Ladies and gentlemen, thank you for standing by. Welcome to the General Motors Company Third Quarter 2016 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded Tuesday, October 25, 2016. I would now like to turn the call over to Randy Arickx, Vice President of Corporate Communications and Investor Relations. Please go ahead, sir.

Thanks, operator. Good morning and thank you for joining us as we review GM's financial results for the third quarter of 2016. Our press release was issued this morning and the conference call materials are available on the GM Investor Relations website. We are also broadcasting this call via webcast. Included in the chart set materials published this morning, we've included key takeaways from each chart in the notes pages in order to provide color on the results. This morning, Mary Barra, General Motors Chairman and Chief Executive Officer, will provide brief opening remarks followed by Chuck Stevens, GM's Executive VP and CFO, and then we'll open the line for questions from the analyst community. Before we begin, I would like to direct your attention to the legend regarding forward-looking statements on the first page of the chart set. The content of our call will be governed by this language. In the room today we also have Tom Timko, Vice President, Controller and Chief Accounting Officer; and Dhivya Suryadevara, Vice President, Treasurer and Chief Investment Officer to assist in answering your questions. Now, I'll turn the call over to Mary Barra.

Thanks, Randy, and good morning, everyone. Thank you very much for joining. GM delivered strong earnings and achieved several third quarter records that included net income, EBIT-adjusted, EBIT-adjusted margins, EPS diluted-adjusted and adjusted automotive free cash flow. Here are just a few of the year-over-year highlights. Net income increased 104% to $2.8 billion as net revenue rose 10% to $42.8 billion, which is an all-time record. EBIT-adjusted was up 14% to $3.5 billion. EBIT-adjusted margin was 8.3%, up 0.3 percentage points and EPS diluted-adjusted was up nearly 15% to $1.72. Adjusted automotive free cash flow was $3.8 billion, up from $0.8 billion last year and ROIC adjusted of 30.6% on a trailing four-quarter basis was an all-time record continuing the positive impact of our disciplined capital allocation framework. Given our outstanding performance this year, we are on track to deliver a record 2016 on top of a record 2015 and a very strong 2014. In addition, we expect to be at the high end of our full-year EPS diluted adjusted guidance of $5.50 to $6 per share. We also completed our initial $5 billion share buyback commitment a quarter early and we'll be purchasing additional shares in the fourth quarter. We had very strong performances in North America and China. So let me cover a few of the highlights. In North America, our disciplined retail-focused strategy is paying off. U.S. retail share grew 0.4 percentage points for the highest Q3 share in five years. Chevrolet posted its best Q3 U.S. retail performance in 10 years and Buick's best in 11 years. Our Q3 ATP of almost $36,000 exceeded the industry by nearly $5,000. On the incentive front, although we are operating in an extremely competitive environment, we remain committed to our disciplined go-to-market strategy with a focus on retail customers…

Thanks, Mary. I'd like to provide some perspective on the quarter and our results through the first nine months of the year. In addition to another record quarter, we also put up some very strong results year-to-date. EBIT-adjusted through September grew to a record $10.1 billion, up $2.1 billion on a year-over-year basis. EBIT-adjusted margin was a record 8.3%, up a 110 basis points year-over-year. The positive results were broad-based with all but one of our automotive regions posting year-over-year profit improvement during the first nine months of the year. Our strong year-to-date results were led by record results in North America, sustained strong performance in China, and breakeven results in Europe. And our performance year-to-date clearly demonstrates that we're on track to meet our commitment and deliver another year of strong results. In North America, EBIT-adjusted grew to a record $9.4 billion for the first nine months of the year, up $1.2 billion year-over-year. Our EBIT-adjusted margin was a record at 10.7%, up 20 basis points year-over-year, and in line with our target of sustaining strong margins of 10% plus for the year. In fact, North America has achieved 10% plus EBIT-adjusted margins for five of the last six quarters. The underlying strength of the U.S. industry continues to support our strong earnings in North America. We expect the U.S light vehicle industry to be in the low to mid 17 million SAAR range for the year. And we also continue to expect the industry will remain strong, albeit in a plateau environment over the next number of years. However, given the recent increased interest in industry incentive and inventory levels, I'd like to spend a few additional minutes to share our view. Cleary, we recognize the industry is increasingly competitive, especially as consumer preferences are shifting away from…

Our first question comes from the line of Itay Michaeli, Citi.

Great. Thanks. Good morning, everyone.

Good morning.

Good morning.

Great. So, Chuck, can you – just on 2017, I know, it's early for guidance in detail, I think, the slides do still talk about GM expecting a kind of positive earnings trajectory. So the initial thought is that earnings can still go up next year versus this year, and then maybe if you can give us a little bit more detail on the various kinds of puts and takes to think about when modeling 2017?

Yeah. Itay, we'll have more to say on – at the Deutsche Bank Conference in January, specifically around the details on how we see earnings shaping up in 2017, but with that said, absent an unforeseen economic development either in the U.S. or China, and we certainly don't foresee any, we would expect GM to deliver improved EPS diluted-adjusted in 2017, which is consistent with what we've been talking about for some time now.

Great. That's very helpful. And then just secondly, can you help us a little bit more to think about how you're thinking about China in the fourth quarter, given the environment and the tax incentives, as well as what you're kind of seeing in terms of inventory levels and pricing going into the fourth quarter?

Well. I would say, there is certainly a little uncertainty around the tax incentive, and the way that will – when that may end, and that's had an impact on the strength of the Chinese market calendar year-to-date. Absent some announcement by the government, we'd expect Q4 to be strong as well in the range of 9% to 10% up year-over-year. We've seen, so far in October the industry in sales continue to run very well. We still expect to see strong equity income consistent with our guidance to generate about $2 billion of equity income for the year, and pricing continues to be a significant challenge. We've been able to offset that on a year-to-date basis with improvements in mix and continued material cost efficiencies. So it feels to me kind of more of the same in the fourth quarter, consistent with what we've seen in the first three quarters of the year.

That's very helpful. And just lastly maybe strategic question for Mary. I think, last month, John Zimmer from Lyft kind of predicted that the majority of Lyft's rides will be autonomous within five years. I was curious if that's – that comment is part of your plan with Lyft in terms of the on demand network partnership? And maybe, if you could give us an update on kind of how you're looking at the trajectory on these efforts going forward?

Sure. We are making great progress on the autonomous development. As I mentioned, we have a fleet now running, not only in San Francisco, but also in Scottsdale, so 30 vehicles on the road. And that's important because it's not just the miles, but it's really the experiences and the scenarios that they continue to learn every day and I'm very pleased with the team's performance. As we look at launching autonomous into the marketplace, we believe it will first happen in a controlled environment, in a ride-sharing environment, hence the alliance that we did with Lyft, as well as the work that we're doing with Maven. But as we see it going into ride sharing, that's because it will be geo-fenced, you're going to have limitations with speed and other limitations, and that's why the ownership will stay with the company in these first models as we continue to learn. And so, that path is very much on track, but I will say what is going to gate our launching of autonomous vehicles into the marketplace for consumers is safety. And we are working very hard with the experience that we have to do that in the safest manner possible because it does then really address the issues that we have of over 90% of fatalities in today – in today's U.S. streets are human error. And so, we think we can make a big dent on that so we'll be gated by safety, but once we feel that we've got the right system, we're working with our regulators, we have the scale to put those vehicles into production extremely quickly.

That's very helpful. Thanks so much everybody.

Thanks.

Our next question will come from the line of Rod Lache with Deutsche Bank.

Good morning, everyone. I had a couple questions. One is just, I was hoping you can elaborate a little bit on the outlook for pricing and profitability in North America. Yeah, you've done a very good job of keeping inventories at good levels and have had really good results on pricing. Of course everybody is noticing some increasingly aggressive actions from competitors, Ram (23:50) incentives are at 16% of average transaction prices. This quarter we're seeing a number of retailers talking about margin compression in new. This morning FCA talked about over 600,000 units of additional truck capacity in 2018, and I think, IHS is projecting something like 13% increase in GM production in Q4. So I was hoping, just in the context of all these things that we all see, can you talk about, number one, the GM production outlook and maybe a little bit more on the levers that you can pull to sustain 10% margins in North America as we look out to next year?

Yeah, sure. Let me start kind of at 10,000 feet and work my way down a little bit. I already spoke to our inventory level, and we feel our inventory level is appropriate given our dealer footprint, and what's really driven the increase in inventory which is filling out inventory on newly launched products and new entries that we didn't have before like the CT6 or the Envision as an example. And continuing to work on inventory for our compact crossover so that we have sufficient supply as we look to change those models over in 2017. From a pricing incentive perspective, clearly the market in general is getting more competitive and there is some aggressiveness from a truck perspective, but I step back and look at the overall strength of our three-truck strategy, the light duty, heavy duty and mid-size trucks, we've been able to maintain discipline around that, grow retail share and increase our transaction prices in spite of some of this, and I think, it's fundamentally driven by the very, very strong product, relative to the truck capacity coming on stream. We could sell more vehicles, if we have more vehicles from a truck perspective today, and hence one of the clear focus areas on the retail side of the business. You also need to peel the onion a bit on where are we – where is the industry actually adding capacity, is it in trucks, is it in SUVs, is it in crossovers, because again we believe we're well-positioned. We have dominant share in full-size SUVs and our full-size pickup trucks continue to perform very well. To your last point or how do we continue to see earnings be sustained from a North American standpoint, and I think, there's two or three fundamental drivers to that, Rod. Number one, we're running at different play and it's generating different results. We're very focused on retail in a very disciplined way. Our retail market share is up, we're less reliant on less profitable daily rental, and that's showing up in our results. We also have our very, very strong product launch cadence, so this year we fundamentally rolled over our entire passenger car portfolio, and next year we'll start the strong launch cadence of completely refreshing crossovers, small, compact and mid-size over the next 12 months to 18 months; and that's critical, that's a lot of volume, it's highly profitable and we expect to see that. We also expect to see continued improvements from a cost standpoint. North America fundamentally enjoys the large benefit of that $5.5 billion of cost efficiency, and as Mary indicated, we're looking to drive that even higher and that's going to be fundamentally from a material performance, logistics performance and we'll continue to streamline manufacturing and SG&A. Taking all that together, we're confident and constructive that under a plateaued industry environment that we can continue to sustain strong margins in North America like we have done over the past couple of years.

Thank you. And could you confirm that what IHS is calling for vis-à-vis GM's Q4 production; and on a separate track, if you can maybe talk a little bit about scenario planning for China? Right now your volume is up 9%, there's been some margin pressure, which you guys have pointed to, but you're keeping earnings flat. I'd imagine that some – to some degree there is some demand pulled forward. So if we were to think about a flat market in China or something significantly flatter, what would – how would that effect GM's equity earnings outlook?

Yeah. Let me – when you're talking about fourth quarter production, are you talking about total or trucks or what?

IHS is calling for North America production in the fourth quarter for GM, last I checked I think it was an October update of being up 13% year-over-year. I'm not sure if that's correct, but it seems like a fairly big increase just given the trends that we've been observing?

Yes. We worked through the launch cadence of our recently launched products, we would expect overall production to be up in the fourth quarter marginally from the third quarter, and obviously what plays into that are the Christmas holidays and everything else, but we would expect production to be up. Relative to China and the specific questions around planning assumptions in China, we've been able to maintain strong equity income and strong margins through continuing to launch new products, improved mix, and material performance which is fundamentally offset price headwinds. Obviously, this year the industry is running stronger than we expected, because of some uncertainty around the purchase tax incentive, if that was to end and the government was to announce an end to that, our planning assumption would be that – there could be some volatility in maybe the first quarter and second quarter of next year, but then we would still expect the industry to continue on that growth path towards 30 million units and as we've talked before, a little bit more volatile growth pattern and in the kind of low single digit range over the next number of years, again it really depends on what's announced from the government's perspective, we have no insight on that. We certainly expect the pricing dynamic to continue and that's why we're so focused on our product launch cadence and I would say similar to the U.S., our product launch cadence in China is heavily weighted towards SUVs and crossovers over the next number of years as well as Cadillac products which is going to help from a mix standpoint. All that said, more to say in January around specifics, but we would expect China equity income to continue to be strong. We would expect margins over time to be compressed. They're at somewhat unnaturally high levels at from an industry perspective for the foreign OEMs, but still be generating strong overall equity income.

Great. Thank you.

Thank you.

Your next question will come from the line of John Murphy with Bank of America Merrill Lynch.

Good morning, guys.

Good morning.

Just a first question on truck pricing, because there seems to be some hyperbole around elasticity of demand to pricing. I'm just curious, when you think about pricing on trucks and what you're seeing in the competitive environment, I mean if one competitor cuts price, do they tend to pull forward their own demand or do they tend to conquest sales, I'm just trying to understand what's going on here, because it really – there seems to be a belief that price cutting can drive significant conquesting and I'm just curious how you think about that?

Well, I think that you really need to peel the truck market down almost cab type by cab type and trim level by trim level, because price elasticity in our view becomes less relevant the more you move up from a trim level perspective and a cab level perspective. First, truck buyers are the most loyal of any customer. The loyalty rates of truck buyers are north of 60% and generally you are in the 50% range, so that's first, you are dealing with that aspect. Second, where there seems to be the most elasticity is at the very low end of the market. So, regular cab work type trucks and things like that, and I think that, you saw some of that play out last year when one of our competitors was very aggressive and we were losing share at the lower end, but still generating strong profits and good transaction price growth. And I think that's what we're seeing play out. So, I wouldn't paint the whole truck market pricing dynamic with one brush, you almost need to look and peel that onion back a layer or two layers. We're still performing exceptionally well up-level crew cab – our new up-level additions and higher trims that we're rolling out, and we've seen improved transaction prices and improved, actually, profitability on the current truck platform on a year-over-year basis and – despite some of the challenges at the lower end of the market.

Okay, that's very helpful. Then just a second question, could you just give us your leasing levels in the third quarter in the U.S., or sort of a percentage of sales? And what you think the industry roughly was in the quarter?

Yeah. The industry was – and this is broad strokes, John, but I think directionally correct, in the 27%, 28% range, and we're a little bit lower than that from a leasing perspective in Q3. 24% for us, and that's down from highs earlier this year of close to 30%. So, typically we would be a few percentage points below the industry average just because of the mix, less trucks are leased. So – but that's kind of where the dynamic's at – and what we're seeing is, lease penetration at an industry level is up kind of the same amount that subvented financing is down, right. As the market is dealing with low interest rates and people are still looking for payments that they used to get through subvented financing.

Got it, that's helpful. And then just lastly, I mean, on cap allocation, I personally would pretty much agree with the way that you're going after this. But clearly what we're seeing in the stock is there – the market is maybe disagreeing with cap allocation and where we are in the cycle. I'm just curious, would you ever consider storing more of this cash on the balance sheet to create a larger buffer and maybe calm some market concerns which appear to be out there, given what the stock is doing, and maybe taking advantage of a buyback or redistribution of capital to shareholders as the cycle progresses and maybe goes to the downside, or are you going to stay in the stalwart path of sort of $10 billion roughly of net cash and excess free cash flow above and beyond that will just be redistributed through buybacks?

Yeah. We did a lot of work around our original capital allocation framework in the targeted $20 billion of cash. We looked at the business. We looked at what it was going to take to run the business through the cycle, to ensure that we can continue to invest appropriately through the cycle, because that's one of the lessons learned, and to ensure that we could maintain the dividend through the cycle, through a typical 25% downturn. That is the basis for our targeted cash. We will continue to reevaluate that depending on market dynamics, but – and we do on a regular basis, but there was a lot of work to come up with that $20 billion. And fundamentally, we're making all the investments that we want to make from a capital spending perspective. We're making the investments we want to make from an innovation technology standpoint. And at the end of the day, $20 billion is what we really need to run this business and manage it through a cycle, maintain the dividends. So under that construct, what's available from a free cash flow perspective should come back to our owners, and we also have a revolver. Obviously, our intent was not to draw that in a downturn, but that's an emergency backstop in the event of some unforeseen issue or a deeper-than-typical downturn, and that's available to us as well.

I am sorry, Chuck, just one follow-up on that. I mean, you talked about $20 billion of gross cash. You didn't mention the net cash. I mean, is there a potential that you would consider taking on some leverage to buy back the stock? I mean, right now the market cap is 2.8 times your trailing EBITDA, it's pretty inexpensive growth basis right now.

Yeah. Going back to our overall capital allocation framework. First and foremost, invest appropriately in the business through the cycle to drive, sustain 20% plus return on invested capital and invest in the future for technology and innovation. Second, maintain an investment grade balance sheet, and we're targeting to run the company at a single A rating, because we think that's the right thing to do from a financial risk management perspective and to support GM Financial, which will ultimately lead to significantly improved earnings at the finance company, but also at the car company. So, we don't – we feel today, when you look at our overall external debt and our – the position of our underfunded pensions, that we have the appropriate amount of leverage. We do not want to overlay financial leverage on top of operating leverage in this business, because that's another lesson learned from the last significant downturn that we went through.

That's very helpful. Thank you very much.

And our next question will come from the line of Ryan Brinkman with JPMorgan.

Thanks for taking my question, which is on Europe. I think that the guidance back in July was maybe $400 million of Brexit impact in the back half of 2016 or $800 million annualized, but it looks like you called out just $100 million in 3Q or more like $400 million annualized. So, with a quarter's worth of results in Europe post-Brexit, do you now have a different assessment of the annualized financial impact? September SAAR in Western Europe, I think, was like the strongest since May of 2009. I wonder if maybe when you guided to the annualized impact back in July, if perhaps you had assumed lower industry volumes that have yet to, at least so far, materialize.

Yeah. Let me go back to what we talked about in July, because I think it was you that asked the question, Ryan, when we were talking about the $400 million impact in the second half of the year and you kept pushing me on, what's the calendar year impact. And I think I said early days, but an indication would be, take the $400 million and multiply it by two, right. A full year impact of the second half, pound sterling only, without a lot of insight on what was happening from an industry perspective and everything else. And I'll circle back to that in a minute, but I just wanted to kind of set the foundation for that $800 million. It wasn't a well-studied kind of guidance. It was a general directional answer to a conservation you and I were having on the last earnings call. We did guide to the second half impact of $400 million. We are holding to that guidance. What manifested itself was $100 million in the third quarter. So, that would leave a residual $300 million in the fourth quarter on the basis of our crystal ball today on where we're landing from a pound sterling perspective. The reason, it was more backend loaded, obviously, we had some hedges in places that helped in the third quarter to mitigate that to a certain extent. And the pound is we can further, since we provided that guidance. So, we still expect, for the second half of the year, in the range of $400 million headwind associated with Brexit, primarily related to the pound sterling and that's primarily now a fourth quarter issue, about $300 million of that residual would fall into the fourth quarter, which will certainly make our challenge of breakeven in Europe…

Very helpful color. Thank you. My final question is on consolidated international operations, looks like the loss there narrowed quite a bit sequentially, that was actually the biggest difference versus our model. So what is the plan and sort of the cadence to walking this region back to say breakeven? Maybe remind us of the timing and the magnitude of the savings coming from winding down manufacturing costs in Australia and if you could share if there are any other catalysts or step changes in profitability in the region that investors might have to look forward to?

Well, I would say, our approach in all of our operations, including the consolidated operation is to put in place, a path to drive these businesses to viability and appropriate returns, and if not to take action. And exiting manufacturing in Australia was one of those. We should be through that by the end of 2017, all else equal that would be worth a $100 million to $150 million a year in savings from a manufacturing cost perspective once we exit that activity. Again scheduled at the end of 2017. We've already exited or significantly downsized our vehicle manufacturing, car manufacturing activity in Thailand. We ceased manufacturing in Indonesia. I would suggest we are looking at all of our operations there and as we've indicated in the Q, there could be additional significant restructurings, depending on whether we can identify the path forward, because we're just not going to absorb the kinds of losses that we've seen there on an ongoing basis. So, I would suggest there is likely more actions to come.

Okay. Thank you.

Your next question comes from the line of Adam Jonas with Morgan Stanley. Adam Michael Jonas - Morgan Stanley & Co. LLC: Hey, Mary. I got one for you first and I'd be particularly interested in your answer to this question as an engineer by training and profession. So, as the ADAS – and the question is about ADAS, cars still with steering wheels but a lot safer, and our dialog with suppliers and regulators, especially as these systems mature in the market and they get the data to show the vehicle-to-vehicle and vehicle-to-pedestrian empirical data the reductions are very significant, sometimes 30% or 50% depending on the accident. My question for you is, Mary, how much does it cost per unit to make your vehicles order of magnitude like a third safer, 30% or 50% safer? Is it hundreds of dollars, is it a thousand, or is it in the thousands of dollars, just order of magnitude?

So, Adam, we don't really disclose that type of pricing from a technology perspective. What I would say is if you look at our vehicles, there's tremendous safety features on them already, whether it's airbags or the lane detection, emergency braking, rear object detection, and even when you back up from a perpendicular perspective. And a lot of the technologies on the vehicle today that we have put on and offset to a large extent the technology for safety are finding cost improvements, material cost improvements and just overall design and efficiency of the vehicle. And the way I look at it is all this technology is making the driver safer today on the roads. We'll continue on that journey, but I think the real step function happens with autonomous, because you really then get to a point, again, if you've implemented autonomous very safely and really understand all the dynamics that will happen, there's an infinite number of situations that drivers and our vehicles will see and how you respond to those is going to be critical. That's where you get the step function improvement. So I don't see it as it's $300 gets you this, $500 gets you this. That's not really the way we look at it. We continue to look at how do we incorporate the safety technology into the vehicle, looking at affordability today, and I would call that the evolutionary path, and then autonomous is more of the revolutionary path, and we're working to drive those costs down, but again we have ensured those in detail. Adam Michael Jonas - Morgan Stanley & Co. LLC: Okay. The reason why I ask is because, although fully autonomous is a noble initiative, and it's coming and to get the real 95% to 100% type reductions, it seems we can't – if there are technologies that are vastly easier to implement and more affordable in an ownership model that can lead to a 50% reduction, that's worth implementing as well. It just raises industry questions about the insurability of the vehicles that you're selling today without these systems and the value that they would have in the secondhand markets. We'll continue that discussion. Maybe, Chuck, a question for you then lastly. You mentioned the goal of $6 billion of adjusted auto free cash flow. When I look year to date, though, and take the $10 billion of automotive operating cash flow and I take out CapEx, I get a number of $3.2 billion. So I guess when you say adjusted, there are some changes you're making to that number; because you're not implying you're going to make almost $3 billion as free cash flow in the fourth quarter. Is that fair?

Yeah. The noise in that is pension. So... Adam Michael Jonas - Morgan Stanley & Co. LLC: Okay. All right.

So we funded that with debt, so you just add the $2 billion, so the $3.2 billion you get $5.2 billion of free cash flow ex-pension contribution. Adam Michael Jonas - Morgan Stanley & Co. LLC: Okay. Because I guess the big investor question we're getting is, that is a competition for the cash, right. And even if it's not every year, they are with some regular frequency. So like last year you made $5 of earnings; but the free cash flow per share, including the pension contributions and a lot of other unusual stuff, was about $1.30. So there was a big gap. You're narrowing that gap this year. Maybe if you include the pension funding, you get to close to half like (49:13) to maybe if you do $6 plus of earnings and you do $3 of free cash flow a share, but you still have that gap. So the question, Chuck, is will this gap be narrowed so that your $6 or so of earnings can really reflect cash earnings as well? And what are the factors you think that can drive the narrowing of that gap? Thanks.

Yeah. First, just, let's go back to the pension just to be clear, that was a debt-for-debt funding, right. And for display purposes, on a GAAP basis, it's taking out of operating cash flow, obviously free cash flow would add back in because it's debt-for-debt. So the $5.2 billion is the right adjusted free cash flow number and consistent with our $6 billion target free cash flow at the end of the year and that's what we'll apply to our capital allocation framework. When you look at our overall difference between EPS and cash, obviously, we have cash taxes, and that's going to be and have been roughly $1 billion a year. Capital spending is higher than D&A, because we've underspent for a number of years and it's going to take a while to catch that up. And pensions; at the end of the day, we have pension income that is non-cash that gets reversed. So I would say that, as we look forward, the way I think about it is our conversion ratio should improve on a go-forward basis, because incremental EBIT is highly levered to cash flow on a go-forward basis and that's what I've talked about before. Adam Michael Jonas - Morgan Stanley & Co. LLC: So the gap has got to be driven by operational improvement. There is nothing else in the adjustments that you see improving that gap. That's how I'm interpreting that.

Well, over time, there will be puts and takes. D&A is going to obviously catch up, and our cash tax rates or our ultimate cash tax payment will increase versus where we are today over time, and we'll start to accrue GMF dividends. But over the next two years or three years, it's going to be operational improvement and leverage. Adam Michael Jonas - Morgan Stanley & Co. LLC: Okay. Thanks, everybody.

Yeah.

And your next question will come from the line of Brian Johnson with Barclays.

Yes. Good morning. A quick housekeeping question and then a more strategic question. Housekeeping is, Chuck, you had mentioned fourth quarter production could be sequentially up. Just to clarify, IHS forecasts a lot of (51:53) 14% year-over-year in 4Q in North America. That's down somewhat sequentially just given the holiday. So just wanted to clarify what you're expecting.

So we expect sequentially 2016 Q4 versus 2016 Q3 to be up slightly, maybe 3% on a FUS basis, right, our factory unit sale basis, which would be production plus imports versus 2015 Q4, it looks like we'll be up 150,000 units or so, all things equal, on the basis of our outlook right now.

Okay. The more strategic question is China over the summer has made more noise about new energy vehicles. Europe, culminating in the German Bundestag floating an idea of eliminating ICE sales by 2030. So (52:57) just three propositions. One, do you think there is a realistic possibility that China and Europe actually get the EV penetrations mid next decade, well ahead of the U.S.? Two, given their penchant for favoring the home team, how are you positioned? And in particular, we hear most of what you're doing around electrification and autonomous for U.S. markets; but how are you thinking about those internationally? And three, how do you think it's going to affect the mid-term to longer term profitability of those regions?

So clearly, we believe that China is going to lead in the penetration of electric vehicles into the market, and that's why we've announced that we have 10 new energy vehicles coming out. I would say we're also the only OEM that actually manufactures batteries in-country right now. Clearly, we have the strength of the products that we have available to sell globally, with the second generation Volt as well as the Bolt EV and the Ampera-e, along with many other electrified products in China. So we definitely see that trend. I think one of the things, though, and this is where we also have an advantage with our PATAC Engineering Center, that we can really leverage the supply base and that volume in China to really help us globally from a electrification perspective, and we intend to do that. I would also say, from a European perspective, we definitely are seeing more of a move, and we'll be announcing the Ampera-e next year that, with some of the different issues associated with emissions, there is a much stronger interest and focus on electrification. We clearly think the highest market will be China. I think we'll see progress in both the U.S. and Europe. I would also say, though, we've got some very good diesel products that we're launching, both cars and trucks, that are getting very good market reception. And so I think it's too soon to exactly call how the penetration is going to be, but definitely probably more significant than we thought maybe a year or two ago. And clearly, we've got to get the scale and get the engineering work done, that we can have minimal impact from a margin perspective.

Okay. And I guess, similar for autonomy, do you think China will accelerate and, maybe not surpass the U.S., but pull even with it, just given the density of the populations in the urban centers?

Again, there's so many issues that have to be resolved to be able to say who is going to be first. Not only is it getting safe technology deployed – and I think we're in a excellent position, that we intend to be among the first or the first with safe autonomous vehicles. And then we do have the capacity to build those at scale. But you have to look at how the regulatory environment will impact around the globe, and in China, there are certain restrictions to mapping technology as well. So I think there is a lot to play out to right now call who is going to lead.

Okay. Thanks.

And our final question today comes from the line of Joe Spak with RBC Capital Markets.

Good morning. Thanks for squeezing me in here. The first question was just on the incentive spending commentary in North America – or in the U.S. I guess, that you mentioned earlier, down as a percent of ATPs in the fourth quarter versus third quarter. And you mentioned the October data point. But, first of all, isn't that always the case at this time of year as the model mix changes? I guess what I was wondering is if you could give us a sense of, if you believe, on a like-for-like basis, incentive spending for the industry and for GM will be flat, up, or down on a year-over-year basis in the quarter?

Well, I guess I would just look at the trend year-to-date. The trend year-to-date is that the industry, the incentive spend as a percentage of transaction price through the first three quarters of the year is up on a year-over-year basis. Off the top of my head, 60 basis points to 70 basis points, so somewhere from a 10.6% to 11.3%, we're generally in that range as well, maybe 11.4%. I would expect, and you're right, typically, depending on how the model changes are going for all of the competition, Q4 has a tendency to ramp down a little bit, because you've launched the new model of your vehicles, for us specifically, because we're in really good shape from that perspective, but we'd expect the industry broadly to follow that same trend. But I'd also expect on a year-over-year basis, it will be up, consistent with what's happened in the first nine months of the year.

Great. Okay. And then one quick one on the free cash flow guidance, which I know you reiterated for this year; and I think back in January over 16 to 18, you called for a $6 billion to $7 billion range. A, I guess I want to understand if you think that range is still valid? And then I know, Mary, at the beginning of the call, you said some investment might be funded by greater-than-expected cost efficiencies. But can you give us an indication of how much within that $6 billion to $7 billion is actually a headwind from spending on items such as electrification, autonomous, or other ventures?

Well, one, we'll have more specific guidance on beyond 2016 in January, but generally speaking, we would expect to generate strong cash flow over the next number of years, and we haven't changed our perspective on that. And this year's $6 billion is, we're on track to deliver that. Relative to this, the second question, and I'll let Mary speak to it as well. But free cash flow is after we make investments and everything else. So, obviously, if we expect to continue to maintain strong cash flow, that's after we've funded investments in autonomous or engineering for autonomous or future technologies, just as – broadly speaking.

That's absolutely correct.

Yes. I guess what I was wondering is, said another way, how much higher would it have been if you weren't making investments (59:35)?

Yeah. I kind of figured that was your question. And I'm not quite ready to – think we're ready to go out and start to saying, we're investing X on autonomous vehicle or future technology engineering, because you got to kind of – what technology are you speaking to specifically? I would suggest, versus the previous plan as we really started to ramp up. Our activities around autonomous vehicles, the amount that we're spending does not have a B attached to it.

And I would also say, the efficiencies that we're seeing when you can reuse our contextures that we have on – that are launching or have on the road right now and you look at the development costs to do the next-generation architecture versus reusing, that's all as I mentioned, investment that can be redeployed in the transformative technology.

Okay. Thanks lot, guys.

Thank you. I would now like to turn the call back over to Randy Arickx.

And I'll hand it over to Mary for closing remarks.

Great, thanks. Thanks, everybody, for participating. I hope you can see we are working hard to make sure the core business is operating in a very disciplined fashion and we have the opportunity for continued strong performance. And that is key because we are then investing in the transformative technologies that we've just talked about, building on our leading connectivity, building on the strong options that we have in the marketplace now and we'll continue to launch with the Volt, with Bolt EV and with other electrification products, as well as our work in fuel cells. We are being very aggressive from an autonomous perspective and leveraging the knowledge that we have to do that safely, and then also from a sharing perspective with both the alliance with Lyft and with Maven. So we understand this is a ever-challenging global marketplace, but I hope that you see that we are a very focused and disciplined leadership team and we're going to continue to execute our plans and drive profitable growth. I really appreciate everybody participating today and I look forward to talking to you next year.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you disconnect your lines. Thank you. Have a nice day.