Jennifer Pasquino - Builders FirstSource, Inc. Floyd F. Sherman - Builders FirstSource, Inc. M. Chad Crow - Builders FirstSource, Inc.

John Baugh - Stifel, Nicolaus & Co., Inc. Rob G. Hansen - Deutsche Bank Securities, Inc. Nicholas Andrew Coppola - Thompson Research Group LLC Will Randow - Citigroup Global Markets, Inc. (Broker) Trey H. Grooms - Stephens, Inc. Al Kaschalk - Wedbush Securities, Inc. Keith Hughes - SunTrust Robinson Humphrey, Inc.

Good day and welcome to the Builders FirstSource Third Quarter 2016 Earnings Conference Call. Today's call is being recorded and will be archived at www.bldr.com. It is now my pleasure to introduce Ms. Jennifer Pasquino, Senior Vice President of Investor Relations. Please go ahead. Jennifer Pasquino - Builders FirstSource, Inc.: Thank you. Good morning and welcome to the Builders FirstSource third quarter 2016 earnings conference call. Joining me today on the call is Floyd Sherman, Chief Executive Officer of Builders FirstSource; and Chad Crow, President and Chief Operating Officer (sic) [Chief Financial Officer]. A copy of the slide presentation referenced on this call is available on the Investor Relations sections of the Builders FirstSource website at www.bldr.com. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. Any reproduction of this call, in whole or in part, is not permitted without prior written authorization of Builders FirstSource. And as a reminder, this conference call is being recorded today, November 4, 2016. Builders FirstSource issued a press release after the market closed yesterday. If you don't have a copy, you can find it on our website at bldr.com. Before we begin, I'd like to remind you that during the course of this conference call, we may make statements concerning the company's future prospects, financial results, business strategies and industry trends. Such statements are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties, which could cause actual results to differ materially from expectations. Please refer to our most recent 10-K filed with the SEC and other reports for more information on those risks. The company undertakes no obligation to publicly update or revise any forward-looking statements. The acquisition of ProBuild closed on July 31, 2015, as a result, ProBuild's financial results are only included in the company's GAAP financial statements from the closing date forward and are not reflected in the company's historical financial statements. We have, therefore, provided supplemental financial information of the combined company in this press release that is pro forma or adjusted to include ProBuild's financial results for the relevant periods prior to the closing date. The company will discuss these pro forma and adjusted results on the call. We have provided reconciliations of non-GAAP financial measures to their GAAP equivalents in our earnings press release and detailed explanations of non-GAAP financial measures in our Form 8-K filed yesterday, both of which are available on our website. At this time, it's my pleasure to turn the call over to Mr. Floyd Sherman. Floyd F. Sherman - Builders FirstSource, Inc.: Thank you and good morning. Welcome to our third quarter 2016 earnings call. Before I comment on the business, I'd like to provide an update on the integration and progress against our cost savings, then I will give a brief recap of the quarterly results and turn the call over to Chad, who'll discuss our financial results in more detail. And after my closing comments regarding our outlook, we'll take your questions. Let's begin our discussion on slide 5 with an overview of the progress we've made on the acquisition integration and synergy savings. The cost-savings opportunity we targeted of $100 million to $120 million are right on track. Synergies are being captured through network optimization, procurement and G&A cost. For fiscal 2016, we expect to realize approximately $70 million in savings in addition to the $10 million we realized in 2015. These 2016 projected savings include $10 million to $12 million in procurement initiatives where scale improves our purchasing leverage, $8 million to $9 million in network consolidation savings and $49 million to $52 million in overhead and SG&A savings, including benefit and 401(k) plans. We've realized $20 million in the third quarter. This is before one-time costs to achieve these synergies, which are estimated to be $30 million in 2016. We have successfully completed 77 conversions to Builders' proprietary ERP system to date with minimal disruptions or issues. Turning to slide 6, our value-added sales of manufactured products; windows, doors and millwork in the quarter increased 4% versus 2015 and 7% year-to-date over prior year. We believe our company is well positioned to help homebuilders mitigate the impact of well-publicized labor shortages and increased cycle times through our manufactured and value-added products across our national footprint. We will continue to focus on growing our value-added products faster than our overall sales. And before turning it over to Chad, I'll give you a brief recap of our results for the third quarter. Sales were $1.7 billion in the quarter. This is an increase of 3.1% in sales as compared to last year, excluding the impact of closed locations. We estimate that inflation benefited our sales by 2.6%. Sales in the quarter were impacted by continued construction labor constraints in many markets reflected in the U.S. Census as new residential construction start declines on a year-over-year basis. Excluding the impact of inflation and closed locations, our new residential volume sales grew by 1% in the quarter versus a 1.9% decline in starts as reported by the U.S. Census Bureau including growth in single-family starts of 2% and multifamily declines of 8.6%. Our repair and remodel sales grew 2.8% in the quarter versus prior year. Our integration efforts remain a major priority for the company and the EBITDA contribution from these cost savings initiatives was $20 million in the quarter. As a result, I believe the internal focus to deliver on all of the integration priorities may be impacting our ability to grow share, but believe that this is the right long-term strategy for our business. I'll now turn the call over to Chad who will review our financial results in more detail. M. Chad Crow - Builders FirstSource, Inc.: Thank you, Floyd. Good morning, everyone. I will first discuss the quarter results on slide 8. As a reminder, we have reflected pro forma adjusted figures to include ProBuild's financial results prior to the closing date as adjusted for one-time integration, closure and other costs. For the third quarter, we reported net sales of $1.7 billion, a 3.1% increase compared to pro forma sales for the third quarter of 2015, excluding the impact of closed locations. To be clear, when we speak of closed locations, we are not normalizing for acquisition-related overlapping market closures. We intend to retain those sales. These are closures in non-overlapping markets that are closed for other business reasons. Sales, excluding the impact of closed locations, grew 3.1% over pro forma sales for the third quarter of 2015, benefited by an estimated 2.6% from commodity price inflation. We estimate that our sales volume, excluding inflation and closed locations, grew 1% in the new residential building end market and increased 2.8% in the repair and remodel end market, offset by declines in commercial and other. Breaking down our third-quarter 2016 sales by key product categories, value-added products, including manufactured products, windows, doors and millwork, were $659 million, up 4% from 2015. Lumber and lumber sheet goods were $588 million, up 7.3% from 2015, aided by commodity inflation in the quarter. Our other categories were down collectively compared to last year on a pro forma basis as our gypsum, metal and concrete products were impacted by the decline in multifamily and commercial sales. From a product mix standpoint, our value-added product categories made up a higher percentage of our overall pro forma sales as our prefabricated components, windows, doors and millwork categories accounted for 37.8% of sales in the third quarter of 2016, a 40-basis-point improvement over quarter three last year and are up 70 basis points year-to-date. Our gross margin percentage was 25%, down approximately 90 basis points from 25.9% last year, but improved versus last quarter by 10 basis points. The decrease on a year-over-year basis was primarily due to a combination of commodity price deflation benefits in 2015 and commodity price inflation in 2016. Although commodity price inflation generally benefits the company's operating result in the long-term, it can cause short-term gross margin percentage compression when prices are rising and margin percentage expansion when prices are falling. This is due to the short-term pricing commitments we provide our customers versus the volatility in the commodity markets. Last year gross margins were benefited by approximately 65 basis points in the quarter as commodity prices were falling in the third quarter last year. Conversely, gross margins dragged in the third quarter of this year by approximately 40 basis points due to commodity inflation. Our SG&A as a percentage of sales, excluding depreciation, amortization, stock compensation and one-time acquisition and integration expenses, decreased by 80 basis points on a year-over-year basis. These cost improvements were primarily due to the $18 million of SG&A synergies realized in the quarter, partially offset by incremental commission costs incurred during the quarter related to our concerted effort to recruit new salespeople, who we generally offer a guaranteed commission minimum for initial period as they build their book of business. We also experienced unfavorable medical claims activity, that were reserved for in the current quarter. GAAP interest expense in the quarter of $92.3 million included $53.3 million of refinancing cost associated with the restructuring of our long-term debt. These refinancing costs include the call premium associated with retiring the company's 7.625% notes due 2021, cost associated with issuing $750 million of 5.625% notes due 2024, and re-pricing our previous senior secured term loan facility with a new $470 million senior secured term loan facility at an interest reduction of 1.25%. Absent these expenses, adjusted interest expense was $39 million in the third quarter of 2016, a $5.2 million reduction compared to the pro forma adjusted third quarter 2015, attributable to debt repayments and a series of transactions that have reduced the company's interest burden. The company recorded $131.5 million in income tax benefit in the three months ended September 30, 2016. This credit can be largely attributed to the release of a substantial portion of our valuation allowance against our deferred income tax assets in the quarter. This benefited our GAAP net income by $117.6 million in the third quarter. We've excluded this one-time benefit of releasing the tax valuation allowance from our adjusted net income. As a result of the company's substantial federal net operating loss carryforwards, we do not anticipate paying any federal income taxes in 2016 and only expect to pay $4 million to $6 million in state and other taxes. Adjusted net income was $69.2 million, or $0.61 per diluted share, compared to $34.8 million, or $0.31 per diluted share, in the third quarter of 2015 on a pro forma adjusted basis. This improvement was largely a result of the operating synergies realized, interest savings as a result of refinancing activities, and the reduction of step-up depreciation and amortization associated with the ProBuild acquisition. Adjusted EBITDA was $118.3 million, or 6.8% of sales, compared to $116 million, or 6.8%of sales, for the pro forma adjusted third quarter of 2015, driven largely by synergy cost savings initiatives totaling $20 million before one-time costs to implement, offset by $18 million of commodity driven gross profit margin compression on our lumber and lumber sheet goods category. We have provided an adjusted EBITDA reconciliation on slide 13. Turning to slide 9, the company has executed six capital market transactions this year to improve our financial flexibility, with a cumulative go forward annual interest savings of approximately $34 million. We are always evaluating opportunistic transactions to lower our interest expense or otherwise address our capital structure. In the third quarter, we issued $750 million of senior secured notes, providing an extended maturity to 2024, as well as an attractive 5.625% coupon. We used the proceeds from that offering to redeem all of our outstanding 7.625% notes due 2021 to repay $125 million of our borrowings under the previous term loan facility. Additionally, through an amendment to the company's term loan agreement, the new term loan facility provided an interest reduction of 1.25%. We have meaningfully extended the maturity of our debt portfolio to a weighted average of over seven years, transitioned a larger portion of our debt from variable to fixed rates and reduced our go forward interest expense. In October, we repurchased $50 million aggregate principal amount of our 10.75% senior notes due 2023. This transaction reduced the company's go forward interest by approximately $5 million to approximately $134 million annually. This transaction was funded by the company with a combination of cash generated from operations as well as short-term borrowings on the revolving credit facility. There are about six years until our first debt maturity; the company expects to make significant strides in de-levering the balance sheet between now and then. Adjusted pro forma EBITDA on a trailing 12-month basis was $373.2 million and net debt was $1.969 billion as of September 30, 2016. This implies a leverage multiple of 5.3 times net debt to adjusted EBITDA. The company reduced its net debt to adjusted EBITDA leverage ratio from 6.5 times one year ago. Turning to slide 10, we expect free cash flow generation will give us the opportunity to reduce debt over the next several years. Our business typically uses cash in the first half and generates cash in the second half of the year. Due to seasonal working capital needs, year-to-date cash used in operations and investing was $73.4 million, including $35.6 million of one-time call premiums and fees associated with retiring the company's 7.625% notes due 2021, which was included in cash used in operations. Excluding these refinancing costs, cash used in operations and investing was $37.8 million through September. Excluding these one-time financing costs, cash used from operations and investing was in line with our expectations and annual guidance of $75 million to $85 million in positive cash flow for the year. Total liquidity at September 30, 2016 was $632 million, consisting of net borrowing availability under the revolving credit facility and cash on hand. We expect to reduce debt over the next several years with cash generation. We believe this will be driven by EBITDA growth including projected annual cost savings realization of $100 million to $120 million by the end of 2017 and a focus on working capital efficiency which we believe will run between 9% and 10% of incremental sales. We expect to invest in our business through capital expenditures at approximately 1.5% of sales. We plan to utilize our substantial carryforward NOLs the shelter us from paying federal cash taxes through 2016 and most, if not all, of 2017. In 2016, we expect one-time integration cost of approximately $30 million. As a result, we expect to generate approximately $75 million to $85 million in cash flow for full-year 2016 including the one-time financing costs. This is consistent with previous guidance. As a result of the opportunistic capital market transactions executed this year, go forward cash interest should be reduced to $133 million in 2017; assuming the midpoint of expected synergy savings, this should benefit 2017 by an additional $30 million over 2016 with one-time cost expectations for 2017 to drop to $20 million. Once we have the synergies fully realized and one-time costs behind us, we expect the company's cash flow will significantly increase on a go forward basis. Should market conditions unexpectedly accelerate or decelerate, we have the ability to quickly adjust our capital spending and working capital accordingly to help mitigate the impact on our cash flow. As we're now 10 months into the year, I would like to provide some color on the fourth quarter of 2016, and how we are currently thinking about 2017. In the fourth quarter of this year, we will have two less selling days than Q4 of last year which could impact our growth by 2% to 3%, so I will refer to sales per day growth. From an end market growth perspective, we expect to see continued declines in the multifamily and commercial end markets. If single family starts grow with the 4% rate we have seen across the second and third quarters and on our growth is also a 4%, we would expect the blended average market growth to be 2.5% to 3% on the sales per day basis. On top of that, we could see a couple points of growth from commodity price inflation on a year-over-year basis. That's a long way of saying sales per day should be up about 5% for the quarter but actual sales dollars for the quarter would likely be up 2% to 3% since we are losing two ship days. From a gross margin perspective, we will continue to lap the benefits of commodity deflation last year versus commodity inflation this year, but on a sequential basis, we expect gross margin to increase by 10 basis points to 20 basis points versus the 25% we saw in the third quarter. Synergy savings are expected to contribute $22 million, but we're lapping $10 million of synergy realization from Q4 2015, so the incremental year-over-year benefit will be approximately $12 million. As you can see, a lot of the same dynamics are in place for Q4 that we saw in the third quarter, Gross margin comps will still be a challenge and we will begin to lap synergies, so I would expect Q4 EBITDA to be flat to up slightly versus Q4 EBITDA last year. Next year, our expectations for growth in single family starts are in the mid to high single-digit range, with multifamily and commercial down mid single-digits and R&R up 3% to 5%. Whether single family starts can grow at the high end of that range, will in our opinion depend on the severity of labor constraints. We do not anticipate much of a year-over-year impact from commodity prices on our sales. If all these assumptions were to play out, that would represent sales growth in the 5% range and we would hope to do a little better than that through share gains. The year-over-year commodity-driven gross margin compression should be largely behind us next year, allowing us to expand our gross margin and get back to a more normalized EBITDA conversion of 12% to 15%. EBITDA benefits from synergy cost savings are expected to contribute an additional $30 million over savings realized in 2016, getting us to the midpoint of our synergy cost savings target. Components of cash flow should be consistent with 2016 with the exception of lower interest from the re-financings we executed this year and reduced one-time integration expenses. I'll now turn the call back over to Floyd for his closing comments. Floyd F. Sherman - Builders FirstSource, Inc.: Thank you, Chad. Turning to our outlook, I remain positive about the future of our company. I believe the housing industry remains on a trajectory of steady growth although hampered in the short-term by construction labor availability. This can be seen in the declines in new residential housing starts reported by the Census Bureau for the third quarter in the busiest time of the building season. I'm not surprised that the labor-driven constraints were a governor to the growth in the single-family construction on a year-over-year basis. Oil-related markets continue to be a drag on our overall sales growth. And we believe the overall multifamily market will continue its decline in the balance of the year. To mitigate the impact to our top-line, we are focused on growth with national builders, who are capturing share as well as leveraging the significant growth we are seeing in other markets such as the Pacific Northwest, Colorado, Utah. Our company is well-positioned to be the building supply company of choice for builders around the country, thanks to our geographic reach, enhanced product offerings, national manufacturing capabilities and superior customer service. Our focus will be to leverage our national scale and scale the capability to grow faster than the market with a focus on profitable growth on value-added products. These strengths are a scale and a potential leverage provided by the synergy savings combine to make Builders FirstSource an industry leader with significant growth opportunities. I believe we will continue to create value for our shareholders. And I attribute the success we've achieved in both the integration efforts as well as the strong results we've posted since the ProBuild acquisition to all of our hard-working and dedicated associates. Thank you. And I'll now turn the call over to the operator for Q&A.

Thank you. We will take our first question from John Baugh of Stifel. Please go ahead. John Baugh - Stifel, Nicolaus & Co., Inc.: Chad, maybe you could start, just refresh my memory where will we be on a delta as cash interest expense 2017 versus 2016. M. Chad Crow - Builders FirstSource, Inc.: I think it will be probably $30 million or so. John Baugh - Stifel, Nicolaus & Co., Inc.: Great, thank you. And then a broader question, as it relates to the labor and the impact on construction activity, are you not only seeing the starts delayed because of that issue but in the elongation as well of a start to a finish and, therefore, delay of when you're selling product to the construction trade? Floyd F. Sherman - Builders FirstSource, Inc.: Yeah, I don't think there's any question about that, John. In our estimation, we think it's added somewhere between two-plus months to the cycle and with the labor delays and the labor issues that we're facing out there in the field. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And then the declines that you're seeing in commercial, could you maybe elaborate, and I don't think it was much of the legacy Builders FirstSource business, but maybe you could define that market a little bit more granularly on what you're seeing going on there? M. Chad Crow - Builders FirstSource, Inc.: Well, lot of the commercial we do is up in the Northeast and part of gypsum business, and that's why you're seeing that impact in that product category. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And then last question is just back to the lumber situation, so it would be our expectation, and I'm looking at 2017 not 2016, that if we assume lumber prices I guess at this level for the whole entire year, that that would be a favorable gross margin trend for you versus the headwind you'd see this year? And what would be the headwind if you could break it out on gross margin in basis points that you now expect for 2016 from lumber inflation? M. Chad Crow - Builders FirstSource, Inc.: Well I think the first part of your question was if lumber prices stay where they are today, yeah, it would be a slight positive for us, next year, and obviously shouldn't be much of a gross margin issue if prices are relatively flat. I think the second part of your question was full year 2016, what was the impact of commodity inflation on our gross margin, is that your question? John Baugh - Stifel, Nicolaus & Co., Inc.: Correct, and I guess you comparing to your prior where you had some deflation so there was both the impact negatively this year, but I'm really kind of trying to assess what that number was for the entire year on a year-over-year basis point degradation? M. Chad Crow - Builders FirstSource, Inc.: Well, for this year is probably a 30-basis-point drag. Last year, probably a full year benefit of, I'd say, 50 basis points to 60 basis points probably. John Baugh - Stifel, Nicolaus & Co., Inc.: Great, thank you. I'll divert it to others. Good luck. M. Chad Crow - Builders FirstSource, Inc.: Thanks. Floyd F. Sherman - Builders FirstSource, Inc.: Thanks, John.

We'll take our next question from Rob Hansen of Deutsche Bank. Please go ahead, sir. Rob G. Hansen - Deutsche Bank Securities, Inc.: Thanks. I just wanted to kind of revisit the system change over with ERP, are you on plan, are there any integration issues and is the kind of continued market share losses factored into that 4Q guidance? M. Chad Crow - Builders FirstSource, Inc.: I would say, yes, the conversions are on right on track. That's probably been the brightest spot, in my opinion of the whole integration, so far is how well that process has gone. I think by the end of the year, we will be up to somewhere around 90 locations converted, which is consistent with where we thought we would be. As we mentioned last quarter, and as Floyd mentioned just recently in his opening comments, yes, we are busy with integration and it's taking up a lot of time internally. So to some degree I would think that's got to be impacting our sales growth or our share gains. And so yeah, when I'm trying to forecast or give some guidance on Q4, I'm certainly basing that off of recent trends that we've seen in sales, which would include some degree of those integration efforts in that level of distraction. Rob G. Hansen - Deutsche Bank Securities, Inc.: Okay, great. And then what did you see in October here, I would assume that it's consistent with what you've reported in the guidance? M. Chad Crow - Builders FirstSource, Inc.: Yeah. Obviously, I took October into account and the sales in October were consistent with that guidance I just gave. Rob G. Hansen - Deutsche Bank Securities, Inc.: Got it. Okay. And then I... M. Chad Crow - Builders FirstSource, Inc.: We don't lose those extra days really until December. Rob G. Hansen - Deutsche Bank Securities, Inc.: Got it. M. Chad Crow - Builders FirstSource, Inc.: We haven't seen that. And the reason we're losing too, just so you know, one, is just because of the way the calendar fill, the other one is we have decided to move the New Year's holiday back into the end of this year just for various reasons, it's helping with our payroll conversion that we have going live at the beginning of the year. So typically you would never lose two days in a quarter, but this year we are, but one of those days it's specific to us. Rob G. Hansen - Deutsche Bank Securities, Inc.: Okay, that's helpful. I think you also mentioned hiring some salespeople. Is this in new regions or is it because maybe you lost some people? What's kind of driving this? Floyd F. Sherman - Builders FirstSource, Inc.: No, the salesmen adds are pretty much spread uniformly all through all of our regions. A little bit in the higher sales area, we definitely have added more people proportionately. But, no, a lot of it is due to the fact that we need more feet on the street, the – we need a lot of our sales people – our current salespeople are operating at pretty full capacity and we need to increase the amount of new customer adds and making sure that we're taking care of current customers as they expand their footprints and as they expand the number of subdivision offerings in the market and so forth. And so we just – we're trying to get ahead of it and we're trying to be more aggressive in the marketplace and it's an investment in our future and we found that this has really paid off for us in the past and a lot of this – I really attribute some of it to the diversion of our management time due to the integration of the companies. And when you're changing the number of things that we're changing for our operating people, when you start changing benefit plans, paid plans, commission plans, now also to get SOX compliant with segregation of duty, issues, you just get so much of your management time in the operations is spent addressing people questions and people issues, customer issues, related especially where you're doing computer conversions and changing people, and the way they're being invoiced and so forth. We really are focusing as much on the market development, market build and you've really got to stay a year ahead and we're making up for that ground. We're going to get ourselves back ahead of the game again. And the year 2017 for the most part, the integration issues will be behind us and I think the salesman add definitely fell short due to the fact that we were preoccupied with so many other issues. So that's the long and short of it. Rob G. Hansen - Deutsche Bank Securities, Inc.: Great. Well, I appreciate the commentary. Thanks guys. Jennifer Pasquino - Builders FirstSource, Inc.: Thanks, Rob.

We will take our next question from Nick Coppola of Thompson Research Group. Please go ahead. Nicholas Andrew Coppola - Thompson Research Group LLC: Hi, good morning. Floyd F. Sherman - Builders FirstSource, Inc.: Hey, Nick. Good morning. Nicholas Andrew Coppola - Thompson Research Group LLC: Wanted to ask about your view of the cycle here. I know you talked about mid to high single-digit growth in 2017 for single-family construction. I wanted to just get your thoughts about the – I guess more color on the recent slowdown here. And your thoughts going forward on the residential cycle. M. Chad Crow - Builders FirstSource, Inc.: In my opinion, I feel like the shortage of labor is a big issue right now. I think the demand for new homes is still very strong, I think during the second quarter and third quarter of this year, which, as Floyd mentioned earlier, during the busiest time of the year as far as the amount of building going on, it makes sense that you're going to hit kind of that labor availability ceiling during those busier quarters, and I really think that's what we were seeing reflected in the single-family starts. So we're still building more houses than we were a year ago from a single-family standpoint. And so, we solved some of the labor issue over the last year. I think, it will continue to get solved, but I still think over the coming years labor is going to act as a governor. I think, the demand is there to carry improved building conditions for several more years. But, I think, it's just going to be kind of at a muted growth rate because of the availability of labor. Floyd F. Sherman - Builders FirstSource, Inc.: Yeah. And I would agree with what Chad is saying and I would add one other aspect to it. It's not only the availability of labor, but it's also the cost element that's associated with that labor. The cost are inflating at a very, very concerning rate and for builders and especially for the large multifamily project developers, this is a real issue and in many cases, especially on multifamily, those projects have been laid out and bid almost a year before they're really started and their labor factor is factored in. And when all of a sudden before your project starts, you realize you may be underwater with the current rates of labor then you're going to pull back on it and you're going to delay the start even further. I think as we look to next year, single-family this year is going to be up about 8% over where it was last year. Multifamily is going to be down slightly, from where it was last year. I think this coming year in 2017, we're going to see that 9% – 8%, 9% again gain in single-family, but I think single-family is going to be held next year. I think multifamily is going to be a lot weaker next year. I think, you're going to see a labor substitution going from multifamily to become more available to the single-family builders. And I think, the labor costs are going to start getting a lot more under control. We've seen a lot more labor cost inflation on the multifamily side than we've seen in the single-family side. But I think, labor is beginning to realize that they may be putting themselves into jeopardy and business may start slowing down unless their cost become a little bit more controlled, then I think we're going to start seeing that. So I think next year single-family is going to be pretty healthy again. That's good for us because we certainly have a lot more concentration on the single-family side. I think, multifamily even though it's important to us and we do a pretty fair amount of business in that area, that's going to be a lot tighter, but I think we have a lot more room to expand our presence in multifamily, so I think we can mitigate some of the slowdown that we're going to see in multifamily. So all-in-all, that's – I think, we all feel next year we'll continue working on – trying to address the labor supply problems as we did this year. And all in all, I think, next year is going to mirror a lot of what we've seen this year. M. Chad Crow - Builders FirstSource, Inc.: Yeah, and I think that's a good point, and I mentioned earlier whether we grow at a mid-single-digit or high single-digit in single-family next year, it's going to be dependent on the availability of labor. And to Floyd's point, if we can see some of that labor move over from multifamily to single-family, then I think we got a shot at being on the high end of the range. If it stays tight like it's been in the last couple of quarters, then we may be at the low end of the range. So, we'll just have to wait and see how the labor issue resolves itself. Floyd F. Sherman - Builders FirstSource, Inc.: But I think, we're also seeing a trend taking place in housing that certainly we have to be – pay a lot of attention to and it definitely affects a lot of our value-add products. That is – what's really the momentum part of housing now is that first-time homebuyer and a first-time move-up buyer, in essence the homes that are $300,000 and less, the higher-priced homes are much more stagnant in growth. And I think, a lot of that is attributable to certainly some of the oil related issues in those areas, and as well as around the country with the slowness of – that our economy is recovering. And so the lower-priced home is less square footage, but you don't have near the number of upgrades in the home. You don't have the number of windows that go into a larger home. You don't have as much interior millwork and finish out. And so it puts a lot more pressure on our operations and to grow our sales in the window and door category, as well as other molding trends and so forth. So we are addressing that and we continue to work to improve our penetration into the lower-priced home area. And we've – but next year, I think, our growth in those product areas probably are going to look more like it's done this year. Nicholas Andrew Coppola - Thompson Research Group LLC: Okay. Floyd F. Sherman - Builders FirstSource, Inc.: Trusses and component is going to be very strong for us Nicholas Andrew Coppola - Thompson Research Group LLC: Got you. Got you. Well, appreciate hearing your view. That all makes a lot of sense. And then I guess kind of transitioning a bit second question here is about your cost savings initiatives for procurement particularly, it looks like you've got a savings estimate for 2016 of $10 million to $12 million. I wanted to get an update on where you are in terms of negotiations with vendors if that's complete and if it was in line with expectations? Floyd F. Sherman - Builders FirstSource, Inc.: We've pretty much finished. We've got one more larger category that's our millwork and trim category, but all the rest of the categories are finished and we're in a transition period when you transition to a new vendor, especially you bring in the change in product and so forth, it takes time because a lot of times we're committed for certain period of time with a line of products that may change, and so we don't get the immediate advantage of the price reduction that we've negotiated. It also involves when you get back-end rebates and so forth. But everything is progressing right as we had anticipated. I think, we're going to deliver the numbers that overall that we said. While we may come up a little bit short in one area, but then you make it up in another area, but right now certainly the procurement area looks really good to us. Nicholas Andrew Coppola - Thompson Research Group LLC: Okay. Thanks for taking my questions.

And we'll next hear from Will Randow of Citigroup. Please go ahead. Will Randow - Citigroup Global Markets, Inc. (Broker): Hey, good morning, guys, and thanks for taking my questions. Floyd F. Sherman - Builders FirstSource, Inc.: Hey, Will. Will Randow - Citigroup Global Markets, Inc. (Broker): Chad, your commentary on demand and kind of thinking about 2017 as well, I guess, there's two related questions there, number one, this spring was a little earlier than last and this summer was a little hotter than last, as you kind of think about next year, how should we be thinking about volume comparisons given that the first half is probably tougher comps and second half is probably easier comps? And then in terms of your outlook on lumber inflation, how are you guys thinking about the trade agreement given you probably more focused on it than I am? M. Chad Crow - Builders FirstSource, Inc.: I think, you're right, if you want to talk kind of quarterly comps next year, from a volume standpoint. As I sit here today, Q1 would likely be the toughest, because, as you mentioned, we had a really mild winter and the construction activity really exceeded everyone's expectations in the first quarter of this year. And then I think Q2, Q3, and we'll see how Q4 plays out should all be kind of right there in the same boat together. I don't know, Floyd, you're probably closer to the trade agreement than I am, any commentary on that? Floyd F. Sherman - Builders FirstSource, Inc.: On the lumber side? M. Chad Crow - Builders FirstSource, Inc.: On the softwood agreement. Floyd F. Sherman - Builders FirstSource, Inc.: Yeah. You know, it's still anticipated that there will be a trade agreement. I'm talking with some of our Canadian suppliers. They are I think looking for an agreement to be put into place sometime early to late spring. I think, in anticipation of that, I think what you're seeing now in the futures market is reflecting an increase in anticipated pricing certainly with the new trade agreement, they're anticipating that we will get a lift in pricing on the lumber products. Right now, lumber is softening. I think a lot of that had to do with the fact that a lot of inventory in the system that needs to get flushed out. People anticipated a lot stronger housing market, and especially multifamily market, than what occurred. And so some of that is just getting the inventories adjusted. But I think, next year, certainly first quarter next year, we're going to see a higher cost structure on our commodity products than what we have right now. And I think that's probably in terms 7% to 10%. And I think next year all-in that that's going to pretty much carry through the entire year. And I think probably on an overall average 10% to 15% on increasing commodity prices. Will Randow - Citigroup Global Markets, Inc. (Broker): Thanks for that. And as a follow-up, it's pretty apparent that the homecenters are trying to make a push into the small pro-contractor. Obviously, you guys are going to play with a bit bigger contractor so to speak. Have you seen any impact from that? Obviously, as volumes improve meaning more houses one guy does that plays towards your business model, but have you seen any sort of impact from the homecenters trying to move into your business model? Floyd F. Sherman - Builders FirstSource, Inc.: No, I've not really seen much of a change in that area. We've only been really associated with the ProBuild operations now for about a year and a half, and they did a lot more of the small contractor business than we did, especially through the Midwest and Far West. From what our people are saying is that that really has not become anymore noticeable. Probably Menards is more heavily involved in the small contractor business in the markets in which we operate in, and more so than Home Depot and Lowe's, even though Home Depot and Lowe's are in those markets as well. In the Menards area, surprising they – in many of the areas they pulled their sales force from the field and so that they brought them all back into the store, and we really see that that might actually help us and give us an advantage in some of the areas where we compete where our people are in the field calling on those contractors. But other than that, really haven't seen any appreciable change. Will Randow - Citigroup Global Markets, Inc. (Broker): Thanks for that, and congrats on the progress. Floyd F. Sherman - Builders FirstSource, Inc.: Thanks. Jennifer Pasquino - Builders FirstSource, Inc.: Thanks, Will.

We will next hear from Trey Grooms of Stephens, Inc. Please go ahead. Trey H. Grooms - Stephens, Inc.: Hey, good morning. M. Chad Crow - Builders FirstSource, Inc.: Good morning. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning, Trey. Trey H. Grooms - Stephens, Inc.: Chad, I guess this one's for you. With the synergy targets you've laid out for – you guys have been talking for a while, but you kind of reiterated, I guess, for next year the incremental synergies flowing through. How should we be thinking about the SG&A there? Is it still kind of that 65% variable? I know that's been the case in the past, is that how we should still kind of be thinking about that as we look into 2017?? M. Chad Crow - Builders FirstSource, Inc.: Yeah, on the base business, I think it was still be in that 65% to 70% range and then you can layer on the cost savings on top of that Trey H. Grooms - Stephens, Inc.: Okay. Got it. So the cost savings would be in addition. M. Chad Crow - Builders FirstSource, Inc.: Right. Trey H. Grooms - Stephens, Inc.: And just to be clear that does exclude – that fixed portion excludes or doesn't include D&A I should say, right? M. Chad Crow - Builders FirstSource, Inc.: Right. Jennifer Pasquino - Builders FirstSource, Inc.: And then just remember that that $30 million in incremental savings, some of it's going to be in COGS and some it's going to be in SG&A. Trey H. Grooms - Stephens, Inc.: And remind us of that split again, is it about kind of 60%, 30% somewhere there? Jennifer Pasquino - Builders FirstSource, Inc.: It's more like 75%. Trey H. Grooms - Stephens, Inc.: 40%, I should say. Jennifer Pasquino - Builders FirstSource, Inc.: Yeah, 75%-25%. Trey H. Grooms - Stephens, Inc.: Okay. And then I guess, just a housekeeping, and maybe I've missed this when you're kind of going through some of your thoughts on next year, Chad, but CapEx range for next year? M. Chad Crow - Builders FirstSource, Inc.: I think, it will still be in that 1.5%, like we've been running 1.5% of sales. Trey H. Grooms - Stephens, Inc.: Okay. That's it from me. Thanks a lot, and good luck, guys. M. Chad Crow - Builders FirstSource, Inc.: Thanks, Trey.

We will take our next question from Al Kaschalk of Wedbush Securities. Please go ahead. Al Kaschalk - Wedbush Securities, Inc.: Hi, guys. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning. M. Chad Crow - Builders FirstSource, Inc.: Good morning. Al Kaschalk - Wedbush Securities, Inc.: I have just a couple of – two follow-ups, really more clarifications. Floyd in your prepared remarks, or at least in the press release, you talked about competitive environment in certain regions increasing and I was hoping you could elaborate whether that'd be geographic or particular parts of the business? Floyd F. Sherman - Builders FirstSource, Inc.: The competitive environment is still very, very competitive throughout our area. In some of the areas, especially in the oil impacted areas, Southwest, Balkan area, Alaska, the competitive environment has increased. Due to the shrinkage of the market and you still have the same people in the market competing for that business and the – it's gotten a lot tougher, so not only are you battling a shrinking housing market, but you are battling a really increased competitive pricing situation. The rest of the markets, I would say, the – it is still the competitiveness is not a lot improved or changed from a year ago. And it's still very competitive, but nothing like we're experiencing in the oil related areas. I will also say in the commercial multi-family arena, especially in the Northeast, down into the mid-Atlantic, the competitive pressures there, especially as it relates to the gypsum operations, have really gotten intense. And again, a lot of that is the shrinkage in the market. As you know, especially in the New York City, the Metro New York area, a tremendous, almost a 50% fall off in multi-family and that was a dominant part of the housing in that market, and so for whatever the available work everybody's really, really fighting for and you know, margins have gotten a lot thinner, but that's – I hope that gives you some coverage that you're looking for to the point. Al Kaschalk - Wedbush Securities, Inc.: Yes, no that's great. What spurned the question on my end is if we took a step back and looked at the pro forma numbers, and I know there's a lot of moving parts here, but if we see the revenue growth, yet the EBITDA dollar actual contribution was small, and so I'm just – I'm trying to grasp onto is are you having to move product by cutting price and hence the competition comment or if there's other dynamics going on where there are markets you now think maybe you need to reevaluate whether you need to be there at the size or scale that you were there previously. So I guess the border question there is, if there's anything you could add to why on the pro forma basis that EBITDA dollar growth wasn't as good as the revenue growth. M. Chad Crow - Builders FirstSource, Inc.: Well, obviously a lot of that is the gross margin compression we are dealing with. Probably some of the toughest margin comps I've seen in the 17 years I've been here. Round numbers we lost 100 basis points of gross margin quarter-over-quarter, but still held our EBITDA margin flat, so that obviously speaks to the synergies we're getting out of the business. Now we didn't get some of the incremental this quarter that I thought we would get to be honest and part of that we explained that – earlier is the commission, incremental commission expense and some negative trends on group health, but even if you look on a year-to-date basis, our sales are up a little less than 5% and we've grown our EBITDA margin 110 basis points even with 30 basis points or so on a year-to-date basis of gross margin compression. So, yeah, it's been a rough quarter or two quarters from a comp standpoint, but if you look over the longer period, the year-to-date period, I think, we've done a really nice job of delivering on the cost savings and improving that EBITDA margin in what was a fairly tough sales and gross margin environment from a comp standpoint. Al Kaschalk - Wedbush Securities, Inc.: I agree. Yeah, no, thank you for that color and good luck, guys. Thank you.

We have time for two more questions. We'll take the next question from Keith Hughes of SunTrust Robinson Humphrey. Please go ahead. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Thank you. You had talked about some numbers for the fourth quarter. There's always lots of charges in your numbers given the big merger. The modest increase in EBITDA over prior year, is that off a $76 million number in the prior year in the fourth quarter? M. Chad Crow - Builders FirstSource, Inc.: That's right Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. And you're talking, it sounds roughly about the same kind of dollar increase year-over-year that we saw here in the third. And this gets into the last question. Are you still struggling with in the lumber business, quoted activity that you're dealing with higher lumber prices than when the quotes came in? M. Chad Crow - Builders FirstSource, Inc.: Yeah. Well, we're still dealing with some of that bleed over for sure, not quite as bad – not as bad but, yeah, you – you know, typically even if the builder issued a PO four months ago and for whatever reason he just now asks for the product to be shipped. We would still honor that old pricing. So, yeah, there's still a little bit of bleed over, but to Floyd's point not like it was. Keith Hughes - SunTrust Robinson Humphrey, Inc.: And that's why I'm a little confused that you're not talking about – given the you're still $12 million of incremental improvement in EBITDA from your synergies. I'm just a little surprised you're not talking about something that's well into the 80s versus whatever range it's in. Is there some other offset there? M. Chad Crow - Builders FirstSource, Inc.: Well, part of it is, the two less shipping days, one of those being a holiday. So we're not getting the revenue and we're still incurring the payroll expense. And again we're still going to have – this will probably be the most difficult gross margin comp we have on a quarter-over-quarter basis for Q4. So you know I feel really good about once we get into next year and get this tough comp environment behind us that, as I said earlier, we'll get back to a more normalized margin contribution, EBITDA margin contribution on incremental sales. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay, and then moving – excuse me – looking at products within the quarter, there were two areas and you've sort of talked about this in the introduction, two areas where we saw pretty substantial negatives year-over-year; the gypsum, roofing, insulation and siding, metal and concrete products. At least some of those were up pretty good in the third quarter. I guess, are those in branches that specialize in those products or are those co-mingled with the other products you sell in the traditional ProBuild or Builders FirstSource branch? Floyd F. Sherman - Builders FirstSource, Inc.: There is some co-mingling, but a large portion of it is specialized branches, especially when you're talking the gypsum side of the business. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. And is that something that – we've had several negative quarters, is that something that you plan to stay in long term? It seems like it's really pulling down the growth numbers for the company. Floyd F. Sherman - Builders FirstSource, Inc.: We're always evaluating different parts of the business for whatever reason, right now we have no plans to exit any part of the business or there may be a location here or there that we're looking at that's underperforming, but we have no broad plans right now to close locations either, but to your point it is something we're continually evaluating. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. And then in siding, metal and concrete products, can you give us any feel there, which of those was the weakest? Jennifer Pasquino - Builders FirstSource, Inc.: So the metal is the gypsum metal... Keith Hughes - SunTrust Robinson Humphrey, Inc.: Right. Jennifer Pasquino - Builders FirstSource, Inc.: ...essentially, so you get gypsum and metal, but – and you are – concentration of gypsum business is largely in the Northeast quarter, which is the most impacted on a multi-family – we've been commercial there too basis, so that's a big drive for us across both. And then I want to remind guys that our roofing business is largely an aggressive R&R business for us, and in Q3 last year there was in that area more storms, so more roofing, so we had a little bit of lap, we had pretty good growth in Q3 on a pro forma basis last year in roofing. So I'm not sure that we feel any of those, declines are kind of systemic outside of the fact that in the markets they play in, if multi-family is down 9%, our gypsum business and especially in the Northeast was down even more – it could be more impacted. Floyd F. Sherman - Builders FirstSource, Inc.: On the roofing business, very directly attributable when you look at the locations that had last in 2015 the benefit of some – a lot of hailstorm activity as well as tornadoes, and they haven't had it this year and that's where in those particular markets is where we've seen the shortfall in sales. The rest of the roofing operations are all performing very nicely. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. Thank you.

We have time for one more question. There are no further questions. So that does conclude the question portion of today's call. I will now turn the call over to Mr. Floyd Sherman for closing remarks. Floyd F. Sherman - Builders FirstSource, Inc.: Okay. We appreciate everyone joining the call today, and we look forward to updating you on the progress of our business initiatives in the months ahead. If you have any follow-up questions, don't hesitate to give Chad or Jen a call. Thanks and have a great day.

That does conclude today's conference. Thank you for your participation. You may now disconnect.