Welcome to the Xylem Fourth Quarter and Full-Year 2016 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. I would now like to turn the call over to Phil De Sousa, Vice President of Investor Relations. You may begin, sir.

Thank you. Good morning, everyone, and welcome to Xylem's fourth quarter 2016 earnings conference call. With me today are Chief Executive Officer, Patrick Decker; and Chief Financial Officer, Mark Rajkowski. They will provide their perspective on Xylem's fourth quarter and full-year 2016 results, and discuss the full-year outlook for 2017. Following our prepared remarks, we will address questions related to the information covered on the call. In order to have enough time to address everyone on the call today, I'll ask that you please keep to one question and a follow-up and then return to the queue. We anticipate that today's call will last approximately one hour. As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investors section of our website at www.xyleminc.com. A replay of today's call will be available until midnight, March 7. Please note the replay number is, 800-585-8367 and the confirmation code is 41770453. Additionally, the call will be available for playback via the Investors section of our website under the heading Presentations. Please turn to slide 2. We will make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to risks and uncertainties, such as those factors described in Xylem's most recent Annual Report on Form 10-K and in subsequent reports filed with the SEC. Please note that the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances, and actual events or results could differ materially from those anticipated. With that said, please turn to slide 3 for a few key notes regarding today's presentation. First, I'd like to highlight that we have provided you with a summary of some of our key performance metrics we reported earlier this morning in our release. This includes both GAAP and non-GAAP metrics. For purposes of today's call, all references will be on an adjusted basis unless otherwise indicated and non-GAAP financials have been reconciled for you and are included in the Appendix section of the presentation. Additionally, please note that references to 2016 metrics include the financial impact attributable to previously closed acquisitions, and have been adjusted to exclude non-recurring transaction and acquisition-related costs. Now, please turn to slide 4. I'll turn the call over to our CEO, Patrick Decker.

Thanks, Phil, and good morning, everyone. We appreciate you joining us to discuss our fourth quarter and full-year performance. 2016 was a transformative year for Xylem, as we delivered strong financial results. We made significant progress on each of our five strategic priorities, delivering organic growth at a very challenging and mix market, at the same time, we accelerated capital deployment to change the mix of our portfolio, and in-market exposure, in order to grow faster, and deliver greater value to our shareholders. Specifically, we deployed nearly $2 billion last year for acquisitions that collectively are reshaping the growth and profitability profile of Xylem. The additions of Sensus and the Visenti immediately expanded our portfolio of systems intelligence offerings, a key plank of our strategic agenda, and extended Xylem into higher growth sectors, such as, smart metrology. And as the data scientists from Visenti and Sensus are now collaborating with Xylem's commercial teams, who bring deep customer knowledge and insights from a wide variety of water sectors, a host of possibilities are opening up to develop value-add solutions that address our customers' pain points. In addition to our inorganic expansion, we made excellent progress on our ongoing productivity initiatives to improve operational efficiency, and reduce our cost structure. These efforts deliver more than $130 million in cost savings, surpassing our full-year goal, and underpinning 130 basis points of operating margin expansion. Importantly, with these changes we are better positioned to deliver increased growth and profitability over time. Throughout the year, our team stayed focused and delivered against our long-term objectives. I'm pleased with what we accomplished, but even more excited about what the future holds as we continue to extend our reach and leadership in the global water industry. Now, let's turn to our results. Looking at the top one,…

Thanks, Patrick. Since you've already covered the highlights of the full-year results included on slide 5, let's turn to slide 6, where I'll discuss our fourth quarter results. Overall, revenues were up 10% in the quarter. Acquisitions contributed 14% growth, which was partially offset by an organic revenue decline of 2%. Additionally, foreign exchange headwinds reduced the top line by 2%. From an organic perspective, commercial was the only vertical market to generate growth this quarter up 1%. The public utility market was flat versus the prior-year period after growing 12% over the last three quarters. This deceleration primarily reflects a tougher prior-year comparison in the U.S., as well as weaker than expected revenue in certain European countries. Industrial markets were down 3% overall with steeper than expected declines in our light industrial business. Rounding out our performance, revenues declined 3% in both the residential and agricultural end markets. Regionally, the U.S. market drove most of the organic decline for the quarter, down 7% and Western Europe was down a modest 1%. And, as Patrick mentioned, our emerging market revenue was a bright spot, rebounding from a tough third quarter with 6% overall growth. Before moving to our margin results, I'll address the Sensus revenue performance in the quarter. Revenue for November and December was $132 million and was short of our expectations, primarily driven by a delay in the shipment of scheduled orders to a customer in Saudi Arabia, due to letters of credit not being released. In January, we have begun shipping these orders as letters of credit are now being processed. Despite weaker than expected revenue in the quarter, our teams did an exceptional job driving productivity, led to 60 basis points of margin expansion to 15.3%. Excluding 160 basis points of dilution from acquisitions, which is…

Thanks, Mark. As I've said earlier, we're well-positioned heading into 2017 to continue to make significant progress on our long-term financial targets. Transformative changes we made at Xylem over this past year have shifted our portfolio towards advanced technologies and repositioned our future growth and earnings profile. As we move through 2017, we expect our 2016 acquisitions to help accelerate our revenue growth. On a pro forma basis, we anticipate organic growth of 2% to 4%. This includes organic growth from the base Xylem businesses of 1% to 3%, and Sensus organic growth of 6% to 7%. We expect generally stable conditions across the majority of our portfolio, albeit mixed geographically. I'll cover our end market outlook for 2017 in a few minutes. As we drive our continuous improvement work deeper into the organization, we expect our lean and global procurement initiatives to generate incremental gross savings of approximately $80 million. Our adjusted operating margin is expected to grow in the range of 20 basis points to 60 basis points, excluding roughly 60 basis points of margin dilution from acquisitions. This dilution is largely driven by purchase price accounting impacts, relating to non-cash intangible amortization. We anticipate generating earnings per share of $2.20 to $2.35, which excludes integration, restructuring and realignment cost of about $30 million. This projection also includes $0.08 of negative foreign currency translation impact. Excluding foreign exchange impact, EPS growth is expected to be in the range of 12% to 20%. Finally, the Sensus acquisition adds a tremendous cash generating business to our portfolio. As we maintain our disciplined approach to capital deployment and continue to improve our working capital, I expect us to deliver free cash flow conversion of at least 110% this year. This also contemplates expected capital expenditures in the range of $190 million…

This slide provides the bridge from our full-year 2016 results to our 2017 annual guidance for revenue and EPS using the midpoint of our guidance range. From our $3.8 billion revenue base, we're adding 2% of organic growth from the base Xylem business. Sensus adds approximately 21% of incremental revenue growth, bringing total expected revenues to approximately $4.6 billion or 23% year-over-year growth. Foreign exchange headwinds of 2% reduce our 2017 full-year revenue guidance to a midpoint of approximately $4.5 billion. In terms of EPS, we expect our core business to add $0.13, which reflects organic revenue growth, carryover restructuring savings and the benefits of our productivity programs partially offset by inflation, investments and a weaker mix of revenue. Sensus is expected to add an incremental $0.20 of EPS. Note that we now expect the Sensus contribution be higher than our previous guidance range of $0.10 to $0.12. This results in operational EPS performance of $2.36, up 16% year-over-year on a currency neutral basis. Based on our full-year foreign currency assumptions, which are summarized on slide 14, we expect $0.08 of currency headwinds to reduce our overall 2017 EPS guidance midpoint to $2.28 per share. Please turn to slide 13. This slide reflects our 2017 outlook for our Sensus business. This year, we expect Sensus to deliver pro forma organic revenue growth of 6% to 7% versus 10% growth in 2016. Last year, the business had a very strong year in growing both the water and electric utility sectors, significantly benefiting from a number of new product launches. This year, we expect revenue growth to be driven by mid-single-digit growth in water, a double-digit increase in the electric utility sector and another year of double-digit growth in Software-as-a-Service. We expect revenue in the gas utility sector to be flattish. EBITDA…

Thanks, Mark. So overall, I'm pleased with our team's strong execution in a still-challenging global market. Looking ahead, we expect our acquired businesses to be catalysts for accelerating our revenue, profitability and earnings growth. That, coupled with our ongoing commitment to continuous improvement and business simplification efforts, positions us well for outperformance in 2017. Now, operator, we can open it up to questions.

Our first question is coming from the line of Deane Dray with RBC.

Good morning, Deane.

Deane?

Operator, we can't hear the question.

Mr. Dray, go ahead.

So can you hear me now?

Hey, good morning.

Yeah. Hey, good morning, Deane.

Can you hear me now?

Yeah, we can.

Okay. Sorry about that. Hey, I hope, we could start with the tone of the U.S. municipal market by geography and start with the U.S., so obviously tough comps, but do you still feel we're in a multi-year spending cycle by the utilities that started last year, and what's your visibility there? And then, related is this all the intrigue about where and how the Trump infrastructure spending may find its way into the water infrastructure markets. I saw this week, a preliminary listing of States' wish list of shovel-ready projects and about 10% of them were specifically geared towards water treatment plants. So, let's just start on the U.S. side, spending cycle, visibility and maybe some comments about, Trump?

Sure. Absolutely. Thanks, Deane. So, yeah, talking first on U.S. water utility sector. So we do very much believe that we continue to be in the midst of a multi-year kind of bull run there, Deane, and I think the – what you're seeing here in terms of the softness in Q4 was really driven by Europe, not so much the U.S. Our guide in Q1 really is being driven by the tough comp we have versus the first quarter last year where we had exceptionally strong growth we had, that was really driven by, as you'll recall an unseasonably warm weather in Q1, so we had a lot of pull-ins from Q2 to Q1, so that's just strictly a tough comp that we're seeing in the U.S. piece. In terms of visibility that we've got as we alluded to in our comments, the bidding, the big pipeline funnel continues to grow double-digits in the treatment business, which is the leading indicator for the health of the water utility sector. And so, again, my confidence is very strong there that we will see strength over the course of this year, as well as future years. In terms of the Trump policies, I would say, let me take the opportunity to maybe touch on a few different policy agenda items that are out there, leading first with infrastructure spend. We certainly believe that it could be a significant catalyst in terms of spending in the water sector. Obviously, questions remain on timing, and as well as the funding. We also think that there has been a little bit of uncertainty in terms of projects that are already shovel-ready as to whether the funding was going to happen at a local level, at a state level or federal level, and that's led…

Terrific. And then, I hopefully still won't count that as one of my questions. Just to round out the side on the European municipal market, sounds like there were pockets of weakness, but it wasn't in the UK, were these election related at all?

Yeah, the UK was up high-single-digits in the quarter, and we would expect them to continue to grow at similar rates here in 2017 as we are really hitting the sweet spot of the AMP Cycle in the UK. The softness there in the quarter, and what we're seeing in Q1, is really some slowdown in – we normally see a stand out of muni budgets there in a couple of key markets that we didn't see in the fourth quarter, and we're simply being cautious about that in Q1. And to your point, Deane, everything we seen in here does lead us to believe that it's specifically related to France and Spain, and that's certainly is related to some uncertainty around the upcoming elections, but we did that temporary.

Yeah. Just last question from me. I'd be remised if I didn't call out the free cash flow conversion, and it wasn't too long ago when, Xylem had set cash conversion as a priority, and you were in and around 90%, and so if we can get to 100%, or you've blown past that. So Mark, just give us a sense on sustainability, you've set 110% conversion goal for this year, what have been the kind of key changes within working capital, and also the Sensus contribution?

Yeah. Sure, Deane. And it's really a combination of a couple of factors, and you hit on both of them. First being, working capital, we have made continued progress in the base Xylem business, and saw improvement year-over-year in terms of working capital as a percentage of sales of 70 basis points, particularly in the areas of days payable, which improved by almost 6 days, continued progress in our receivables, which were up over 2 days. We lost a little bit of ground in inventories, and that was largely a function of the slowdown in sales in the fourth quarter, but really good progress, and we expect to continue to push that in 2017. And then, the other point that you alluded to is, Sensus, and they have a very efficient model, their working capital as a percentage of sales is around 10%. And they generate a lot of cash, and that is just a structural and sustainable change in terms of the amount of cash conversion that they'll deliver as part of the combined company.

Yeah. Great job on cash, and we I like that dividend increase. Thank you.

Thanks, Deane.

Our next question is from John Walsh with Vertical Research.

Hi. Good morning.

Good morning, John.

Good morning, John.

So, hey thanks. So thinking about the $0.20 now for Sensus, do you have any guidance on how that phases in either quarterly or each one versus each two?

It's pretty stable. We might see a modest tick up as we execute the net cost synergies, but it's relatively stable as – I think, we've pointed out on one of the slides, what the revenue profile looks like from quarter-to-quarter. So we wouldn't expect too much variability there.

Okay. And then thinking about your industrial framework for 2017, and kind of maybe parsing out some of the lighter commercial versus the heavy industrial. We are hearing about kind of an acceleration in those markets, and just wondering if, maybe the reason for your outlook is that, you might be tied a little more towards CapEx than maybe MRO spending in that vertical, but any thoughts on how that business kind of typically recovers when we start to see improved industrial activity, is it a two-quarter lag. How do you guys kind of think about that?

Yeah, this is Patrick. So I would split it into really two pieces of the industrial sector. In the light industrial sector that actually is more of a replacement business for us, and so we tend to be selling more into OpEx budgets. And so historically, that business has grown in kind of the low-single-digits kind of tied to GDP. That's why we were caught off guard a bit in the fourth quarter with unexpected some slowdown there in the U.S., and we do expect that to recover, but I think we're trying to be – we're trying to be modest and conservative certainly here in the first half of the year as to expectations. So we're obviously curious to see how Q1 and Q2 play out here, and we would expect some normal recovery there. The other piece of the industrial exposure for us, albeit less, is clearly in the energy sector, more the heavy industrial piece, we're less exposed there. But the reason you hear us calling that out is simply because of the fact that it impacts our dewatering business for the most part, which is a high-margin business. It's hard for us to gauge whether we're being conservative on our guide here, but we've seen this softness now for a number of quarters, and we simply think it's prudent to continue to build that into our outlook at least for the first half of the year. So we're hopeful as others are that there will be a market recovery over the course of the year, but we're certainly not banking on that in our guidance range.

Great. Thanks for taking my questions.

Sure.

Thank you.

Our next question comes from Nathan Jones with Stifel. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Good morning, everyone.

Good morning, Nathan.

Good morning, Nathan.

Good morning, Nate. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Patrick, I'm hoping you could help us bridge the gap between the down 1% to 2% first quarter, and up 2% at the midpoint for the full year.

Sure. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Given that, orders have been roughly flat here, down in the fourth quarter, how does that pick-up come along, I see you've got easier comps as the year goes along, but we haven't seen slowing organic growth as we've gone through the years.

Sure. Nathan Jones - Stifel, Nicolaus & Co., Inc.: If you can help us bridge from 1Q to the full year?

Yeah, no problem at all, Nathan. So first, I would say, just to restate some of the things we've said here. First quarter really is driven predominantly by a tough comp versus last year, because again, we had unseasonably warm weather, we had a really strong Q1 last year as you recall, and so that's being predominantly driven by a tough comp there, as well as the impact in Q1 of the slowdown in orders that we saw in Q2 and Q3 of last year, which are now working – that's working its way through our funnel, and that will work its way out in the first half of this year. But then, we did actually see an uptick in infrastructure orders, for both Q3 and Q4. Now, some of those have some longer lead times, which by definition, would ship out in the second half of the year, in early 2018, but we expect to see the benefits of that uptick in orders that we talked about here in the fourth quarter for Water Infrastructure, up 3%. And then, I would say, we also, as you point out, we do have an easier comp in the second half year-over-year because of some of the slowdown in organic growth that we saw in Q3 and Q4. In terms of how it splits quarter-by-quarter, think of roughly as down 1% to 2% in Q1, basically flat, flattish in Q2, up 1% to 2% in Q3, and up a little bit more than that in Q4, as I'm talking about the base legacy Xylem business, that excludes the impact, of course, of Sensus. Nathan Jones - Stifel, Nicolaus & Co., Inc.: Yeah. And then, I'd like to follow-up a bit more on the heavy industrial side here. The rig count bottomed in, in the middle of the last year, we've seen that improve, there's a lot of folks out there talking about seeing improvement in the mining industry. Is there some problem with channel inventory or do you lag recovery more than, maybe, I guess, I was thinking, in that business? I'm a little – just a little bit surprised that you're not seeing or forecasting better revenue growth in those two parts of the business.

Sure, yeah. So we do have – we do lag, to a small extent, recoveries in rig counts, and that typically, from our experience, would be at least a couple of quarter lag that we would see there, and that's just the nature of our customer base, and to some extent our indirect channel in terms of nervousness they would have around opening up the covers in terms of buying more rental fleet, et cetera. Part of it's also with some overhang in terms of them having adequate rental fleet to meet their demand as we sit here today. But, that's certainly – that pressure will certainly return to them as the market recovers. And we are seeing – we are seeing pockets of uptick in activity, and we're encouraged by that. But, we just again, right now, think it's prudent for us to not be building in and assumed recovery in that business until we have a quarter or two of actually having seen it in our results. Nathan Jones - Stifel, Nicolaus & Co., Inc.: And if I could just slip one more in on the public utility segment, you guys have clearly been outperforming the market there, so you're clearly been gaining share. Can you talk about the two or three main areas or main things that you think is driving those share gains and how sustainable they are?

Sure. Yeah, I mean we're – we're obviously, we don't take it for granted, so we're always looking over our shoulders, so we're always paranoid obviously around how do we stay ahead of the market in these areas, but I would say, first of all, we've got arguably one of the strongest channels to market in the U.S. both in terms of geographical coverage, but also the strength of our channel partners there, as well as our direct sales team. And I think about the service component that we're able to offer relative to some of our competitors' offerings, clearly when you've got a rising tide of an end market like we have in public utility, whoever has a lead market share position is typically going to grow disproportionate to the rest of the market, we're certainly benefiting from that. But I would say, at the end of the day, it really comes down to the quality of our product offerings, coupled with the service, and so we've had some recent product launches, our new Concertor launch, which is being extremely well received by the marketplace, as well as some of the additional service offering that we built around that. And I would say lastly, although it's always hard to hang your hat on this, but we've put a lot of effort in our sales team, in leveraging our Salesforce.com investment, which has really helped in terms of lead generation, and substantially increasing our funnel and pipeline of bidding opportunities. So there's a number of things, Nathan, that go into this, I wouldn't point to any one or two things, but those would be the top three or four. Nathan Jones - Stifel, Nicolaus & Co., Inc.: That's helpful color. Thanks very much.

Okay. Thank you.

Thanks, Nathan.

Your next question comes from the line of Joe Giordano with Cowen. Joseph Giordano - Cowen & Co. LLC: Hey guys, how are you doing?

Hey, Joe. Good morning. Joseph Giordano - Cowen & Co. LLC: So starting with Sensus, so I know your initial accretion guide was very preliminary, but what kind of changed the big bucket, that changed you get from $0.10 to $0.12, to $0.20 and can you talk a little bit more about the clean water applications that Sensus can pull core Xylem into, I think people kind of understand core business pulling Sensus in, but can you talk about other side of that a little bit?

Yeah, Joe. This is Mark, let me touch on the Sensus accretion question. Primarily two areas, one as we lock down on our valuation and purchase accounting, the amount of amortization related to intangible assets was not as high as we originally expected. So that's about $0.06, and we also did a better job in terms of how we went out and financed the transaction, that was a couple of cents. And they're continuing to perform strongly and have a lot of momentum. So those are the primary reasons.

Yeah, Joe. And on the synergies from a revenue standpoint, I would step back first of all and re-summarize where we think the big ticket areas of opportunities are, I mean, first there is a funnel of a number of large multi-year contracts that Sensus was already pursuing before this partnership with utilities that we already have a good relationship with, that we can help there from a Xylem perspective or that on a combined basis now, the strength of our offering will help us succeed in some of those bids. Secondly, it's in the area of the wastewater side, where we're able to leverage their metrology in terms of their FlexNet system as well as their data analytics and data science capabilities to provide offerings to a number of customers that we already have in common in the water utility space, but also to be able to go after new customers with a test and improvement offer. Now, there's lead times involved in doing the engineering and technical work around that, so that's why we don't expect to see meaningful revenue synergies in 2017. And we don't have any of that baked into our guidance, although we're certainly going to drive like hell to deliver some, the bottom line is, we don't have that in our guidance. And then the third area is, to your point, when we look at the opportunities to now leverage Sensus' capabilities in the clean water network side, we get other parts of our Applied Water business as well as our dewatering and outdoor analytic space, where we believe, we're going to be able to leverage their data analytics and data science and Software-as-a-Service capability to be able to connect our own devices, whether it'd be in the industrial space, whether it'd be in commercial buildings. But again, those are longer lead times, we'll have a lot more to say about the nature of those opportunities and the size, in Investor Day in April. And then lastly, we haven't even talked about Visenti yet, and we'll hold that until Investor Day, because I think, people will get very excited about what capabilities they bring to the party here as well. Joseph Giordano - Cowen & Co. LLC: Okay. So, that's great color, and fair to say that the Sensus accretion, almost none of that is from a change in the operational expectations, it's all kind of accounting related, so that's good to see. As you guys have spent this much money and clearly your focus is on these kind of higher technology type aspects, when I look at your total portfolio and you sit back, are there areas now that maybe don't need to be part of Xylem, that you're not – that you don't see spending incremental dollars on that maybe you can look to divest?

Yeah. I certainly, on the divestiture front, I wouldn't ever rule out anything long-term, but I'd say today, as we sit here, I wouldn't expect anything of significant size and scale. Looking at our portfolio and just doing good disciplined portfolio management, whether it'd be where we allocate capital, but also which ones we're wanting to (58:48) be a part of, it's something we look at on a regular basis, and again, if there was anything there of meaning, we would certainly share that at Investor Day, but we don't envision anything of significant size and scale as we sit here today. Joseph Giordano - Cowen & Co. LLC: Okay. Thanks, guys.

Okay. Thank you.

Thanks, Joe.

Your next question is from Nish Damodara with Robert Baird.

Hey, Nish. Mike P. Halloran - Robert W. Baird & Co., Inc.: Hey, guys. Can you hear me?

Good morning.

Good morning.

Yeah, we can. Mike P. Halloran - Robert W. Baird & Co., Inc.: Hey, guys. This is Mike Halloran, sorry about that. Must have our lines mixed up.

Hi, Mike. Mike P. Halloran - Robert W. Baird & Co., Inc.: Yeah. So first question, the share count creep here, is this just a reflection of a focus on debt pay down and less of a focus on buying back stock, or is there something else going on?

No. You nailed it. Mike P. Halloran - Robert W. Baird & Co., Inc.: All right. And then...

It's – we're really focused on getting our debt down to where we need to get it. Mike P. Halloran - Robert W. Baird & Co., Inc.: So second question then, and I'll keep mine to two. When you look backwards at the last time we had an infrastructure bill go through, as I remember it correctly, there were delays going into the bills, people decided to wait and see what kind of funding they could get externally...

Yeah. Mike P. Halloran - Robert W. Baird & Co., Inc.: ...as opposed to funding things with their current stream, how do you think that dynamic plays out this time? Are you seeing any signs of project softness or anything that would reflect a similar dynamic to the last cycle?

Mike, I'm in your camp on this based on the very reasons that you laid out. We've not seen it widespread, but we have seen it in pockets where there are projects that are in the hopper that we have seen some slowness in, in terms of – and we believe it is because of people looking to see well, does it need to be funded locally within our own budgets, or is there going to be state or federal funding that comes forward. What's encouraging about that is the fact that, we are seeing, and you're probably seeing and hearing from other E&Cs in the space that they're seeing upticks in their quoting activity, and so the work is absolutely out there, and we do believe that we've hit a little bit of a softness here for a couple of quarters, and the question is, when do those things come forward. And so, that's certainly my perspective, now. Phil's been around here for a long-time, and he can certainly give his perspective specifically on what we've seen historically within the Xylem businesses.

Mike, I was just going to – I was just kind of thinking back to that year. And the only thing I'd highlight is, back then, that was – that created a bit of uncertainty that the market really wasn't ready for, and how to think about it going forward. So that probably went on for a few quarters before it started to shake lose. I think, this time around, yeah – certainly, there's a little bit of air pocket here, but not likely the last beyond kind of the first quarter or two, here in 2017. So, I mean, obviously, we're watching it pretty closely. But that's a general feel by our teams, and they're obviously really close to their customers, because we predominantly go direct. So feeling a little bit more confident about the length of which that air pocket might last this time around. Mike P. Halloran - Robert W. Baird & Co., Inc.: Great. Thanks guys.

You bet.

Thanks, Mike.

Our next question comes from the line of Ryan Cassil with Seaport Global Securities.

Hey. Good morning. This is Jacob on for Ryan.

Good morning.

Good morning.

Good morning.

Good morning. In commercial, where is the strength that you guys are seeing coming from? Is it more so institutional and government buildings or is it coming from elsewhere?

Yeah. It's predominantly coming from institutional areas. So, again, we kind of throw that in terms of hospitals, universities, kind of government spend in that space. And so, that's the first piece, as it relates to the U.S. I would say, the other piece that we're seeing, a pretty strong rebound at this point in time, is within a few of the emerging markets, most notably China bouncing back. China had been on its back year in terms of our commercial building exposure through 2016, and we really saw that turn in the fourth quarter, and we expect that to continue through 2017, and we're seeing a tremendous growth in India from the whole Smart Cities focus as well.

All right. And then, in India, I know, you guys got a couple of few larger orders back in early 2016. Did you see any follow-on activity coming through in regards to larger orders for India?

Yeah, I'd say two things. One, we do see a very rich pipeline and funnel there right now and are actively bidding on projects of similar size. And so, hopefully we'll bag some of that this year. That would not help this year, that would be a 2018 kind of benefit, but we've got very good line of sight to our outlook for 2017, given these are large projects. I would say that, with the focus of Prime Minister Modi on both Infrastructure and Smart Cities, we see that run continuing for quite some time. Having said that, what we're also doing right now, especially as we have ramped up our manufacturing capabilities there as well as our R&D and Technical Center, we're trying to help our teams there, focus is much on building the day-to-day recurring base there and all the aftermarket service that comes with it to make sure that once we get through the next few years of large projects, that we got a really established, a really attractive and established base business there that recurs.

All right. Thank you guys for answering my question.

Sure. Thank you.

Our final question comes from Robert Barry with Susquehanna.

Hey guys, good morning.

Hey, good morning.

Good morning.

I just wanted to actually clarify the answer to an earlier question about the revenue growth progressing. I think, you indicated, was down low-single in the first quarter, kind of flattish and up low-single in the third quarter, I think, kind of implies flattish through the first nine months, so – which I think implies (01:05:00).

Yeah to clarify...

Yeah.

Yeah to clarify, Robert, so really what it is, it's...

(01:05:05) back-end weighted.

Yeah. So let me, kind of walk you through it again. So it would be down 1% to 2% in Q1, and it'd flattish to up low-single-digits in Q2. And then, it would be up somewhere in the low-single-digit kind of 2% to 4% in Q3 and Q4.

In each of Q3 and Q4?

That's correct, and that's really being driven by easier compares, and the uptick in orders here the last couple of quarter is infrastructure.

Got you, okay. And then, what's your visibility and confidence that we get there? I know, a lot of the business is pretty short cycle?

Yeah. I'm quite confident on our ability to get there. I think, obviously, we have visibility to Q1, I think, we got a good visibility to Q2, given the project mix that we've got, and what has been happening in backlog, and we'll begin to benefit, to some extent, from the order uptick and Water Infrastructure in Q3 and Q4. And then, as you look at Q3 and Q4 of 2017, a combination of easier compares as well as just an overall kind of history around the dewatering business and kind of some of the opportunities we see there as we lack those type of compares. So we're – we think there's quite high confidence in our ability to get to these numbers for full year.

Got you. And maybe just finally a question on the investment spending in the lock, is investment spending on a year-over-year basis? Is that a headwind or a tailwind? And what's the thought on kind of flexing that is needed to kind of keep margin go up on track, I see, that's been kind of the approach in the past? Thank you.

Sure. Yeah, Rob, but I'll take that one. So yeah, we've got very good line of sight to the planned strategic investments, and as we've done over the course of last few years that I've been here, I mean, we will throttle those as responsibly as we need to be depending upon where the top line is coming in. And so, we've got good line of sight and discipline around that. At the same time, I would say, there's still a lot of self-help margin expansion opportunity here. And so, we do think there is tremendous opportunities on both the – both productivity from procurement as well as Lean Six Sigma, as well as trying to overdrive the cost synergies associated with the Sensus partnership here together. So I mean, the combination of margin expansion opportunities just by good old fashion operating discipline that we're continuing to drive, coupled with line of sight to throttle our investments appropriately, gives us confidence that we will – we'll deliver on this margin expansion.

Great. Thank you.

Okay. Thank you.

I will now turn the floor back over to Patrick Decker for any additional or closing remarks.

Sure. So again, I mean, thanks everybody for joining, thanks for your continued interest and commitment. Safe travels in the meantime, but between now and then, we would remind you, we've got an exciting Investor Day coming up here on April 4th in just beginning of Q2. So it will be April 4th, it's going to be located at our Sensus location, just outside of Raleigh-Durham, North Carolina. It's about five miles from the Raleigh-Durham Airport. And you'll be welcome to join both presentations as well as a tour of our Innovation Center and the Sensus headquarter there. So, in the meantime, safe travels and we'll see you soon. Thanks.

Thank you. This does conclude today's Xylem fourth quarter 2016 earnings conference call. Please disconnect your lines at this time and have a wonderful day.