flat with second quarter 2011. The year-over-year improvement in the quarter was realized despite approximately $11 million of negative impact from higher raw material prices. SG&A expenses were $151 million or 8.5% of sales in the quarter versus a $150 million or 10.7% of sales in the second quarter last year. Now, let’s spend a little bit of time on the SG&A, because there was an unfavorable event from a shareholder perspective, but a positive event from an SG&A expense perspective, that’s flipping between quarter-on-quarter. So if you look at SG&A in…

We will now turn to the Q&A portion of the call. I would like to ask the call coordinator to please announce the Q&A procedure.

(Operator Instructions) Your first question comes from John Murphy with Bank of America Merrill Lynch. John Lovallo - Bank of America/Merrill Lynch: Hi, guys this is actually John Lovallo on for John Murphy. How are you?

Hi, John.

Hi, John. John Lovallo - Bank of America/Merrill Lynch: First question is, can you just speak a bit about the DCT penetration rate globally today and kind of where you think that, that can go?

DCT penetration rate will continue to grow, I don’t have the exact numbers in front, but we have all sorts of charts, I just don’t them in front of me, usually I have two. You’re going to see DCT penetration rates probably grow at 20%, 25% of the total market globally. And all you can see is a continued swing towards probably wet-clutch DCT because dry-clutch DCT, people have dry-clutch DCTs right now are starting to see difficulty in the operational performance of the product line in the marketplace. Well, I don’t mention any customers.

I’ve got that data, John. If you look at the two major markets in the world where DCT really is going to take hold, European markets five years from now, 50% of the automatic transmission will be dual-clutch, five years from now approximately, 40% of the automatic transmission from China will be dual-clutch.

And those are big markets, but globally it will be less because of United States penetration rates. John Lovallo - Bank of America/Merrill Lynch: Great, that’s helpful. Next question, you guys are certainly growing nicely in China, how big of the part of your business do you think China can be, and more importantly, I mean is there sufficient skilled labor there to kind of meet your needs?

Skilled labor is a challenge, but we always find the right people, and when we’ve got the right people, and we continue to grow our business. We are growing significant; it will be a significant percentage of our business. Because we are growing so strongly now in Eastern Europe and in Korea, and we are back to growing in the United States. China will as a percentage, will grow or outpace, on a percentage wise will outpace the company, the rest of the regions, but because the rest of the regions are growing, also the percentage is difference of percentages of growth won’t be that significant. Let me just say this though, our sales from in the last three years have probably tripled in China. And as I look forward in the next five years, our sales will probably more than double in China over the next five years. And that doubling was often due to a much higher base than the base that we had three years ago when we tripled between three years ago and now. So we don’t breakout – we don’t break it out, that’s by country, that’s specifically, but China will be, let’s just say this. The sales in China will probably be equal to or stronger than our domestic sales to the territory in North America. John Lovallo - Bank of America/Merrill Lynch: Okay, great. And then the final question, from a capacity standpoint how are you guys doing in China and maybe in the South America as well?

Well, reporting in capacity in China as we speak for dual-clutch transmission are often alluded to that now, we are putting in capacity for most chain on a chain products, we are putting in capacity on turbochargers, also in Ningbo. We are putting in capacity, because like I said we are doubling sales in the next four to five years, and that’s on a conservative, what I think is a fairly conservative long-range plan for China. I think that China is just a phenomenal growth opportunity for BorgWarner for sure because of the focus on fuel economy and emissions, well, it’s an equally good growth opportunity for the rest of the industry, probably just not as good as it for BorgWarner. Mexico. Brazil, we are growing in Brazil very strongly right now on the commercial side. We’re moving as the Germans are staring to localize as the Koreans on Jim, Brazil just changed the localization loss, and that’s going to force the people who are shipping product into Brazil, there will be – the product that was made in other countries, and they were shipping into Brazil. They will have to localize in Brazil now, and that we are ready for them, we are just putting in a new campus, say I was just down there a couple of months ago, we’re under construction for a new building, new buildings, new tech center, and what we see in Brazil is what we were doing in China five years ago, we are on the launch pad for more growth in Brazil. And Mexico, Mexico is growing because we are making all the turbochargers for the Ford Ecoboost down in Mexico right now, and we have tremendous volumes for Ford on the Ecoboost, not just on the six cylinder rear-wheel drive pickup trucks like that are growing, that are very half right now for turbochargers, but we’ve picked up global we have picked up our four-cylinder turbocharger business for Ecoboost, so we have at Ford. So we have a tremendous opportunity for growth in Mexico, those products will be made in Mexico where we shipped to the plants in Mexico and North America. John Lovallo - Bank of America/Merrill Lynch: Okay, great. Thank you very much, guys.

Sure.

Your next question from Peter Nesvold with Jefferies & Co. H Peter Nesvold – Jefferies & Co.: Hi, good morning. Just a real quick question on the incentive comp for 3Q, thank you for the detailed explanation on the trends in 3Q to 4Q, just so I can to kind of get a clean EBIT margin number for third quarter, is there a way of breaking down the impact of 3Q between the two different divisions.

No. That all sits at corporate. If you look on our second disclosure on the second page of the press release we show Engine, we show Drivetrain and then corporate and all other kind of stuff. It’s in there, it’s very clear if you look at, I think we’re $20 million, $21 million in the third quarter of this year, like 34 last year. H Peter Nesvold – Jefferies & Co.: Okay, right.

That’s where you see the difference. H Peter Nesvold – Jefferies & Co.: Okay, excellent. All right that’s it.

Just to let you know, we all suffered the same pain in the third quarter unfortunately. H Peter Nesvold – Jefferies & Co.: A lot of us did. All right thank you for the time.

Your next question comes from Chris Ceraso with Credit Suisse. Chris Ceraso – Credit Suisse: All right. Thanks, good morning.

Hi, Chris.

Hi, Chris. Chris Ceraso – Credit Suisse: I’m thinking one of these dry dual-clutch programs at one of your biggest customers that doesn’t seem to doing that well in the marketplace, is there an opportunity for you to go in there and win some business with your wet dual-clutch.

Well, I think there is always an opportunity for customers to upgrade their technology and we give them that option. We don’t make the whole transmission, we just make the wet clutch module and dry clutch module. I think if the people that are in the dry clutch business, I’m not going to mention any specific names, but people in the dry clutch business or the people that are working on dry clutch, that are working on dry clutch programs, are probably reassessing the path they’re going to take in the future on wet versus dry-clutch and we’re seeing a lot more activity on dry-clutch technology and dry-clutch development. I’m sorry, a lot more activity on what clutch activity and what clutch development programs. Chris Ceraso – Credit Suisse: Okay. You said, you didn’t really have a feel yet for what sort of an impact the Thailand issue you might have. But maybe you can help us with a little bit of background, do you know roughly what percent of your sales is represented by manufacturing vehicles that you supply there. And what components are you sourcing from that region?

Almost nothing. We do almost nothing there, we have a little operation of what they do right now. The issue is, our customers mainly the Japanese customers do a lot of work and source parts from Thailand. So we don’t know, we saw it yesterday in the paper that Toyota is kind of looking at some of their overtime schedules, and they maybe be tweaking overtime temporarily. So for us there is no production effect to speak of, because those percentages are so small, rounding here inside BorgWarner. But it’s what it does to our Japanese customers mainly. Chris Ceraso – Credit Suisse: Okay. And then just last one, Robin, you gave some expectations about cash flow for the year. If I look at that relative to what you’re talking about in terms of earnings, it looks like their cash flow is about, I don’t know, 50% to 60% roughly of your net income. I understand there is an awful lot of growth here, is that the kind of level that we should expect for the foreseeable future in terms of your cash conversion on your net income?

It's probably a fair number, this year the real driver there is income tax, we are paying for the first nine months, we are paying about $70 million more in cash taxes this year than last year. So one thing, it’s little bit hard to gauge, but I would expect that the level we are running at now is a pretty fair level. Chris Ceraso – Credit Suisse: Okay. Thank you.

Your next question comes from Rich Kwas with Wells Fargo Securities. Rich Kwas – Wells Fargo Securities, Llc: Hi, good morning.

Hi, Rich.

Hi, Rich. Rich Kwas – Wells Fargo Securities, Llc: Robin, your comment around drivetrain on the 9% number, is that going to be an all-in number or is that excluding Haldex in terms of getting to that 9% level?

Well, I think excluding Haldex, that’s not a problem, all-in may be little bit more work to do, but they are driving towards their level. Rich Kwas – Wells Fargo Securities, Llc: Right. I mean based on kind of the issues you had earlier in the year, late last year and those getting better, is that something that early 2012, we should expect to see that level?

As a Tim said before, we expected a sequential improvement in second quarter and third quarter, and we’re expecting improvement in the fourth quarter as well. So that core year-over-year comparison that business should be north of 9% in the fourth quarter. Rich Kwas – Wells Fargo Securities, Llc: Okay.

And they are working hard at it. Rich Kwas – Wells Fargo Securities, Llc: All right. Okay. And then just I know you’re going to give guidance for next year at the Auto Show, but if you think about how Europe, there is a lot of uncertainty there and there could be volatility in schedules, and it could be a decline in overall production next year, you’ve talked about incremental margins being above norm for some period of time, how did that affect the potential for above average incremental margins with increased volatility in Europe, did that dampen that outlook at all, just how should we think about that?

Well, we’ve said this before, as sales decline the incremental margins are higher, or the decremental margins versus sales increasing. And just a function of that, when sales are increasing it’s typically in regions of the world where you are putting growth in place. And Europe as we’ve said before, we don’t have the type of flexibility if we have in other parts of the world, having said that though Tim went through earlier and talked about our plans in case volumes trended down in Europe, we do have a number of temporary workers at least to get us through the first phase, but yeah, volatility is an issue for us, as anyone in the industry we’d loved to see our facilities run 1,000 units a day for 242 days a year instead of 600 and 1,200 and 300, and 1,500. It’s a challenge from an operating perspective.

This is Tim. We will do everything we can to protect our margins if there is some kind of significant downturn in Europe let’s say hypothetically. We, as I said, we’ve got pre-agreements with Works Council, we’ve got everything set to go, so if we ever had to flip the switch, we’ve taken all the lag time out of the reaction time. So, we pretty much are going to do everything we can to protect our margins in Europe, and I think our margins will continue to do well and hold strong and North America, Japan, China, Brazil and all the rest of the world. So, in my mind Europe is probably just the only question mark on what happens and how strong we can hold the margins.

Again Tim laid out earlier that all the work that’s been done and getting prepared that we’ve looked at and the actions that our plant would result in managing to about $0.20 on the dollar decremental margins, so, which is kind of where we performed in the last downturn.

The other thing is since the last downturn part of the reason why our margins today are doing so well and are stronger and higher than and is because we actually never put a lot of people back in after the last recession, when things started to pick up and we started to get the growth rates back for 2010 and 2011. We didn’t hire a lot of salaried back, we hired enough to support all our growth continue all the development programs and invest for the future on technology, but we still held the line and to this day, I’m still approving every salary hired worldwide. And I think you’re going to see that’s going to turn out to be a tremendous benefit for us. Now, that kept us lean, so because of that, we’re hopefully we are still in, but we don’t have as much to go after if there is another downturn when it comes to salary workforce.

And it shows up in our SG&A, again if you look at year-over-year, I think again excluding the benefit of the stock decline in the quarter, SG&A was only up about $10 million to $11 million year-over-year and $13 million increase in R&D, which means that the rest of the spending in the SG&A line item is being held fairly flat and tight at this point. Rich Kwas – Wells Fargo Securities, Llc: Right. And then last one for me just on NSK, so the production came back here nicely in the third quarter, I mean do you see more benefit here from the Japanese, I know the Thailand issue, kind of throws some noise into it, but just all else equal where you are going to see more benefit here on the production ramp into the fourth quarter and the first quarter of ’12.

On the macro level, if you take the Thailand noise out like you just said, Toyota and the rest of them have not come back up to full pace yet in terms of filling their pipeline on inventory, meeting all our orders, so there is still more upside on sales and more upside on production because of replenishing their inventory worldwide. So, there is more upside on the production side, so now at ’11, we won’t jump in on the rest of it.

If you look at affiliate earnings, which is kind of what’s driving your question to, it appears to us there was quite a bit of catch-up in the third quarter. So, we are not expecting affiliate earnings in the fourth quarter to the level of third quarter that we saw. It'll be close, but we think repeat for the year for NSK one or affiliate earnings, third quarter, as Tim said though, the business continues to grow; we expect that to grow for us in 2012. For the rest of this year, I think third quarter is a peak for us. Rich Kwas – Wells Fargo Securities, Llc: Okay. Great. Thanks everyone.

Your next question comes from Tim Denoyer with Wolfe Trahan Research. Timothy Denoyer – Wolfe Trahan & Co.: Hi, thanks for talking my question.

Hi, Tim. Timothy Denoyer – Wolfe Trahan & Co.: If I look at content per vehicle, I mean, obviously, it was great quarter, I will admit that, but content per vehicle year-to-year growth look like in the engines segment slowed a little bit from 2Q to 3Q, if you look at just vehicles world-wide, were there any destocking in the channel, we’ve certainly heard some of that from more commercial customers, I realize that the commercial and aftermarket isn’t a huge part of what you do, but can you comment on that?

Well, we don’t track content per vehicle, number one. So, I couldn’t even give you clue as to what it means to us. As far as the aftermarket, our sales have stayed pretty even, as a percent of sales, the aftermarket is about 6% of our sales and that’s typically where it still has been. On the commercial side, you mentioned commercial, the commercial side for this year and for the last number of quarters is about 15% to 16% of our sales and it stayed constant, I think year-to-date it’s 15% of sales. So, we are seeing a strong growth on the commercial side in Europe and North America and China is the only place where the markets kind of falling down and we are still doing well in China because like I said in my call, or my part of the call. We are selling more turbochargers to increase penetration rates on turbochargers in China, I don’t know if any destocking going on and I don’t know the answer to that, I can’t comment on content per vehicle is that’s not the way we look to run the business. Timothy Denoyer – Wolfe Trahan & Co.: Yeah, but that’s my estimate.

Yeah, as we look at the growth in the business, the engine business was up year-over-year at 17% in the second quarter and 16% in the third quarter. So, fairly consistent from our perspective. Timothy Denoyer – Wolfe Trahan & Co.: Yeah, it was up sequentially on my number, just a little flow year-on-year and it’s a tough comp, but on the commercial side again, how (inaudible) to Europe and do you have any thoughts on some of the cuts that we’ve seen there, how does the commercial breakdown between China, Europe and the U.S.?

Right now Europe and North America are about even and commercial, they are spread out between turbochargers, and fan and fan drives mainly and I don’t care now with a split between which one is large and which one is between turbo and thermal. I can’t remember, but it’s probably not that important. We’re seeing strength and still seeing strength and like I said commercial turbochargers in Europe is strong, North America is strong, thermal and Europe is strong, North America is strong. And it’s about 50:50 for us between Europe and North America. Timothy Denoyer – Wolfe Trahan & Co.: Okay, thanks very much.

Thanks.

Your next question comes from Brian Johnson with Barclays Capital. Brian Johnson – Barclays Capital: Good morning gentlemen.

Good morning, Brian.

Good morning. Brian Johnson – Barclays Capital: Would like to talk a little bit about the segments in engine other than turbochargers. A couple of questions, I’d start by leveling the detail product profitability and growth, but maybe I wish you won’t care, but at higher level, what percent of turbo is roughly of that what’s the next two or three biggest products that I’m looking at your description on your Investor deck. And which are growing, what’s the relative growth rate as we go across the product lines?

We don’t get any numbers, Morse chain is a big growth product for BorgWarner globally. Within Morse Gemini we have two sides of the business, we have the chain side of the business, some of which is timing drive systems of the chains and the rest of the timing drive systems sprockets and guides and snubbers. Good growth globally, China, Brazil, opportunities in Brazil in the future, growth in Korea right now saw a tremendous growth on that side. The other part of the Morse chain side, which is kind of like maybe the sleeping giant for the future is variable cam timing. We have those variables cam timing, which I’ve said over the last number of years and quarters, it’s the kind of like the generation two or generation three technology. And it basically is so sophisticated that it will allow when combined with turbocharging, it will allow these OEMs from around the world and we are working on development programs with someone right now to recalibrate and redesign their engines, which will give them a long way of meeting this 54.5 mile per gallon CAFÉ in North America, and the more stringent standards for CO2 emissions in Europe. But variable camp timing could be the sleeping giant in the future of this company. But obviously, turbocharges still dwarf everything else on the engine side. EGR coolers when we did the acquisition on EGR coolers combined with our diesel EGR technology is really EGR valves. We are seeing great growth, the ENSA acquisition combined with our emissions business before hand. It was basically, the ENSA acquisition was hitting it’s targets, we’ve bought it earlier in the year, I think right at the beginning of the year or at the end of last year, I think it was. And they’re actually starting to exceed our expectations and they are doing better than their original plan. There is tremendous growth opportunity for them because they offer systems approach to EGR and EGR cooling combined with turbocharging. So, we have all these complimentary technologies that all work together whether it’s variable cam timing, EGR cooling, EGR values, and turbocharging that all come together to this optimized engineering management through efficient combustion, which we’ve talked about as a strategy for BorgWarner for the last eight years. Fan and fan drives on the commercial side, tremendous opportunities. So, I mean I could take a whole lot of products, we have probably 15 products I could talk about, but those are some of the big hitters on the engine side, which is where your question was.

Brian, let me help you, every product in the Engine Group had double-digit sales growth in the third quarter. So, it isn’t just turbo driving growth and everyone else relatively flat. Every product area to Tim’s point is growing strongly across the world and we had double-digit sales growth in every product area. Brian Johnson – Barclays Capital: Okay. I get the VCT adoption curve, what’s driving timing change, what the buying proposition for the …?

There are couple things, there are still a few engines that are growing from belts to chains, but more important, we have better noise performance, better durability performance and we have better efficiency on a chain that allows you to get slight increases in fuel economy. And the last thing a company wants when they are buying a timing chain systems is they don’t want noise, they don’t want chain stretch and they want durability. And we actually are the leaders in probably all three of those benefits within the chain business. We have probably better durability, better noise and low chain stretch or chain wire. Brian Johnson – Barclays Capital: Great bring one with you when you come to New York and we can show people.

Sure, we will show you timing changes. It’s a fairly mundane product, but it’s a hell of a winner. Brian Johnson – Barclays Capital: Thanks.

Thanks, Brian.

Your next question comes from Ravi Shanker with Morgan Stanley. Ravi Shanker – Morgan Stanley: Thanks, good morning everyone. Just a few follow-ups here, Robin I know you addressed the Drivetrain margins quite a bit, but just to clarify, are you guys completely passed all your execution issues there now and so the only real headwind to true margin power there is the Haldex acquisition cost?

No, they still got some work to do in Europe. Ravi Shanker – Morgan Stanley: Can you quantify that at all?

Not exactly as I said we expect – if you exclude Haldex, again we’re about 8.8% in the third quarter, we expect that to be about 9% in the fourth quarter and growing, and so they’ve got more work to do.

I’m not going to say (inaudible) unless I see him with at least a number that’s in the (inaudible) present margin range over there on the Drivetrain, so we got a, it may take us a while, a long while to get there, but we’re on an improvement curve that someday can get, hopefully get us there. Ravi Shanker – Morgan Stanley: Got it and also just given the size of the beat and the good result of this quarter, it looks like you’ve moved to the higher end of your guidance range, but it probably could have been little bit stronger is the recent 4Q looks a little bit conservative, the SG&A incentive cost, or is there something else going on?

Yes, Jeffrey as I said if you look at our guidance, what you need to do is, if you look at year-to-date performance it implies a fourth quarter of $1.09 to $1.19 a share. And what you need to do is take $0.06 out of the third quarter, add $0.06 to the fourth quarter, so fourth quarter versus what you were thinking before, excluding this timing on the equity. Our employee guidance is really $1.18 to $1.25 for the fourth quarter, which is going to be a record quarter for us for the year, significant improvement over fourth quarter last year. I expect by the end of fourth quarter to be pretty happy talking to you all, and you should be pretty happy as well given the type, if we hit the guidance level we’re indicating here, it will be a damn good quarter. Ravi Shanker – Morgan Stanley: That makes sense. Thank you.

We have time for one final question, and that question comes from Rod Lache with Deutsche Bank. Patrick Nolan – Deutsche Bank Securities: Good morning, everyone. It’s actually Pat Nolan on for Rod.

Hi, Pat.

Hi, Pat. Patrick Nolan – Deutsche Bank Securities: Just two quick ones, most of my questions have been answered. On the net SG&A, it looks like you are going to end the year right around 9% of sales, how much of leverage do you see in that as we go forward, I mean you’re going to be continuing probably in mid-double digit growth, probably through mid decade, where do you ultimately think that can go as a percent of sales for the SG&A line?

One of the things we have said before is, we’re struggling to catch up on the R&D side, and we are still, when you look at R&D spending, that maybe 3.5% for the year as a percent of sales, and we’ve traditionally been 4%. So you’ve got a little bit to go on the R&D side. So we would expect as Tim said, he still approves every hire for salaried employees, and I’ve got five that he hasn’t approved for like nine months now, I want to remind him for everyone.

(Inaudible)

Yeah, that’s fine. Thank you, Tim. They are good hires, but nonetheless, but we do have good cost control focus still on the salary side, but the R&D spending will increase with this business. So we’ll see SG&A margins, they will creep up from that 9% level, but they are not going to be 10%, I will tell you that, they will still be closer to 9%.

And that’s certainly historical range. Between 9% and 10% is our historical range for a number of years. So every once in a while we top above that, but mostly we’re 9% to 10%. Patrick Nolan – Deutsche Bank Securities: Okay. Thanks very much. And just lastly on raw materials, I think you said 35% to 45% this year?

35% to 40%, yeah. Patrick Nolan – Deutsche Bank Securities: What’s it looking like for next year if we held the current prices?

I don’t have that up on top of my head. There is a little bit of material inflation next year. We are still going through our look at 2012, and I know there is some material inflation there, I can’t quantify that. Historically, we’ve been about – no matter what’s going on the world, we’ve been about $25 million to $30 million of increase in raw material prices and without knowing any details, in my expectation, it’s going to be no worse than that next year. Patrick Nolan – Deutsche Bank Securities: Thanks very much guys. Good quarter.

Thank you.

Thanks. I'd like to thank you all again for joining us. We expect to file our 10-Q before the end of the day, which will provide details of our results. If you have any follow-up questions about our earnings release or any thing discussed during this call, please direct them to me. Angela, you can close out the call now.

That does conclude the BorgWarner 2011 Third Quarter Results Earnings Conference Call. Thank you for joining. You may now disconnect.