Cummins 3Q16 Earnings Call Notes

Cummins’ (CMI) CEO Tom Linebarger on Q3 2016 Results

Assume weakness

“I don’t mean to imply that there won’t be recovery in some markets, we’ve seen decent recovery in the Chinese truck market this year. I just mean to say that in broadly speaking, our view is that markets are across Cummins markets broadly that they continue to be weak and while we may see some bottoming, we don’t have an instigator for a significant growth directly in front of us. So our view is, given that we get in this for a couple of years now, the right posture for the company to take is to assume relatively weak markets, set our cost structure accordingly, find opportunities for cost savings, productivity gains, and then continuing to invest in those opportunities where we think markets could improve and we will be able to gain share and gain business accordingly.”

China market has improved, our stock is inexpensive

“In the China truck market, we’ve seen improvements already this year, I would give a forecast for the China truck market, what that means for 2017, we just don’t know yet. We have not seen much of an uptake in Brazil yet. Whether or not we will be there next year, I just don’t know. My view is that evaluation of the Cummins stock is really a good deal, really inexpensive. So I think it would be a good buy for anybody for any of those reasons, but again, my view is that we’ll have a better view in February about what the individual markets are.”

It feels like we’ve been in a downcycle in powergen for a decade

” I’ll share this one, but ha it only been five years, because it feels like a decade. So it does seem like we’ve been in the downcycle for a while to your point, and frankly longer than we’ve seen in the past, which is frustrating. So obviously we’re kind of to the discussion earlier from David, we’d like to see some of the things turn back. We just haven’t seen yet signs that they’re turning back and, of course, power generation, reflects a couple of things. One, in emerging markets, it reflects infrastructure building and general economic growth where the margins start to get under threat and things like that. And then it reflects non-res capital spending in some of the more mature markets where we’re selling standby. And again, while our non-res capital spending is in a disaster in the US and our business is in a disaster, both of those statistic broadly across the world are still quite there. So our view is that where we start to see turnaround in power-gen is when we start to see infrastructure spending starting to come back in some of these emerging markets across the world and then we see non-res capital spending coming back more aggressively in some of the more advanced countries and we just, right now, that’s just not obvious when that happens. ”

Rich Freeland

There are some green shoots in oil and gas and mining

Yes. I’d come on mining and oil and gas, no one is calling a turnaround. Certainly, we are not and production orders. There are, I’d say there is a couple of positive signs out there anyway. Commodity prices up is one, but what we are seeing is some more enquiries and some more business, both on rebuilds of products and aftermarket parts, which is generally the precursor to actual orders going up. So it’s a greenshoot, but we’ve seen just little bit of that to give some optimism there. We are down 7% in mining this year and again, no one is really calling for that to turn around this time other than the aftermarket at least.

Cummins 2Q16 Earnings Call Notes

Cummins (CMI) N. Thomas Linebarger on Q2 2016 Results

Reset our growth view on emerging markets (power gen)

” we have reset our overall view about growth in emerging markets to – moderated those over prior views. I think that’s not a surprise. Everyone has probably done that. And then secondly, the time it’s going to take to recover, looks like it’s going to be longer and that’s, year-by-year, we’ve been pushing that out, unfortunately which is one of the reasons we are in a bit of a catch-up mode in power generation but we basically said we need to act now, because the recovery of the markets doesn’t seem imminent.”

Miscellaneous Earnings Call Notes 5.5.16

Colgate-Palmolive (CL) Ian M. Cook on Q1 2016 Results

Sentiment not all doom and gloom in China

“I have to say, having just returned from Latin America and India and China, the consumer that you see on the ground, the behavior that you see on the ground, is really quite vibrant in India; and in China, is not doom and gloom, some concerns, but not the headlines that we read every day. Conversely, in Russia and Brazil, the consumer sentiment, as we have said before, is more negative.”

Flextronics’s (FLEX) CEO Mike McNamara on Q4 2016 Results

The environment is very slow, very weak but somewhat stable

” As far as the macro, we’ve been mentioning that the macro’s been soft, particularly that we see it in the industrials, for quite some period of time. We’ve probably been talking about it for at least three quarters. We continue to see the same kind of softness. We consider it to be a reasonably weak market and we don’t see the market getting stronger, but we see it somewhat stable. We don’t see a significant downside. We just see it very slow and very weak. ”

Cummins (CMI) N. Thomas Linebarger on Q1 2016

We do not see obvious signs of a turnaround in the high power segment

“The truth is we don’t know if there’s more downside to come. We do not see obvious signs of turnaround today.”

China is a market where some things are improving

“it’s partially because we have just seen China promise better and beat the market, not be that strong the rest of the year, a couple of years in a row, so we want to be prudent and watch and see a couple of quarters before we really call an upside and also just fundamentals don’t look that much different. So, I think that’s the place where maybe if things are improving, as some people suggest, we could have some upside in JV income there. ”

Etsy’s (ETSY) CEO Chad Dickerson on Q1 2016 Results

GMS vs Revenue

“Let’s start with GMS. During the first quarter of 2016, the Etsy marketplace generated $629.9 million in GMS, up more than 18%. Growth in GMS is driven by growth in active sellers and active buyers…Turning to revenue, during the first quarter, total revenue was $81.8 million, up 40%, driven by growth in seller services revenue and, to a lesser extent, growth in marketplace revenue.”

Match Group’s (MTCH) CEO Greg Blatt on Q1 2016 Results

Tinder MAU continues to grow, but slower in North America

“In terms of Tinder MAU, it continues to grow well. Again, as I’ve said, it’s slower growth in North America than in the rest of the world, which is natural just given the rollout. Volume of new signups continues to be very strong, and we’re showing improvement in reactivations and retention, and those things collectively drive the MAU growth, but it continues to be solid”

Ares Capital’s (ARCC) CEO Kipp deVeer on Q1 2016 Results

We believe this recovery is largely technical

“We are happy to see the fear in the market that was so prevalent in the fourth quarter and the early first quarter subsiding a bit, which eases concerns that we are headed for more significant market correction in the near term. With that being said we believe this recovery is largely technical and without a meaningful change in fundamentals, our attitude and our approach is generally unchanged. We remain cautious but confident that we can find select transactions with strong relative value attributes, amidst the broad opportunities set that our team is able to access.”

Seeing dramatic declines in banks involvement in leverage finance

“the fourth quarter and in even the first quarter you seeing a really dramatic declines in the bank’s involvement in the leverage finance markets in particular, in mid-market. So there is just less and less activity there. I’d say there has also been lack of any apatite on the behalf of investors for dividend or recapitalization deals so it’s really been a focus for 6 months on new money deals and the issue around new money deals is, I think an equity issue on the LBO [ph] side, multiples have gotten very high for private equity firms and as they look around it, the B quality and below companies, you really want to pay less and/or see more growth, and they haven’t had the ability to pay less and/or see more growth.”

Alibaba Group Holding (BABA) Daniel Yong Zhang on Q4 2016 Results

Chung Tsai – Executive Vice Chairman

Chinese consumers will propel China’s shift to a consumption driven economy

“Chinese consumers have a healthy balance sheet and ability to spend. This will propel China’s shift from an export and investment-led economy to a consumption-driven economy. Alibaba rides the secular tide as we enable more products and services, whether they are domestic or import, to reach the consumer.”

Jacobs Engineering Group (JEC) Steven J. Demetriou

Mining companies are facing most challenging commodity recession of our generation

“Our mining clients are facing one of the most challenging commodity recessions of our generation. And similar to the oil and gas situation, it’s all about preserving capital, reducing spending, and deferring projects for as long as possible. We believe we’ve hit a bottom in mining and that stabilized the business, especially in Asia and the Americas, with a successful focus on sustaining capital programs.”

Cummins 4Q15 Earnings Call Notes

Cummins (CMI) N. Thomas Linebarger on Q4 2015 Results

Industry demand in China decreased by 24%

“Our full-year revenues in China including joint ventures were $3.3 billion in line with 2014 as we significantly outperformed very weak end markets. Industry demand for medium and heavy duty trucks in China decreased by 24% for the full year as the industrial economy slowed.”

Almost all of our markets are declining in China even as the economy grows

“There is a couple of things going on in China. One, you know obviously is that from an economic point of view, there is a shift going on from what was largely an industrial and export economy to some more balanced economy; at least that’s what they’re trying to do. So almost all of our markets are declining even as the economy grows. And that’s just a reflection of that shift. We provide a lot to infrastructure in those kind of segments.”

It’s not clear that we’ll ever hit the peak number of trucks that were sold in China again

“And second thing that’s going on of course is efficiency improvements. So in the truck market for an example, the number of trucks sold in its peak, it’s not clear that we’ll ever hit that number again. It kind of depends. The efficiencies are improving, but so is the potential. So many parts of China where there is not much infrastructure built yet, the government is likely to build more infrastructure there.”

There is an increase in demand for equipment quality

“what we do know, is that as they have increased their focus on emissions out of their equipment and the quality, the demand for quality, and more professional fleets and operators increases, the demand for our products is increasing. So as a percentage of the total trucks sold, our market share continues to increase, and we are benefiting significantly from that along with our partners there.”

Pace of decline in US truck markets may be slowing down

“They’re not – the pace of decline might be slowing down in some markets, for example, on the off-highway markets. Although they’re still declining, which is remarkable, they are declining slower and again we boar a lot of the decline of the truck market in the second half. ”

There’s always room for further restructuring

“unfortunately, always room for further restructuring. I think the thing you’ve heard from us is that our – we find a way to do well in good and bad times, whenever they face us. And we want to do that quickly and with urgency and so that’s what we’re going to continue to do. We want to make sure we take our actions not in a kneejerk way, in a sensible way that leads to long-term performance of the company. But under the circumstances, we obviously had to make adjustments because conditions are weak. And if they got significantly weaker, we’d do what we needed to do to make sure that we continue to generate strong financial results even in the face of that.”

Cummins 3Q15 Earnings Call Notes

Cummins’ (CMI) CEO Tom Linebarger on Q3 2015 Results

Worse than expected slowdown in Brazil and China

“Revenues and earnings in the third quarter declined from a year ago as a result of very weak demand in global off-highway and power generation markets and a continued slowdown in Brazil and China. Although we anticipate lower demand in these markets, orders have fallen further than expected, causing disappointing results for the company”

Reducing headcount

“we will reduce our professional headcount by approximately 2,000 people, with the majority of these reductions to be completed by the end of year.”

Competitors in the Euro are benefit from low Euro

“in the power gen segment we have now seen some pricing competition come in, primarily as a result of low Euro. So there is just a number of competitors in the European area that are Euro based costs and so areas where Eurozone exporters can compete with us, we are seeing some price competition in the gen set”

We had a slowdown in August, what was surprising is that continued into September

“We did start to see a bit of a slowdown in August, mainly in the components and engine segments. That’s not unusual. So having that slowdown in August is not the first time that’s happened. What was surprising and disappointing was the slowdown continued into September, again primarily in those two segments. ”

We thought emerging markets were starting to bottom, but they’ve weakened further

“we have set our plan not expecting a whole bunch of improvements in those markets, but they were starting to bottom, just as you suggest and if anything would be level or coming up. And in fact, what’s happened is they have gone down further. And that’s, I think, what maybe is the thing that says we haven’t clearly bottomed in most of those markets. We thought we had and we have not and where the bottom is, we are not exactly sure, but it doesn’t look like we have reached it. “

Cummins 2Q15 Earnings Call Notes

International revenues declined due to stronger dollar and weakness in Brazil

“Cummins International revenues declined by 6% year-over-year mainly due to the negative impact of appreciating U.S. dollar and weakness in all end markets in Brazil”

Heavy and medium duty truck demand in china down 30% as economic confidence weakened

Industry demands were heavy and medium duty trucks in China declined by 28% in the second quarter and is down by 30% year-to-date as the industrial economy continues to soften.We have lowered our full year forecast for the truck market to decline 30%, it’s down from our previous forecast of down 15% as confidence in the economy has weakened”

Demand for construction equipment remains suppressed in China

“Demand for construction equipment remains suppressed in China due to the slowdown in real-estate development and infrastructure spending. Industry demand for excavators in China declined 34% in the second quarter and is down 42% year-to-date with no visible sign of near-term improvement.”

India’s economy showing improvement

“Industry demand in the truck market increased 20% compared to the second quarter a year ago as the economy continues to show signs of improvement. We now expect industry truck production to increase 22% for the year, up from our prior forecast of 15% growth.”

Expect Brazil to be down 50%

“Second quarter revenues in Brazil were $110 million, down 43% from the second quarter last year due to the severe slowdown in the economy and near 40% depreciation of the real against the U.S. dollar. Industry truck production declined by 40% year-over-year and our shipments declined 38%. We have lowered our full year projection for industry production and now expect to decline of as much as 50% worse than our previous guidance of down 27% due to deteriorating business and consumer confidence. We expect our engine shipments to decline by 45%.”

Chinese freight numbers aren’t down as much as our 30% down forecast would suggest

“The potential macro market which was more your question, you see the uncertainty there the freight numbers are actually up a little bit so the freight numbers aren’t down to the level that demonstrate a 30%, so our view is there is still some kind of shake out would be going on here were a bit optimistic with the positive sign we see as in the freight numbers.”

Chinese moving to higher emission standards

“emission standards if anything are tightening they’ve got a date now Euro 5 implementation, they’ve got cities like Beijing, Shanghai talking about implementing Euro 6. There is a lot of support from local and federal governments about pushing ahead with emissions standards can all that just drive people towards better technology, more focused on fuel efficiency and the quality of emissions equipments”

It’s obvious that the government is serious about making changes in China

“I would add it’s obvious I think that the Chinese economy is going through a change and their governments are very serious about making this change. So, I don’t I’m not optimistic that we are going to see a big pump up in any of our end markets in a hurry because I think that Chinese government is going to try to keep going on this change of their focused in the government not so much on infrastructure and not so much on build and export a little bit more on consumer and a little bit more disciplined in the provinces”

There is some stabilization in the markets though

“I also think there is some stabilization going on in the markets. So they’re pretty low now and they definitely seem to be bottoming up and stabilizing as Rich was indicating, so we don’t see a further fall and we’ve indicated but we also don’t see necessarily a major turnaround in the near-term.’

Cummins 4Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Lots of positives but risks remain

“Although there are a lot of positives to look forward to in 2015 risk remain, particularly in the global off-highway markets and emerging markets. Weaker infrastructure spending in China and Latin America, declining commodity prices and the transition to new emission standards in developing economies all present risks to off-highway market demand. I am confident that our market position will improve in 2015 as our leadership in tier four final emissions regulations and the introduction of new products will enable us to outgrow weak end markets.”

Strong dollar is not ideal

“I think the simplest way to think about currency for Cummins is that we have — we built a lot of natural hedges in our business because we manufacture in lots of locations. But places where we have more costs than revenues as you guess would be in the U.S so strong U.S dollar is not ideal for us. That said we use a lot of global sourcing, we sourced products — materials from all over the world almost no matter where we assemble which helps us on that. The business unit that’s most exposed to currency is distribution business because we have revenues and profits in all of these countries and so we get translation hits as they come back to the U.S we translate them into U.S dollars and those are hard things to figure out and naturally hedge too.”

A new product innovation engine

“we are launching north of 70 new and improved products a year now. So our company on a global basis, we are basically in a new product introduction business. And that’s the way our customers can get ahead of their competitors is because they have new and improved products to go against them with. And so what we tried to build over the last decade is this new product introduction machine where we can launch new products that come out at quality levels that are better as good or better than the ones that they are replacing, which if you go back to the 90s was not our history, and so that’s the activity that I have been talking about.”

Cummins 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Construction demand in China has not rebounded

“Demand in construction markets has softened already from already weak levels as the pace of investment in infrastructure has not rebounded in China. ”

Conditions still weak in India

“Second quarter revenues in India, including joint ventures, were $293 million, down 14% year-over-year as conditions remained weak in most end markets. Enthusiasm over the election results in May and the prospect of pro-business reforms by the new government have not yet translated into significant change in orders in our key markets.”

Brazil weak too

“We now expect our full-year revenues in Brazil to decline by 15% to 20%, down from our previous forecast of a decline of 15%. Power Generation and Distribution revenues have held up relatively well in the weak environment in Brazil.”

More on China

“the underlying economic conditions in China have not been that robust. And so that has meant that although truck markets have improved, generally speaking, the demand is not as robust as it was before — when they were doing a lot of infrastructure building. And so those combination of factors is why we lowered the second half.”

We’ve lowered our long term expectations for China

“We definitely have lowered our long-term growth rates for China. A couple of investor conferences ago, we were saying, hey, we thought we might be growing 9% to 10% for several years. We have of course lowered that down and now what we hear from even from China was a pretty optimistic view is sort of 7% to 8% and increasingly our number is more like 7%.”

Our head of India thinks it’ll be at least until the end of the year before you start to see real improvement

“The Head of our India Operations, Anant, believes that it will be still through the end of the year before — we won’t see much improvement maybe until beginning of next year. I think he’s basing that on a bunch of consensus. He think sentiment will continue to improve, it’s pretty good right now and he thinks it’s going to continue to improve. But before you can see significant improvement in the markets, it may be that long before you see it.

Again people have different points of view, but that’s his is the most balanced I’ve heard on the optimistic and pessimistic side.”

Cummins 1Q14 Earnings Call Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

North America Heavy duty truck market better than initial guidance

“we are raising our full year outlook for most on-highway markets. Shipments to the North American heavy-duty truck market exceeded 22,000 units in the first quarter, an increase of 18% from 2013 levels. First quarter market share was 40%. We now expect the full year market size to increase by 12%, up from our previous forecast of an 8% increase. We still expect our full year market share to be at 38%, unchanged from our previous guidance.”

Chinese enforcing a move to newer emissions standards

“Last week, the Ministry for Industry and Information Technology, MIIT, published a directive that sales of NS3-compliant vehicles must cease by the end of this year. This is a positive development and clear plans for strict enforcement of regulations have not been shared. With the deadline for sales of NS3-compliant vehicles now set it would be logical to assume the demand for NS3 vehicles will remain strong for the remainder of this year. But with OEMs already having shifted a significant proportion of production to NS4 vehicles, it’s not yet clear how overall industry demand and OEM production will play out in the second half of the year.”

Raising China guidance

“full year revenues in China including joint ventures are now expected to grow 15% for the year, up from our previous guidance of growth of 11%.’

Indian economy remains very weak

“revenues in India, including joint ventures were $385 million, down 25% year-over-year due to weaker demand across most end markets as the economy remains very weak.’

Too early to call the bottom in India

“I would just say that it’s way too early to call the turnaround in India. We obviously have a bullish medium to long-term outlook on India. We think there’s a lot of positive trends in the country about developing middle-class and all the other things we have talked about before at our Investor Day. But short term the economy is in pretty bad shape. They have got budget deficits. They have got a divided government. The elections aren’t even complete. I don’t think they finish for another couple of weeks, counting of the votes. There is still quite a bit of turmoil.

So there’s no direct action from the government to resolve some of the critical issues. Road building’s slowed to a halt. A lot of the things that were going well have really slowed down over last year, not to mention, just the basic macroeconomic effect. So our view is it’s too early to call, and as you mentioned, our results are pointing out that things have definitely not turned around. If anything, we should see some stabilizing and given the comparisons in the second half, we will see some improvement I think, but that’s just because the second half comparisons are so much weaker.”

Expecting a big shutdown in production in Brazil in 2Q

“We are seeing OEMs planning significant shutdowns into the second quarter. I think without commenting specifically on our numbers in April we are expecting a big cut in industry wide production in the second quarter. Then the outlook for the third quarter somewhat uncertain we will keep going on other than how much commercial activity there is going to be. Typically Q3 is seasonally the highest quarter in the year, but it’s hard to see that right now. So I think clear move down, not clear what the catalyst for improvement in the short term”

There aren’t many good markets now

“Andy, you know, I’m the CWO, the chief worrying officer. So, I do quite a bit of worrying about markets, and as I mentioned a little bit earlier, there aren’t that many good markets now. There’s markets that aren’t a disaster and there’s markets that are doing better. I mean, the North American truck market is the one market I can say it’s actually getting pretty good. Still not a boomer yet; if we were discussing but it’s maybe on its way to one; but really, most of the other markets, are not very good. So, again, we’ll see what happens from here, but I do believe that if we get some turnaround and just the basic economic growth rates across the world and I think Europe is doing a little better than we thought and U.S. is definitely picking up. If we get some of these other emerging markets to get going, we’ll see very, very good growth and then I could comment much better about where we see the end of 2015.”

Still lacking visibility

“I think it’s pretty uncertain about what 2014’s going to finish out like and how that sends us into 2015. So, I guess, while I’d love to give you more or less confidence, I’d just right now, I don’t feel like I have any more visibility than I did three months ago or six months ago.”

Infrastructure development in China has definitely slowed

“a couple of things to think about China. One is that the infrastructure growth rates in China have definitely slowed down. And that’s why you see construction markets, Power Gen markets start slowing. That has happened and it is definitely happening. You can see it almost everywhere, just number of claims deployed, definitely slowed down. And we really haven’t seen significant improvement there. They’ve still got a very robust economy. Right GDP growth rates are still going, very large urban populations that are making products and buying products and things like that. And so that’s driving trucking. Trucking is still going and they have a lot of big road infrastructure. They have gigantic logistics costs in the country that they’re trying to reduce. So trucking well it is not unrelated.

Trucking growth rate can continue even if infrastructure growth rates, things like build out of cities, new factories, et cetera, airport slowdown and that’s exactly what we’re seeing now.”

The Chinese economy is still significantly weaker than a couple of years ago

“I would just tell you that from our perspective, the Chinese economy is still significantly weaker than it was just a couple of years ago, and that’s really at these infrastructure things.”

Cummins at Barclays Conference Notes

A digest of some of the top insights that I’ve gathered from this week’s earnings calls.  Full notes can be found here.

We were pretty disappointed with how we did last year

“So on one side of the ledger there was a whole bunch of stuff that we’re fairly happy about, but being quite honest, speaking for myself, speaking for Tom and the Management Team there was a sense of disappointment about the year. Sales were flat year-over-year but profits were down, and I think everyone who’s followed the stock over the past year or two, you’re familiar with the slowdown in some very important markets to us.”

Some high margin product lines were slow

“So where we sell high horsepower engines and gen sets into oil & gas, into power generation, into mining we make very good margins. So if there’s a really bad mix to get we got it last year, and that’s really hurt the performance from a profitability standpoint. Secondly, the performance of the power gen business wasn’t very good. I think we talked about that on the call last week, the earnings call last week. It was disappointing. Demand kept falling and we never got ahead of it, so that’s one area.”

North America great, China is turning the corner

“North America is definitely feeling more positive than I think any other region of the world just now. China is turning the corner. China I think over the last year and a half we were maybe a little bit flat on it. We had a good year last year – some of that was artificial with the pre-buy ahead of NS4. This year we’re projecting record revenues in China including our joint ventures”

India not so good

“India is not so good. India, I think we’re looking at flat revenues year-over-year. The economy as you’ve been following has been going through some difficult times. They’ve got elections coming up. I think nothing’s really going to happen before the elections and if I’m pessimistic more about India just now because I don’t see that coming out immediately. I’m very confident about the long-term outlook for India but I think the truck market will stay flat year-over-year”

Mining still a headwind, but not as bad as it was in 2013

“mining continues to be a headwind although not as much of a headwind as it was in 2013.”

Washington stuff was a turning point for customers

“As people get more confidence that there’s not going to be a stalemate in Washington that’s going to slow down the economy then I think they’ll start to feel better about making investments, that they’re going to feel they can get utilization on these investments.”

Local engines have the market share in China

“It’s not the global OEMs who have large market shares in China – they’re all investing and wanting more access to that market. But with our partner, with Foton for example in the light-duty we’ve displaced locally-made engines with the new 10 liter and 12 liter engine; we’re displacing local medium engines.”

Chinese don’t expect their engines to run as long as Americans

“So a vehicle in China, and this is not a negative comment but might last 300,000 km or 400,000 km. In the US our customers want engine warranty or expect the engine to run up to 500,000 miles under extended warranty – they actually expect the vehicle to last over 1 million miles. So one of the challenges we’ve got is to design things that have everyday reliability that don’t last 2x the life of the vehicle, so that’s some of the challenges in getting our cost structure right and what we’re focused on.”

Market not that excited about natural gas engines

“The market wasn’t feeling it, and I think it’s going to come eventually but I don’t think it’s going to be this kind of light switch event that some people are going to want to promote. But we continue to make investments both on-highway and off-highway for natural gas products and we’ll continue to do so. We think it’s a good market over time. I would just caution that it’s going to explode and be a terrific market tomorrow or early next year, 2016.”