Linda Hasenfratz – Chief Executive Officer Roger Fulton – Executive Vice President, Human Resources Dale Schneider – Chief Financial Officer Jim Jarrell – Chief Operating Officer

Mark Neville – Scotiabank Justin Wu – GMP Securities Peter Sklar – BMO Capital Markets David Tyerman – Canaccord Genuity Brian Morrison – TD Securities

Thank you. Good afternoon, everyone, and welcome to our first quarter conference call.

Joining me this afternoon are members of our executive team, Jim Jarrell, Mark Stoddart, Roger Fulton, and Dale Schneider, and various members of our corporate and group finance team. Before I begin, our General Counsel, Roger Fulton, will make a brief statement regarding forward-looking statements provided on this call.

Roger?

Thank you, Linda. Certain information regarding Linamar discussed in this teleconference, including management’s assessment of the company’s future plans and operations may constitute forward-looking statements.

The information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results may differ materially from those anticipated in the forward-looking statements due to factors, such as customer demand and timing of buying decisions, product mix, competitive products and pricing pressure.

In addition, uncertainties and difficulties in domestic and foreign financial markets and economies could adversely affect demand from customers. These factors, as well as general economic and political conditions, may in turn have a material adverse effect on the company’s financial results.

The company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Linda?

Thanks Roger. I’ll start off with sales, earnings and content.

Sales for the quarter were $1.28 billion, up 23% from Q1 last year and in excess of our double-digit growth target Once again, the sales increase well exceeds growth in our markets where global light vehicles were up 1% and access markets up 14%. Linamar’s growth continues to drive from excellent market share expansion.

Earnings saw another fantastic level of growth in the quarter with net earnings up 43% over last year to $115.7 million or a $1.75 per share. Net earnings as a percent of sales in Q1 were 8.9%, extending once again our trend of margin enhancement over prior year.

We continue to run well above the top end of our expected normal annual net margin range of 5% to 7% thanks to continued control of launch costs, great results from Lean initiatives, a strong performance at Skyjack, and a favorable mix of business in both segments. Given the continued strength in performance and the strong start to 2015, we are now targeting net margins for the year to be in the range of 7.75% to 8.25%.

Coupled with the sales growth I will detail shortly, this should result in Linamar achieving double-digit earnings growth again in 2015, as targeted. Earnings growth continues to drive solid performance and return on capital employed and return on equity, reaching 21% and 26% respectively for the quarter, a fantastic result that again exceeds our 20% goal.

It’s great to see the consistent performance in this important area for our shareholders. Investing in our future continues to be a priority for us at Linamar.

In the first quarter, we again saw strong cash flow, which was used to invest in acquisitions, namely our new German forging business, and CapEx for launching programs. Our balance sheet remains strong despite these investments, with net debt to EBITDA staying well below one and cash available for growth sitting at about $640 million.

Plans for our strong level of cash and available debt include continued investments and future expansion through both Greenfield and acquisitive opportunities. CapEx, excluding acquisitions in the quarter, was $83 million, or 6.5% of sales.

We expect to see CapEx continue to gradually build over the next several quarters, given the heavy level of new business wins we have seen. So, we do expect 2015 CapEx to be back in our normal range of 8% to 10%, or close to it, although still of course at the lower end.

In North America, content per vehicle for the quarter was $147.39 up 11% compared to last year, thanks to both higher content on growing platforms with a variety of customers in North America and our new forging businesses. Our Q1 automotive sales in North America were up 14% over Q1 a year ago, reaching $653 million compared to $573 million last year in a market that was up 2.5% in production volume.

Linamar’s trend lines for content per vehicle growth in North America has been consistently positive over the past several years. In Europe, content per vehicle for the quarter was $40.62 up more than double from last year thanks to our new forging acquisitions and other business launches.

Our Q1 automotive sales in Europe were up, more than doubled as well over Q1 a year ago, reaching $213 million compared to $99 million last year in a market that was up 0.4% in production volume. Market share expansion in flat markets is particularly consistent growth.

Business in hand in Europe, including our recently completed acquisition, is expected to increase by almost 50% of our 2015 footprint in the region over the next four years, which should continue to drive meaningful content growth for us. In Asia, content per vehicle for the quarter was $6.57 up 1.4% from Q1 last year.

Vehicle production levels were 11.5 million units in the quarter, up 1%, which resulted in Q1 automotive sales up 2.3% to a total of 75 million. Other sales were up 13.5% in the quarter at 337 million compared to 297 million last year due to growth at Skyjack.

Turning to our market outlook, we are seeing a reasonably positive outlook in most of our markets globally. For the global light vehicle business, the forecast is for 1.9% production growth globally this year.

Predictions are for moderate growth in light vehicle volumes in North America and Asia, up 2.4% and 3.2% respectively, and a slight decline in Europe of 0.6% to reach 17.4 million, 45.9 and 20 million vehicles respectively. In a similar pattern, moderate growth is expected globally in 2016 at 2.92% and 4.9% in North America, Europe, and Asia respectively.

Industry experts are predicting on-highway medium-heavy truck volumes to grow this year in North America, expected up 7.8%, be flat in Europe, up 1.9% and see a decline in Asia of 5.4%. Next year is predicted to see flat volumes in North America and Asia, with stronger growth in Europe, which is expected to be at 11%.

Off-highway medium-duty and heavy-duty volumes are predicted now to be flat globally in 2015, and showing more moderate growth in 2016, up 2% to 3% globally. Turning to the access market, outlook in the industry is positive, with a very strong start to the year for Skyjack.

Both Skyjack products and all Skyjack regions enjoyed strong double-digit sales growth over prior year in Q1. Market growth in the quarter was around 13%, and Skyjack expansion was more than double that level.

The market is expected to increase 5% to 10% in 2015 and up to 5% in 2016. Skyjack’s strategy continues to be global growth and product line expansion to drive increased market share in all products and regions, and the team is executing very well on that strategy.

Our target is to see Skyjack hit $1 billion in sales by 2020. Turning to new business, we’ve seen a solid start to the year in new business wins as we continue to take advantage of several new transmission and engine platform changes in the coming years.

Launching business continues to be significant, and will drive substantial growth for us. First, look for ramping volumes on launching transmission platforms to reach 15% to 25% of mature levels in 2015, and grow another 50% to 60% next year.

These programs will peak at more than $2 billion in annual sales. Volumes on launching engine platforms are predicted to reach 30% to 40% of mature levels in 2015, and grow another 70% to 80% next year.

These programs will peak at nearly $800 million in annual sales. Volumes on launching driveline platforms are predicted to reach 40% to 50% of mature levels in 2015, and grow another 55% to 65% next year.

These programs will peak at nearly $650 million in sales. I think it is important for you to understand the scope of launches in the various systems, as it illustrates a key element of our strategy.

Involvement in more than one area of the vehicle, namely the engine, the transmission, and the driveline systems, means we have a variety of programs for a variety of platforms all launching at different times. Once we look at that picture globally we see even more potential test points in which to win new business.

Introducing the Skyjack business cycle in other markets, such as commercial vehicle or our highway vehicle and energy, also adds additional cycle to planning for new platform launches and sourcing. It’s this diversity in product, customer, market and geography that allows us to always have the prospect of finding new opportunities, and therefore always be winning and launching new business, which drives more consistent and sustainable growth for us.

To summarize our launches, we now have 176 programs launching, representing nearly $3.5 million of annual sales even after $285 million of business shifted from launch to production last quarter. Depending on industry volumes, programs currently on launch will add a total of another $400 million to $500 million to our top line in 2015, noting programs that just shifted from launch to production will also be adding incremental sales of about $50 million.

Launches for 2016 are expected to add another $550 million to $650 million to sales. Skyjack should see continued growth at somewhat better than market growth levels as market share penetration continues.

Temper that growth with the loss of business that naturally ends each year, noting to expect probably near the low end of our normal range of 5% to 10%, in both 2015 and 2016, and of course normal productivity give back as you develop an estimate for sales this year and next. Clearly, given the level of launches and market conditions, we are expecting to again see solid sales growth at Linamar this year and next.

And with margins staying strong, solid earnings growth as well. We target double-digit top and bottom line growth each year at Linamar and feel very confident in our ability to deliver these results based on launching business and expected margin performance.

New business wins are of course also filling in growth for us in the mid-term, as well. At this point, we’re looking at more than $6 billion in booked business for 2019 based on current industry volume forecasts layered with new business wins, our forging acquisitions, and adjusting for business leaving.

It’s very exciting to see this level of secured growth for us in the mid-term in line with target. On the operations side our plants continue to perform extremely well, both on mature business metrics and in terms of launch.

The integration of our new forging businesses is going very well, as well. LFC and Seissenschmidt, and a small existing forging plant from a prior acquisition, have been grouped together under the newly named Linamar Seissenschmidt Forging Group.

The Group is developing strategies for global growth through existing facilities in North America and Europe and evaluating the right timeframe to enter Asia. We are adding an HM 35 forging machine in North America this year and an AMP-50 into Germany within the next 12 months.

We are currently launching a variety of new programs in the forging group associated with Linamar programs, a good example being our gear business, which is launching in North Carolina. LFC will be forging the gears, which will be machined nearby at our LNC campus in Asheville.

Our new forging capabilities have added immeasurably to the product offering for us at Linamar. This is a very technologically advanced, fully automated process, where parts are forged as quickly as 120 parts per minute, or two per second.

This is a very sophisticated, high-tech business, and the engineering team has been excellent to work with. The engineering team and the forging group has already started working with our Linamar plants to look at new design ideas for existing or launching products to take out waste and optimize product design.

They have already implemented their first successful project. We’re also pleased with the financial performance of the forging group to date.

The level of earnings has been a little better than what we expected, and we are working on many cost saving ideas together. The forging business has a similar level of capital intensity in terms of the sales that can be generated from investments comparable to our traditional business.

And we feel the margin range will also work its way to the same level for our traditional powertrain business at 7% to 10%. Overall, I think the new group is performing extremely well and meeting all the strategic goals we set out to achieve.

Other new plants include our new Indian facility, our new gear plant in North Carolina, another plant in Wuxi, China currently under construction, and a refresh facility in Guelph, all of which are in various stages of refurbishment and launch, and performing to plan. With that, I will turn it over to Dale to lead us through a more in-depth financial review.

Dale?

Thank you, Linda, and good afternoon, everyone. As Linda noted, Q1 was another solid quarter for sales and earnings growth, with sales hitting $1.3 billion, which resulted in strong net margins of 8.9%.

For the quarter, sales were $1.3 billion, which represents an increase of 22.5% or $234.8 million increase over the first quarter of 2014. Operating earnings were $155.8 million for the quarter, up $43.7 million or 39% over Q1 2014.

Net earnings increased by 42.7% from the first quarter 2014 to reach $113.7 million. Our net earnings per share for the quarter increased $0.52, or 42.3% from the first quarter 2014 to reach $1.75 in the quarter.

Included in the net earnings for the quarter was a foreign exchange loss of $1.8 million, which was a result of a $2.6 million loss caused by the revaluation of our operating balances and an $800,000 by the revaluation of our financing balances. The net FX loss related to the balance sheet revaluations in the quarter impacted EPS by $0.02.

From a business segment perspective, the loss on the revaluation of our operating balances of $2.6 million in Q1 was a result of a $5.7 million loss in the powertrain driveline segments and a $3.1 million gain in the industrial segment. Further looking at the segments, sales in our powertrain driveline business increased in the first quarter of 2014 by 23.2% to reach $1.1 billion in the quarter.

The growth was as a result of sales increases due to the acquisition of the Linamar Seissenschmidt Forging Group, higher sales from the favorable changes in FX rates, significant number of programs in launch in North America, Europe and Asia, and increased volumes on mature programs. On the operating earnings side, powertrain driveline earned $109.2 million in the quarter, up 33.5% from the first quarter of 2014.

The increase in the operating earnings is mainly a result of the increase in volumes, a favorable sales mix towards highly capital-intensive programs, productivity and efficiency improvements achieved in the quarter, and the earnings related to the addition of Linamar Seissenschmidt Forging, which were partially offset by increased management and sales costs supporting the growth. To clarify the impact on the change in FX rates, there there’s no material impact to the operating earnings in the powertrain driveline segment, even though sales have increased as a result of the favorable changes in FX rates.

This is because there was an offsetting impact to operating earnings as the change in the FX rates has an unfavorable impact to purchase cost. If we remove any foreign exchange gains or losses related to the balance sheet revaluations, then the adjusted operating earnings for powertrain driveline would have been $114.9 million in the quarter compared to $82.6 million in the first quarter of 2014, which represents a 39.1% improvement.

Turning to the industrial segment, sales were up $35.1 million in first quarter of 2015, or 19.5% compared to the same quarter 2014. This increase is mainly the result of the increased demand in the access equipment markets globally, higher sales from favorable changes in FX rates, scissor lift market share growth in North America and Europe, and also boom market share growth in North America, Europe and Asia.

Industrial segment’s operating earnings were $46.6 million in the quarter. This improvement of $16.3 million represents an increase of 53.8% from Q1 2014.

The improvement can be primarily attributed to higher margins resulting from the favorable changes in FX rates, increased market demand and market share growth in the access equipment markets, productivity and efficiency improvements, being partially offset by increased management and sales costs supporting the growth. If we remove any foreign exchange gains or losses related to the balance sheet revaluations, the operating earnings for the industrial segment would have been $43.5 million for the quarter compared to $26.8 million in the first quarter of 2014, which represents a 62.3% improvement in operating earnings.

Returning to the overall Linamar results, the company’s gross margin came in at 17.1% for the first quarter, up from the first quarter 2014 levels of 15.6%. Gross margin in the first quarter of 2015 increased due to the improved margins as production volumes increased in both segments, higher margins as a result of the favorable sales mix, two highly capital-intensive programs, better margins as a result of productivity and efficiency improvements, earnings related to the addition of the Linamar Seissenschmidt Group, and higher margins as a result of the favorable changes in FX rates within the industrial segment.

COGS amortization expense for the first quarter was up $7.4 million for the first quarter 2014. COGS amortization as a percent of sales decreased to 5.2% in the quarter from 5.7% in the first quarter of 2014.

The decrease in amortization as a percent of sales is mainly attributed to the higher utilization of our fixed assets as a result of the volume increases. SG&A costs increased $60.3 million from the first quarter 2014 levels of $53.3 million.

On a percent of sales basis, SG&A levels in the first quarter 2014 decreased to 4.7% in comparison to the first quarter of 2014 levels of 5.1%. The increase on a dollar basis is mainly the result of additional costs from our acquired and expanded facilities and management and sales costs that are supporting our growth.

Financing costs have decreased by $1.8 million in the quarter versus the first quarter of 2014. The decrease is mainly due to higher interest earned on the long-term finance to receivables, lower borrowing rates on the credit facility, lower borrowing rates as a result of maturity of the $40 million U.S.

private placement notes on October 15, 2014, being partially offset by increased debt levels as a result of the acquisition of the forging business. As a result, the consolidated effective interest rate decreased to 4.2% in comparison to 4.1% in Q1 2014.

Effective tax rate for the first quarter of 2015 was 25% compared to 24.8% in the first quarter of 2014. Effective tax rate for Q1 is slightly higher mainly due to a less favorable mix of foreign tax rates in Q1 2015 compared to Q1 2014, and the unrecognized benefit of losses experienced mainly in Europe.

We are expecting the effective tax rate for 2015 to be in the range of 24% to 26% due to the expected mix of foreign tax rates in 2015 that will be less favorable. Linamar’s cash position was $180 million on the first quarter on March 31, 2015 in comparison to $144.5 million on March 31, 2014.

The first quarter of 2015 provided $63.6 million of cash from operating activities. Non-cash working capital increased from the first quarter of 2014 levels of 9.1% to 10% of annualized sales for the first quarter of 2015, primarily as a result of the addition of the Linamar Seissenschmidt Forging Group.

Debt to capitalization remained flat at 28.3% in Q1 2015, from 28.4% in Q1 2014 even with the addition of the Linamar Seissenschmidt Forging. We are pleased to see that debt to cap has continued to remain well within our target of 35%.

Similarly, the net debt to EBITDA also remained flat at 0.7 times for both Q1 2015 and Q1 2014. The amount of available credit on our syndicated revolving credit facility was $455.6 million at the end of the quarter.

To recap, Linamar enjoyed a terrific quarter that saw strong sales growth and earnings growth, which gave rise to solid results from both sales and earnings. Sales were up 22.5% to reach $1.3 billion for the quarter.

The strong sales led to solid earnings performance in both our operating segments, which resulted in net earnings improving 42.7% for the quarter. The strong results in the quarter have also resulted in further improvements to return on equity, which reached 25.9% in the quarter.

That concludes my commentary, and now I’d like to open up for questions.

Hi, good afternoon, everyone.

Good afternoon.

Great results, obviously. I guess I’m just trying to reconcile the Q1 margin versus the guidance.

So, I’m just - within industrial, can you just maybe give us a sense of how much of the benefit was from FX on the margin side?

Well, we’re not disclosing that level of detail. I mean, certainly it was an impact for Skyjack I mean, Skyjack manufactures in Canada and is an exporter.

I mean, most of its products export. So, it’s seeing some benefit there.

But, I have to say that, even if I strip all the FX benefit out of the analysis, we still performed at a much higher level in terms of margins than prior year. So, the business is improving quite substantially on its own thanks to overhead absorption Lean improvements as they continue to build their boom business and build their global footprint.

So, that is quite a big factor, as well, but FX for sure is part of the picture for Skyjack.

Sure. And then, I guess within powertrain, I guess I would have thought FX would have been a bit of a headwind, but again some nice margin expansion.

So, I guess just for the remainder of this year, at least, could you maybe help us think maybe why that might come down a bit from here? Or actually, again, there’s a pretty big gap between eight, nine, and sort of the guidance that you’re providing.

Yes. Well, don’t forget that Q1 and Q2 always perform well above Q3 and Q4.

So, when I talk about [indiscernible] to eight in the quarter, that’s for the full year. So, you absolutely need to expect it to perform strongly in the first half, and then weaken in the back half.

So, you should, when you’re putting your predictions together, have a look at that. The powertrain segment does continue to perform at solid margins levels as well.

I mean, as we’ve talked about, the powertrain group is pretty close to being naturally hedged across a - we’ve tried to do so certainly across a variety of currencies. So, the FX impact on the Group is pretty minimal.

There’s not much. There’s some top line effect, typically not much in the way of bottom-line effect, and not much in the way of margin effect.

So, you shouldn’t expect FX to be doing much in the powertrain group.

Was there any - sorry, I may have missed it - any disclosure on margins for the acquired businesses?

Well, I talked in my formal comments about trying to work towards that sort of 7% to 10%. We’re a little low to that at the moment in the forging group, but not far off.

And we feel that we can work them into that range.

Okay, and I guess just one last. And again, I don’t want to just harp on the FX, but on the revenues, did you guys give us any constant currency growth?

Did we give you - sorry?

Sorry, just any constant currency growth, revenue growth, just again ignoring FX? And it might have been in the MD&A, but I didn’t catch that.

No. I mean, typically, because exchange overall is not a material fact, we don’t provide disclosure around the different types of exchange.

I mean, we tend to on this call talk about some of the balance sheet impacts on the income statements and revaluating assets. We do that every call.

But, exchange is more than that right? I mean its balance sheet impact.

It is impact pulling through pricing and costs on the income statement, and its translation impacts from foreign entities so they are translation back to Canadian dollars, then. We have never provided disclosure around all of those other two pieces other than to tell you, in summary, very little impact to powertrain overall, bigger impact on the industrial segment.

But, given the relative size of the industrial segment, the overall impact to us is not material.

Okay, thank you very much. I’ll get back in queue.

Hi, good afternoon. So my first question’s on the Skyjack growth.

You guys kind of talked about a number of factors that drove growth in that business overall. I guess the demand’s been higher.

We talked about market share gains and product line expansions. If we’re kind of rank those, how would you kind of rank them as bigger impact to less impact?

Well, I mean, all are having important impacts. I mean, we’re certainly growing on a global basis as we continue to expand into Europe and Asia, as well.

Our boom business is certainly growing, and is a contributing factor as well to our overall growth. So, we’re really seeing, as I mentioned in my formal comments, double-digit growth pretty much across the board.

But, when I look at the various products, and I look at the various regions, we are seeing double-digit growth across the board, so feeling pretty positive about our strategy playing out.

Can you comment about the customers? Were there any specific type of customers, like the rental companies, that have been driving that?

Any comments there?

I think we’ve increased our customer base globally, so that obviously has increased the revenue side. And back to the comment, I would say that the product portfolio that we now have has probably gained us a lot more on the revenue side, because we’re selling to the same customers, and you can see that these new products are being accepted very, very well in the marketplace.

And maybe just a follow-on on the margin, a margin question. I mean, revenues in the industrial business was up 20%, yet your operating profit was up greater than 50%.

I didn’t think that there was that much operating leverage in that business, but I was wondering if you can give us a little detail?

Yes, I mean, I’ll reiterate some of the impacts. I mean, for sure overhead absorption I mean, we’re up 27% in sales on the same footprint, right?

So, that makes a big difference in terms of overhead cost absorption. As we continue to sell more and more booms, we’re becoming more and more efficient at manufacturing that product.

So, we have been and will continue to grow margins on those products as they continue to grow in terms of volumes. So, those are definitely key factors as well as other Lean initiatives.

And exchange absolutely played a factor, as well. When we have a situation of a low Canadian dollar against other currencies, whether it be U.S., because although we sell a lot to the U.S.

out of Skyjack, we also sell to the UK, for instance. So, watching what happens with respect to the Canadian dollar and the pound also impacts Skyjack.

But in general I mean, if the Canadian dollar is weakening against a basket of currencies, the industrial group is going to be performing better. But, I’ll just reiterate again that, even if I strip out the impact of FX, the margin that they are producing is well above last year, and in fact above the range that we talk about, as well.

So, they’re performing very strongly regardless of exchange, but exchange is really providing the icing on the cake for Skyjack right now.

And maybe just moving on to the powertrain business, you guys clearly have a very large launch book. At what point does the launches start to have some impact on margins?

Or do you see that pretty spread out in terms of how these things are launched over the next [indiscernible]? You’re not anticipating any meaningful impact?

We’re not expecting a meaningful impact in terms of launch. I mean, as the business that we have launching rolls in at various points over the next three, four years and we feel pretty comfortable about our ability to launch that capably.

I mean, obviously that changes quarter to quarter. If there’s a big amount of new business, something is going to start out sooner that could obviously impact that.

But, in general, given the mix that we’ve got and the mix we see in the future and the launch levels that we see over the next several years, we continue to see strong margin performance at Linamar.

Okay, great. Thank you very much.

Thank you. There’s this outcome that just continues quarter-after-quarter, where you say you’re getting higher margins as a result of the shift to more capital-intensive programs.

So, Linda, I’m just wondering if you could talk a little bit about what these programs are. And is that shift structural, or do you expect that you’re going - can you see when you look out across the launch of the product portfolio that it’s going to revert back at some point?

Well, Peter, it totally depends on what the business mix is and what that contract looks like with those customers. So, I’ve talked about capital intensity of programs such as one of the factors, right, so that more capital intensive programs definitely have higher margins associated with them.

But, that’s because the level of capital spending can be quite significant. And if we don’t have high margins, then we would struggle to reach our 20% return on investment.

So, there’s a price to pay for that margin, namely the capital spending. Material content as a mix of business is an important factor as well, which is often related to the relative capital intensity in terms of capital - dollars of capital to dollars of sales, but can also be reflective of a situation where we have a consigned material contract, where perhaps our customer is the foundry and is consigning the product to us, so we don’t pay for the product.

The margins are higher, obviously, in that case because you don’t have the cost of that casting or forging in your number. So, that’s an important element, as well.

As I say, if we look at the mix of business over the next several years, I mean, it doesn’t change enormously. I mean, it can change, for sure.

But, given the mix we see, and again, the launch levels we see, we continue to see strong margin performance.

Okay. The next thing I wanted to ask you about is your North American content per vehicle, when you look sequentially versus the fourth quarter, even after taking into account the North American forging acquisition, the content per vehicle was up quite strong, like a higher growth rate than you normally see quarter-to-quarter.

And I’m just wondering, was there anything in there, or just a lot of business was ramping?

It was a couple of things. I would say about half of the increase - not sequentially, but if I’m looking at year-over-year, but it’ll give you an idea sequentially, as well - was related to the forging businesses, not just the American forging business, but the European forging business also ships to the U.S., so, there’s content we picked up there when we closed the Seissenschmidt deal.

And about half of it is just related to higher sales, and on platforms that are doing well. I mean, we even saw sales increase with some customers whose volume decreased in the quarter over prior year.

So, it’s a fact of new programs creating higher content this year than we had last year in the various platforms. So, about half of it’s coming from that, and about half of it’s coming from the forging.

Okay. And also, Linda, do you mind repeating your guidance for the roll-off for 2015 and 2016?

I missed it. I believe you said 5% to 10%, but then you gave some flavor as to whether it’s going to be at the low end or the high end of the range.

At the low end.

Okay, for both years?

Yes.

Okay. And then, my final question, if I may, going back to Skyjack, can you talk a little bit about the telehandler product lineup and what’s developing there?

My understanding is that this year you’re undertaking a reengineering of the product portfolio similar to what you did previously with the booms in order to bring your - in order to, so you have the opportunity to change your price position on the product.

Yes. So, number one, we’ve got the tier four compliance project that we’re putting in place, Peter, so that’s underway.

And then, we have two basic models that we’re underway developing. And both will be in sort of a launch mode throughout next year.

So, the first will come out earlier in the year, and then the next will launch later in the year. And again, we’re doing what we’ve done on the booms, which I think is a really big contributor to the cost side we’re doing, [indiscernible] cost attacks, which you have heard from us before to really put the right cost level into these, that we can compete in the marketplace.

And sorry, what is tier four compliance? I’m not familiar with that.

Basically an engine upgrade for emissions that you need to have a new standard at. And so, that’s what we’ve been putting in place.

Okay, thank you.

Yes, good morning, or good afternoon. I’d like to just follow up on the margin question.

So last year on powertrain drivetrain, you had actually no seasonality in powertrain drivetrain last year. I understand what you’re saying about seasonality, but is there a possibility that you’d see that again this year?

I would say that what we saw last year was a bit anomalous for powertrain. We ended up having a much stronger Q3 than we normally would, and that was really just based on specific customer issues that were going on.

I mean, you should certainly expect to see some drawback in Q3. That would be the normal pattern.

I mean, it can only - it can change, obviously, if our customers decide that they’re going to run through shutdown, for some reason, then obviously that would change.

Okay, fair enough. And would you expect the current run rate be sustainable based on the book of business you have for 2016?

We haven’t put margin targets out there for 2016 yet. I think I’ll do that with our second quarter to get more specific.

What I can say in general is that we do feel good about strong margin performance continuing and not seeing major erosion over the next several years. Clearly there will be some pressure from the launches, from new assembly business that’s coming in, but we do think it’s manageable.

But I’ll have a better picture for 2016 for you next quarter.

Okay. So, just philosophically, or where we are right now, is this an unusually good period and year, do you think?

Like, last year was very good, the year before was very good, this year looks like it’s going to be even better, or at least as good as last year. Is this a point of unusually high mid-cycle kind of performance, or is it something that’s more sustainable in the longer-term, maybe not at the bottom of a recession, but in general in the longer-term?

Yes. I mean, I’ll just reiterate what I just said.

I think that as launches ramp up in the next couple years, new assembly business launches, there’s going to be some pressure on margins. But, we don’t think that we’re going to see major margin erosion.

We think that we’re going to see some strong margins going forward, based on the mix of business that we currently see and the level of launches that we currently see.

Great. And then, just moving on to the industrial segment, so your margins were up nearly 5% in the quarter.

Is it conceivable to see that kind of year-over-year improvements throughout the year, or was there something unusually good in Q1 that would be difficult to repeat?

Well, I mean, as noted, exchange was an impact. So, I mean, you obviously have to take that into consideration.

Obviously depends on what’s going to be happening there. We do obviously expect the underlying operational improvements to continue, but, that said, they were already getting put in place last year, as well.

So, I don’t know that it’s fair to slap 5% onto every quarter on the margin side. That may be a little bit tough for them to swallow.

Okay. And then, just finally on the powertrain, going back to that, on the margin side, understand your comment about not getting a dollar change from the FX.

But, if both the numerator and denominator are moving by similar amounts, you are getting a percentage pickup. Would that have had a very material impact in the quarter?

We’re seeing top line pick up in the powertrain segment, but not anything significant on the bottom line, and in terms of margins, almost nothing.

Okay. I’m just trying to understand if this is having an effect on the percentages, though.

Like, if you go from 9.5% to 10.3%, which you did in the quarter, is any of that - what would have happened without the exchange moving? Because obviously one part of the equation’s not moving, and the other is.

Yes. I mean, the overall impact to powertrain is pretty small in terms of margins, because your top line’s coming up but your costs are increasing at the same time to offset it.

So, you end up with very little impact on the margin side. If I strip out FX, there’s almost no margin impact to powertrain.

Great. Okay, I’ll leave it at that.

Thank you.

Thank you. Linda, when you increase the net income margin guidance to 7.75% to 8.25%, is there any change in the operating segment target range, as well?

And then, staying on with guidance, you continue to allude to double-digit top and bottom line growth. Are you referencing 2016, as well?

I am talking about margins for the segments. I’m not giving anything different in terms of our expectation.

There, I mean, obviously just going to be moving towards the higher end of the range. Or for the investors, we’re obviously over top of the ranges, reasonable to expect if the exchange piece continues.

And yes we are talking about double-digit growth this year and next year.

Okay. And then, very briefly, margins at Skyjack, you’ve gone through all the contributors to that.

But, last quarter you did reference the competitiveness in the industry, and with the market share gains that you’re getting, what are you seeing in terms of the pricing environment in constant dollars?

Pricing is, it’s competitive, I mean we are up against two strong competitors in the market place, so every project is a competitive price environment. Saying that, I would basically say that our product is very well received in the marketplace.

And once you have a customer that signed up to having a Skyjack, they will maintain as long as you’re maintaining competitiveness.

Okay. Just changing gears onto the forging acquisitions, Linda, when you announced the acquisitions, you detailed the early nature of dealing with OEMs and your ability to expand the relationships with the customers as a result.

I know its early days here, but are you seeing any indication of penetrating new customers, or expanding the relationships due to the forging capability?

I think I can answer that, and [indiscernible] I mean, it’s been outstanding. I mean, I would say that the amount of exposure that we have trade with probably nontraditional customers, agent customers and more penetration to current customers has been very, very well received.

And we looked at global expansion, as Linda mentioned for this forging business, that we’re working on different equipment ideas for the long-term.

So, you’re winning new contracts from that, or you’re seeing heightened bidding activity?

Yes.

Okay. And then, very last question, the net income margin for LFC in Q1 versus Q4, there was a decline, and obviously this is a new business for us.

Can you just address why that the change sequentially and how we should look at that, going forward?

Yes. There was a couple of issues at hand there.

First, we had some one-time items which positively impacted Q4 and some others which negatively impacted Q1. So, that’s a big part of the comparison.

And secondly, we - and this is sort of characteristic of the business - had a bit of a timing issue in terms of metal surcharges, whereby we are paying an older higher price for steel but being paid at a more current lower price by customers. And that will rectify over time, but you can see a little bit of lumpiness in the results just from some of those timing issues.

And lastly, we have started charging LFC a corporate allocation for the pleasure of being part of our Company, which also does impact results. So, again, I would focus on the overall group and expect something a little short of that 7% to 10% range.

But this year by getting into the low part of the range next year.

Thank you, very much.

Okay, great, thank you. Well, to conclude this evening, I’d like to leave you again with three key messages from the quarter.

First, we’re continuing to deliver on strong, double-digit top and bottom line and feel confident in our ability to continue to do so in the coming years. Our new forging group is performing well and has been an excellent addition to our offering from a technology, process, and design perspective.

And finally, margin performance remains strong and we expect to continue the strong performance going forward. Thanks and have a great evening.