Good morning. My name is Amy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2016 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. Thank you. Amy Giuffre, you may begin your conference.

Thank you and good morning, everyone. You can access the slides supporting this call on harley-davidson.com. Click Company at the top of the homepage, then Investor Relations, and Events and Presentations. Our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in our latest earnings release and filings with the SEC. Harley-Davidson disclaims any obligation to update information in this call. This morning, our President and CEO, Matt Levatich; and CFO, John Olin will be hosting the call. Matt, let's get started.

Thanks you, Amy. Good morning, everyone. We set out in 2016 to raise our game and drive demand by leveraging the capabilities we've built since the downturn to solidify our leadership position and attract new riders around the world to our sport. Capabilities that we've built like our improved time-to-market and enhanced stability to create high-impact new motorcycles; our flexible, responsive manufacturing system designed to meet demand in dynamic global markets; our expanded reach with new dealers in emerging markets and our ability to inspire our outreach customers; young adults age 18 to 34, women, African-Americans and Hispanics to join our sport and brand in the U.S. While overall U.S. industry performance was soft, I'm pleased with how we raised our game to drive demand and adapt throughout the year. Importantly, we drove market share strength in the U.S. and picked up one full share point on the year with two points of share gain in Q4. In August, the Milwaukee-Eight engine debuted on all of our new Touring bikes along with a redesigned upgraded suspension. We delivered what matters to riders, more torque and horsepower for a way better ride on our class-leading grand American Touring bikes. We had our best ever retail sales in Asia-Pacific and in EMEA and maintained our number one position in key markets like Japan, Australia and Canada. We increased our reach by adding 40 new dealer points in places like the Philippines, Belgium, Italy, Vietnam, Norway, New Zealand and Croatia to name a few. We grew ridership in the U.S. by training more than 65,000 new riders through our Riding Academy and we invested in our manufacturing capabilities by retooling our Pilgrim Road Powertrain Operations and by implementing our ERP solution in our Kansas City plant, building our strengths to compete even more effectively in the years ahead. While we made great progress, our demand-driving efforts only partially offset the impact of the down U.S. market, the U.S. is uniquely important to our business, so our long-term plans reflect the challenges in the market as we must adjust to accommodate what we believe is the new normal for U.S. market performance. John will go through the final numbers for 2016 and review our guidance for 2017; then I'll come back and provide the long-term view and direction for the company in 2017 and beyond. John?

Thanks, Matt. Today I'll provide additional insight around our fourth quarter and full-year financial results found in our press release and supporting slides. The summary of fourth quarter financial results starts on slide six. During the quarter, revenue was $1.11 billion, net income was $47.2 million, and diluted earnings per share were $0.27. Operating income from the Motorcycles segment was up $2.9 million or up 45.6% from last year. Segment revenue was down 7.4% in the quarter behind an 11.9% decrease in motorcycle shipments. Gross margin as a percent of revenue decreased versus prior year quarter, as a result of unfavorable currency exchange. SG&A was significantly lower during the quarter. Consequently, operating margin as a percent of revenue improved by 0.4 percentage points. At HDFS, operating income in the fourth quarter was down 1.2% year-over-year. We remain focused on delivering strong margins and strong returns over the long term. Our results in a very challenging year underscore both our commitment and capability to perform in a much more competitive and dynamic marketplace. Q4 worldwide retail sales of new Harley-Davidson motorcycles are summarized on slide seven. Worldwide retail sales of new Harley-Davidson motorcycles in Q4 were down 0.5% versus prior year. Retail sales were down modestly in our international markets during the quarter, partially offset by slight growth in the U.S. The global competitive environment remains intense, but we believe our increased investments in driving demand and product innovation are working. The positive response to our Milwaukee-Eight engine, for example, drove significantly improved Touring sales and overall Harley-Davidson market share gains. We continue to be encouraged with our ability to stabilize and grow market share across many markets, doing so in ways that leverage our premium brand and protect profitability for the company and our dealers. For the full year, worldwide…

Thanks, John. As I stated in my opening remarks and as John noted in his comments, while 2016 was a difficult year, we made significant progress on our demand-driving objectives. Our progress and achievements in light of the industry headwinds show we have both the capability and the resolve to compete and win now and in the future. We'll continue our demand-driving focus, but we need to do more, particularly in the U.S. to drive industry growth and assure the vitality of the sport long term. Our long-term 10-year strategy has the headlining goal to build the next generation of Harley Davidson riders worldwide. To accomplish this in the U.S., we'll focus on growing ridership. Internationally, we'll focus on growing our reach and impact. Globally, we'll focus on growing share and profit and let me underscore that we're going to do both. This is not an or but an and condition, an and condition to drive both creativity and discipline in every business decision we make. Our plan has specific, measurable actions in the short and long-term to build riders, increase access to our products, enhance the impact of our products, grow market share, and generate profits to invest back into the business and return to our shareholders. Our plans leverage our growing capability to drive demand for our sport and brand. This long-term strategy is the next chapter in our company's incredible history. Now, let me outline how we plan to execute our strategy in the near term. In the U.S, we must attract more new riders to the sport, as the leader in this important market we have a responsibility to assure the long-term vitality of motorcycling here at home. We believe there's untapped potential that exists and we're going after it, with greater emphasis on inspiring and…

At this time, we will be conducting our question-and-answer session. Your first question comes from the line of Jaime Katz with Morningstar. Jaime, your line is open.

Hi, good morning. Thanks for taking my questions. I'm curious about the cadence over the remainder of the year of shipments. It seems like you guys might want to back-end-load the new model year shipments, which would indicate that perhaps the back half of the year would be up at a high single-digit pace rather than try to shove incremental 2017 inventory into the channel in the second quarter. So could you help us think about how we should think about shipments going in over the remainder of the year?

Thanks, Jaime. This is John. As we look at the overall guidance for the year, we are looking at shipments to be flat to prior year to down modestly. As you noted in the first quarter, we are looking for shipments to be down 15% to 20%, and consequently for the ensuing three quarters, shipments will be up on a year-over-year basis. The reason we're taking down inventory or taking shipments down in the first quarter is to take overall inventories down. As we look at the U.S. industry going forward, we expect it to be a bit softer. We want to make sure that our inventory is as tight to keep the premium nature of the brand intact, and also to help dealers focus on selling through the model year 2016. Beyond that, Jaime, I can't give each quarter and the growth that we expect across the ensuing three quarters just to say that we're taking it out of the first quarter, that'll also have an impact on our gross margin cadence throughout the year, and pushing it in the back half, and taking the right action at this point to lower inventories as we exit the first quarter, and we would expect inventories to remain below prior year levels quite a bit through the third quarter.

Okay. And then that Sportster/Street segment didn't grow as fast as in the past, and I'm curious if there are any trends you guys are seeing emerging on the low end of the market? I mean average selling prices were up, so that was good, and a lot of that was allocated to the increased demand in Touring bikes, but is there anything changing on that low entry-level where you guys were really gaining traction?

I'm not sure exactly what you're referring to, Jaime, in terms of our product introductions, which we certainly wouldn't share. That segment remains very important for numerous reasons. And in 2015, overall, the segment grew in a market that was down 5.2% – I'm speaking of United States, in the United States. And so, we continue to – be a very important segment to us and we'll continue to look at investments as we move forward in the small Cruiser segment.

I'll just add to that, yeah, Jaime, that when we talk about these segments, it's becoming increasingly important to think about it in a world of motorcycle sales and demand. And the Street and Sportster segment are significantly more important to the company internationally than they are in the United States. And so, when John talked about making investments, we look at it from a global perspective and not everything we do is going to be a homerun, if you will, in demand in the U.S. but it's in a bigger picture that we're doing it.

Thank you.

Your next question comes from the line of Greg Badishkanian with Citigroup. Greg, your line is open.

Great. Thank you. Could you talk a little bit about the impact, if there was any, of sales for Harley retail sales or the industry from the election? And then what's your expectation for retail sales for the U.S. motorcycle industry in 2017?

Thanks, Greg. It's really hard to parse out what the election caused prior to the election and after the election. As we look at the – how the year unfolded in 2016, the industry actually was pretty firm through the first four months and it was in May that the industry started the decline. Whether that had something to do with the election, I'm not sure, but the decline was pretty significant. And coming out of the election, the industry was not down as much as it was when you look at May through October. But again, Greg, we have no way of parsing out what that is or the consumer uncertainty before or after or what it might be. So, but in general, as we look forward to 2017, we are certainly concerned about the economic uncertainty that exists around the world. From a macroeconomic, from a political and from a consumer perspective, things are somewhat volatile, and so – and that's factored into our overall guidance.

And then second question, how much do you think your sales were? Can you quantify it anyway from just being low on model year 2017 inventory? And if you had the appropriate levels, maybe how many points of sales do you think that would have added?

Yes. Greg, there is no way for us to quantify that. We certainly know that the amount of product that we had in terms of model year 2017 versus model year 2016 compared to the prior year was significantly lower. And as you recall, the way that 2016 unfolded, the way the market softness hit, we ended up with excess model year 2016 motorcycles and very high inventories coming out of the third quarter. In fact, they were up 9,700 units. And our focus to reduce that and hit our target, which was flat in the U.S., which we did required us to slow shipments of the product that was selling the best, and in particular the Milwaukee-Eight. So, we're confident that it did have an adverse impact on retail sales in the fourth quarter. We believe that's going to carry through to the first quarter as we continue to constrain model year 2017 shipments. But Greg, there's absolutely no way to parse that out as a percent.

Sure. Thank you.

Your next question comes from the line of Gerrick Johnson with BMO Capital Markets. Gerrick, your line is open.

Hey, good morning. So, of the 26,000 bikes sold at retail in the U.S., how many of those were 2016 models? And how did that ratio look compared to 2015? And similarly, of the 2016 models that are currently in U.S. inventory, what is that rate per dealer? So what's a typical dealer have of 2016's versus everything else right now?

Thanks, Gerrick. This is John. I won't get into specifics as to what that percentage is, but to say that we exited the end of the third quarter and the fourth quarter at historically high levels of carryover product, and again that was how the industry unfolded in 2016. So we had significantly more at both those time periods of model year 2016 in terms of overall inventory. And our goal and our focus is to get them flushed out by the end of the first quarter, and that's one of the reasons that we're taking inventory down in the first quarter is to push that focus on to the sell through of the model year 2016, and we expect to end – the end of the first quarter in line with historical levels of mix between the new product and the old product.

All right. Thank you.

Your next question comes from the line of Joe Spak with RBC Capital Markets. Joe, your line is open.

Hello. Thanks for taking the question. The first question is I was wondering if you could just – I know you provided a little bit of additional color on the gross margin. Can you help us understand exactly the trajectory as we go through the year because I know you mentioned better absorption, but then you also talked about significantly higher launch costs for model year 2018? And it would seem also like commodities might become more and more of a headwind as you go through the year. So, how are you thinking about some of those factors?

Thanks, Joe. Again, looking at full-year gross margin, we would expect it to be in line with 2016 and the positives is really in pricing. So, with the Milwaukee-Eight, we are able to price for that value. And in addition to that, as we roll out our model year 2018, we would expect addition pricing on that. That price favorability, which is obviously a big benefit to gross margin, will be largely offset. The biggest piece of that offset is with currency, foreign currencies. And we're kind of entering into 2017 in a weak spot. We saw a tremendous devaluation of – or strengthening of the U.S dollar in the fourth quarter of 7%. To put that in context, going back to the fourth quarter of 2014, the U.S dollar strengthened 6% in that quarter. So it's actually worse than it was two years ago. So, we're concerned about currency going forward and expect that to be a $20 million to $25 million hit if exchange rates stay at the current spot rate levels as they did in the early part of this year. So, that'll be a detractor from the benefits that we get from pricing. Secondly is commodities, we do expect to turn a bit unfavorable. We've had a good run with several quarters of favorable year-over-year costs, and we believe that we're starting to see some of those commodities turn a bit of what we believe are the bottoms. So, we would expect some un-favorability. And then, finally, manufacturing expense, we expect manufacturing expense to be somewhat unfavorable. The biggest driver of that is higher depreciation. And given the investments that we made in 2015 and 2016 in capital, those are coming through in higher depreciation in year-over-year basis in 2017. And in terms of start-up costs, we hit a lot of startup costs certainly in 2016. And, of course, those will not repeat. However, as we look to model year 2018, we're very excited about that. It is a big model year for us, and it will be – it will come with significant start-up costs as well. And so those tend to negate each other. And as you look at overall manufacturing expense, the biggest driver on a year-over-year basis is higher depreciation, and that we would expect to be in line in terms of overall gross margin with what we saw in 2016.

All right, thanks. And then two quick housekeepings. One, can you tell us what you are targeting U.S. dealer inventory to be down on an absolute basis in the first quarter? And then on the credit side, provision for retail loan losses, it's been like a $8 million to $10 million headwind the past couple of quarters. Do you feel you're properly provisioned now, or should that continue to be a headwind?

Great. Joe, number one, on Q1, we will not give a specific inventory level. As a matter of fact, we don't give any quarter at any time the specific inventories out in the dealer network. Sufficient to say that given the fact that we are taking down our shipments by 15% to 20% on a worldwide basis, we certainly do not – we expect inventories to be down quite significantly, and it will be a large percentage – on a large percentage basis at the end of the first quarter. We will hold that inventory out for the ensuing three quarters of 2017 and ending the year at about flat inventories as we exit in the United States. We would expect international inventories to grow as we grow that dealer network. With regards to the provisions, so as you look at 2016 and the provisions that we built on a year-over-year basis was unfavorable by about $40 million. About a third of that is due to higher provisions for forward-looking losses and to answer your question, Joe, we feel very good about the provisions that we've set up and we've got a very robust process to make sure that we're taking into account everything that's happening in the portfolio and we're providing for the future. And we feel very good about HDFS business, the portfolio that we have. We are looking at various underwriting changes that we made in oil-dependent areas, but we feel fantastic about the business moving forward and it's very well provided for.

Thank you.

Your next question comes from the line of Rod Lache with Deutsche Bank. Rod, your line is open.

Thanks. You outlined a number of pluses and minuses for 2017 that give us the flat margins. I was hoping to just get a couple details first on what the magnitude of the restructuring savings would be that you are expecting in 2017. I know some of that's offset by some initiatives. And what is the magnitude of the commodity headwinds that you are expecting?

Thanks, Rod. With regards to the savings, as we had talked about, we took a charge in the quarter of about $18.2 million. We would expect the savings of that largely from employee costs, but other things that we did as well to yield about a $30 million benefit in 2017. If you look at our overall guidance for 2017, Rod, it's flat to prior year, generally in line with prior-year SG&A spending. So, somewhat similar that you saw in 2016, which was flat SG&A, but an increase in our investment in demand-driving activities which in 2015 was nearly $60 million. 2017 will be similar as we are going to see flat SG&A on a full-year basis, but we will spend more on our demand-driving activities, which includes marketing, product development and various growth initiatives that we have that'll pay dividends in 2017 and well into the future. With regards to...

Okay. Yeah. Go ahead.

With regards to the commodity costs, we've got an expectation but these are markets. We do our best to hedge in the near term to limit the amount of impact in any given year. We don't have a number to provide. Sufficient to say that – and you can see it in the fourth quarter, we were flat in the previous quarters. We had generated favorability of about $18 million that we're feeling it turn a bit and we would expect it to be somewhat of a headwind as we move into 2017.

Okay. And if I could just follow-up, you mentioned used vehicle pricing being tough. There's obviously a pretty competitive environment and rates are starting to rise. How are you thinking about that vis-à-vis the pricing strategy on the 2017s? Is that something that is a factor that affects the ability to sustain that strategy? And then just a housekeeping number; on HDFS, what was the reserve as a percentage of receivables at year-end?

The reserve as a percentage of receivables was just under 2.5%. So, Rod, with regards to the used bike question, if I'm understanding right is we are experiencing softness and the industry is experiencing softness on used bike prices. From an industry perspective, we've been seeing that for eight straight quarters, average overall industry used bike pricing has been falling. We know that puts pressure on the top line. But you're asking about – our strategy is to come out with the products that our customers are desiring and to add significant value to those products. Rushmore is a great example, certainly the S models, and most recently, the Milwaukee-Eight Touring bikes. For that, we are pricing for the value of the product – or the features and benefits that we're adding, and a knock-on effect of that is that when you come out with highly innovative product, it pushes used bike prices down, and we're well aware of that. And not only we're doing it, the industry is doing it and coming out with better product, which is forcing used bike prices down. In the short term, that does put a headwind on new motorcycle sales for both Harley and the overall industry. But there's a lot of good in the used bikes that Matt mentioned in his opening comments of once we bring a customer in to Harley-Davidson, they're in for the duration. Repurchase intent is over 90%, and that comes with a revenue stream as to whether that individual is riding to Sturgis, stopping in dealerships, buying t-shirts, motor clothes, having their bike serviced and the like using our credit card, being a HOG member and all those things that happen. So, as we see the softening of used bike prices, it is good for the industry overall because it's bringing new people in that might not have not joined motorcycling. And certainly, in Harley-Davidson in particular, our used bikes act as our value brand, and they are competing against the new products, new motorcycles from our competitors, and again, that customer is with us for a long time. So, we are seeing this price gap widening, and it's because of the value that we're adding to the motorcycles, and it's just part of that new normal in the United States that we're going to have to work through and compete with. And we feel we did a real good job of that in 2016 by gaining a point of market share, with expanded price gaps to the competition, and expanded price gaps between our new and used product. So with regards to that, we feel pretty good as we move into 2017 and our ability to compete.

Great. Thank you.

Your next question comes from Craig Kennison with Baird. Craig, your line is open. Craig R. Kennison - Robert W. Baird & Co., Inc.: Thanks. You have to be pleased with your efforts to train 65,000 new riders, but it does suggest that conversion is not where you want it to be. What can you do to improve conversion rates?

Thanks, Craig. This is Matt. It's a good point and I think there's a lot of learning going on throughout the network on that very topic. So first of all, there is an opportunity that we have with capacity at existing dealer points. Second is adding more dealers to the Riding Academy program, and then working with every dealer on ways to improve that conversion including, to John's prior point, considering how used bikes can play a role in that dealership relationship and in that long term relationship with the customers. So there's a good half a dozen things that are going on that the teams are working on, on that very point. And it's probably one of the higher leverage opportunities that we have to identify the right type of people coming in, make sure they're nurtured through the process, and just to give a quick anecdote, my 17-year-old son took Riding Academy and the comment that instructor made to the entire class at the end when they had all passed, he said, you know, you're not qualified to ride around in a parking lot. So there's a lot more learning and it has to go on to be confident and enjoy riding on the road. And some of these things are part of our thinking to bring into the mix to enhance that conversion rate over time. But we're all over it, and we see it as a tremendous asset that we have that's got a lot more leverage in it. Craig R. Kennison - Robert W. Baird & Co., Inc.: Thank you.

Your next question comes from the line of Felicia Hendrix, Barclays. Felicia, your line is open.

Hi. Thanks for taking my questions. So John, in your prepared remarks you put out a few teasers about 2018. You said the increased cadence, there'd be an increased cadence in frequency of the new product launches. And I know I'd be pushing the wrong buttons if I'd ask you to give us some more color, but you brought it up. So I was wondering if you could say anything about that and perhaps demystify what you meant by increased cadence and frequency. And how you're balancing that with making sure you get enough of those out there, with making sure you don't over-ship. And then also can you just help us think about the U.S. international mix for 2017, how we should model that?

All right. I'll start with the second question first. I'll let Matt jump in on the new product cadence.

If you can hold me back, John.

If I can hold you back.

Don't hold back.

We're very excited about not only model year 2018, but over the next several years. With regards to international mix, as we had mentioned in the overall shipment guidance, which we expect to be flat to down modestly, we do expect the U.S. to be another tough slug in 2017 and we expect the U.S. to be down a bit. And consequently, we expect the international markets to be up. We feel real good about our international business. And in the core markets within our international business are performing very well. We opened up 40 dealerships in 2016, 20 of those, Felicia, coming in the fourth quarter. And if you take those 20 against the total number of international dealers, that represents a 3% increase in dealerships just in the fourth quarter, which we'll get a benefit certainly of that on a full-year basis in 2017. And we've got a lot more dealerships to come, not only in 2017, but throughout the next several years. So, in terms of international mix, it will become a bigger part of our mix in 2017. And we expect that to continue on, on an annual basis as we go forward. So, again, we feel very good about our international business, and aside from demonetization and a switchover in Indonesia and the dealer network and pricing in Brazil, we feel very bullish on the international opportunities at Harley-Davidson.

So, on product, Felicia, I mentioned 50 new motorcycle models in the next five years. And that's a great number and it's an exciting number. What's more exciting about it is the impact of those products. And the comments that I made about what we've sort of delivered so far at being sort of the leading edge of impact in the marketplace, LiveWire, as a concept, obviously, Rushmore, Street, Milwaukee-Eight and the upgraded suspension being the leading edge of what we mean by impacting both our existing riders in renewing their passion for the sport and the brand, as well as reaching into new segments with some of the more atypical products that are in the portfolio. We're going talk more about this in our Analyst Day in the future, Q1 that we're working on. So, we'll get into more color about what all that means. But your comment about making sure we get the volume right, Milwaukee-Eight and the suspension are great example of what high-impact products do to drive demand in the market. You're also seeing the incredible discipline that we're bringing to make sure that we keep supply in line with demand. We would love to be and we could be absolutely be shipping more 2017 Touring bikes into the marketplace, and everybody would love the numbers. But we're being very disciplined to make sure that we maintain the right balance of inventory at retail in totality and the right mix, model year to model year, and that's going to be a very important discipline as we go forward, particularly because of the impact in the products that we're going to launch. And so, there's more to come in this space, but product drives our business. We've done a lot in the last five years to really dial in product development not just throughput, not just the time-to-market, not just the capacity, but our ability to put our finger on the point that's going to move customers at retail with the investments that we make. And I also made the comment in my prepared remarks that we're doing all these within the existing investment and return profile that we're committed to doing it right and getting the right kind of product out there that's going to move the market.

But on the cadence?

Well, you just have to look historically the sort of pace at which we introduced new models and the impact of those new models and what we're talking about looking forward, 50 new models in the next five years, is the cadence.

Okay. I thought you meant changing the cadences in the year. Okay, that's helpful.

Yes, the cadence of the new product introductions.

Okay. Thank you.

Your next question comes from the line of James Hardiman with Wedbush Securities. James, your line is open.

Hi. Good morning. Thanks for taking my call. Just maybe a clarification. Obviously a lot of discussion about inventories being too high as we exited 2016, but I think, John, you made a comment that inventories for the full year are going to be I guess flat domestically, up internationally. I guess why does that make sense given that we're too high as we sit here today, that we would finish at this same level? I don't know – does it assume better retail over the course of the year? How should we think about that? And then maybe just talk about inventory in terms of inventory turns and sort of what the right amount of inventory is. There's a comment that inventories are going to be down significantly coming out of the first quarter. I'm trying to figure out why that makes sense. Is it just a function of the sales being significantly less or is it somehow that you just feel better about your manufacturing being able to get the bikes out there more quickly, or was maybe last year's Q1 way too high on inventory itself? Thanks.

Thanks, James. I'm glad you mentioned this. If I was unclear, I apologize. We do not believe inventories were too high in the United States as we exited 2016. Our inventories were right on, spot on where we wanted them to be, which was flat versus prior year. So, I apologize if there's any confusion with regards to that. What we did say and I did say is that the mix of the models or the mix of the inventory that's out in the field at the end of the year is skewed higher than normal to model year 2016 motorcycles, which is a carryover model. We got too many of the older versus the new. So, with that in the first quarter, we're going to focus on helping the dealer network move those motorcycles through the – sell through of those motorcycles so that we start out the spring selling season or the beginning of the second quarter with a mix of motorcycles that's in line with historical levels between new model years versus the previous model year. And again, it's very important to our business model, it's always been our business model that we sell predominantly new where our competition predominantly sells old model years. And because of the way 2016 unfolded, we have too many model year 2016s and we've got a lot of focus to sell those vehicles through in the first quarter. And so consequently, we feel fine about the overall level of inventory as we exit 2016 and we're looking to keep U.S. inventories flat in 2017 as well. I think that's – anything else James? Did I miss anything?

Your next question comes from the line of Tim Conder with Wells Fargo Securities. Tim, your line is open.

Thank you and thank you, gentlemen, for the color here on the call today. Matt, if you could maybe expand a little bit on your comment about embracing the used market. What changes are you thinking about that you can share with us related to that? And how does that play into your prior commentary on used prices? And then, John, just a housekeeping item. Accounts receivable up pretty substantially in Q4; just any color on that if you would.

Yeah. Thanks, Tim. So, I think we just have to all kind of step back and recognize the tremendous value that the used bike marketplace plays in our business. We have timeless, classic, durable, awesome motorcycles that last a long time and they're part of a consideration set that customers have when they're looking at a new or different motorcycle. The simple idea here is to just wrap our arms around that because the statistics I shared from our proprietary research about the degree to which the loyalty and commitment exists in our used buyers for, A, another Harley; and B, a new Harley is a tremendous gateway into the brand and right now it's just part of the business that sort of happens that we don't spend a lot of time talking about on this call or with our investors, but it's a very important dynamic that we think if we wrap our arms around we can make better use of. So, that's what's behind it and there's going to be more to come on that, we're just formulating what all that means and how we move forward, but it's something that's very important to our business in the long term.

And Tim, with regards to accounts receivable, accounts receivables were up at year-end by 15%. Remember when you look at our balance sheet, accounts receivables are international motorcycles. All the domestic stuff goes over to HDFS and is accounted for there. So, when we look at that 15%, that was driven by motorcycle shipments. If you look at the split of motorcycle shipments within the quarter, motorcycle shipments were also up 15%. And so, it makes sense that receivables were up 15% as well.

Your next question comes from the line of David Beckel with Bernstein Research. David, your line is open. David James Beckel - Sanford C. Bernstein & Co. LLC: Well, hi. Thanks for the question. Just a really quick one about the impact or possible impact of proposed policy changes, I was wondering if you could help investors sort of frame the percentage of production in the U.S. you guys do that's exported. And on the other side of the equation, what percentage of your COGS are internationally sourced versus primarily U.S. sourced? Thanks.

Thanks, David. With all the talk with regards to potential policy changes, we believe that Harley Davidson is extremely well situated. Whether you're talking about corporate tax policy, infrastructure investment and then some of the foreign trade things that – or tariffs that might ensue. To answer your question is, the absolute vast majority of everything is made in the United States, manufactured in the United States and exported. We do a little bit of what we call CKD, which is complete knock down, in Brazil and India where we ship in parts and they assemble, and then a little bit of manufacturing of Street motorcycle in India. But the significant majority of our production as well as the majority of inputs into that production are coming from and sourced in the United States.

Your next question comes from the line of Seth Woolf with Northcoast Research. Seth, your line is open.

Hi, everyone. Thanks for taking my question. I was just curious. I think in the comments you referred to 1Q as having an adverse mix because of Touring shipments. So I guess when you try to clean up the inventory or right-size it, you're talking about principally a U.S. shipment reduction. I was wondering if you could just give us any color on what's going to happen internationally; help us with the model.

Yes. Good question, Seth. Most of what we're talking about in terms of lower shipments in are driven by the U.S. market. International markets, we do not expect a change in shipment patterns. And again, over the course of the year, we would expect inventories to grow modestly based on the increase in the overall dealer network. But what we are referring to when we talk about the lower inventories and lower shipments is driven predominantly by the United States. And with regards to the mix, it's very difficult to take the best-selling product that you have, and we're going to soften the mix of that a little bit more in the first quarter because the predominance of the carryover is in model year 2016 Touring motorcycles, and that will have an adverse impact on mix in the quarter and ultimately gross margin for the quarter.

And your last question comes from the line of David Tamberrino with Goldman Sachs. David, your line is open. David Tamberrino - Goldman Sachs & Co.: Great. Thanks for squeezing us in here at the end. Just wanted to get your take on any potential market share gains or room to take shares. You've seen a competitor announce that they are going to be winding down one of their product cycle, or products if you will. If you think that there's some opportunity at least there for you from a U.S. retail perspective to gain that share or not? Thanks.

Thank you, David. David, we couldn't be more pleased with market share in the fourth quarter and market share on a full-year basis that we gained back by spending on equity driven things and not price discounting. So, overall, we feel great about market share. When you look at the exit of Victory Motorcycle, all we can say is that we compete for every customer that's out there. And we welcome folks that have ridden Victory Motorcycles to come over to the Harley family and join the lifestyle that we have here, and we're very happy to compete for those customers going forward.

Yes, we are. Thank you, John. And thank you, everyone, for your time this morning. The audio and slide will be available at harley-davidson.com. The audio can also be accessed until February 14 by calling 404-537-3406 or 855-859-2056 in the U.S. The conference ID number is 48510058. We appreciate your investment in Harley-Davidson. If you have any questions, please contact Investor Relations at 414-343-8002. Thanks.

This will conclude our conference call. You may now disconnect.