David Raso: Thank you. May 16, the meeting, can you just give us some expectations around the meeting? I think particularly around the margins. I think people are just trying to figure out the operating leverage in the company in the last couple of years, maybe not quite the margins people were expecting. Even the guide today, it was nice to see the power gen margin increase. But overall, the relative increase in earnings relative to the increase implicit in the sales guide. Still not that tremendous. So I’m just curious if you can sort of tee up a little bit what should we expect May 16. I’m trying not trying to steal the thunder of the meeting but just to level set..?
Jennifer Rumsey: Yes. Well, obviously, I won’t tell you what we’re going to tell you specifically, but certainly, you can expect us to talk about overall strategy for the company where we think we’re at against some of the 2030 goals that we shared in our last Analyst Day and certainly talking about revenue and margin expectations and what the drivers for that will be within that. So I think you’ll hear more about that for sure, David, at our Analyst Day.
David Raso: Okay. And one quick one. The JV income in the first quarter was up year-over-year, but you’re still guiding the year down. And I’m just trying to make sure we know why is it down? Is it China not continuing some of the improvement? Is there other parts of the royalty income? I know it’s a pretty lumpy line item within the JV income. If you can help us with that would be great. Thank you.
Mark Smith: Yes. I think you’re exactly right, David. There’s really two moving parts of the operating performance, which generally tends to move in line or better than the market rate. And then we get very lumpy tech fees from the joint venture back to Cummins consolidated results as new products are launched and last year was a particularly strong period of new product launch, to be certain development milestones. So the tech fees are going to be down, particularly in the engine business primarily and that’s offsetting any assumptions around the market growth. I will say it’s — there was some truck OEM build increases in the Q1, but that was more on expectations or hopes about going forward, we’re still waiting for clearer signs of momentum as China, as you know, is the biggest driver of the earnings there. But it’s really lower tech fees, which were a big at last year — a little bit in components, mostly in the Engine business.
Chris Clulow: One quick add there, David. And we also have built in our plan the launch of the battery joint venture later on this year post approval. So, that will have some losses as well as that comes back online in the second half.
Mark Smith: Which is embedded in Accelera.
Jennifer Rumsey: Yes, we’re expecting that. We have final regulatory approval for that battery JV. So, we’re expecting that’s going to start flowing in Q2.
Operator: Thank you. Our next question comes from the line of Angel Castillo with Morgan Stanley. Please proceed with your question.
Angel Castillo: Thanks. Good morning everyone. Just back to the Power Generation segment. I think you raised your guidance to 10% to 15% versus a 5% to 10% previously. Can you just talk about the price versus volume mix makeup of that versus prior expectations? Is this a matter of getting better production than you kind of anticipated? Or is pricing growing and just kind of what are you seeing from that perspective?
Jennifer Rumsey: Yes. So, there’s a couple of dynamics to keep in mind in that market. So, first of all, as I articulated, the order board is pretty long. And so some of the work to improve price/cost in response to inflation and performance of the business takes some time to play out. So, we’re starting to see stronger pricing leverage come into that that market. And then we’re continuing to, of course, drive improvements in the Power Systems business and efficiency in manufacturing and supply chain. And I noted the launch of the new products that we’ve also designed to be able to sell at some higher margins. So, there are some favorable dynamics that have been happening in the power gen market compared to historically where we would have been in margin performance.
Angel Castillo: That’s very helpful. Thank you. And along the lines of new products, just you talked about your X15 diesel engine that’s coming out for kind of ahead of the emissions regulations. Can you give us a little bit more as to what you kind of expect in terms of guardrails around pricing and margin potential improvement? I know you typically run emission cycles when you get kind of the opportunity to reset and recover some of that margin. So, as we think about maybe not necessarily specifically to any given year, but those projects — or those products and kind of the implications to your price and margins as those get rolled out?
Jennifer Rumsey: Yes. So, certainly, like in past emissions regulations, our goal is to deliver incremental value to the customer, to have margin improvement associated with that. You will see with the 27 EPA regulations, we already talked about the emissions warranty dynamic. You will also see added content, in particular, after-treatment system to meet those regulations has notable additional content. And then you will also have the warranty dynamic that we always have as we launch new products where we began at least to launch to accrue at a higher rate from a warranty perspective until the product is out in the market, and we’ve demonstrated warranty. So, those are the moving parts that you’ll see. We have not yet shared specific numbers on what we expect around exact pricing for those products.
Operator: Thank you. Our next question comes from the line of Tami Zakaria with JPMorgan. Please proceed with your question.
Tami Zakaria: Hey, good morning. Thank you so much. So I wanted to understand the margin guide a little better. It seems like excluding Atmus, which probably — which was a headwind separating that out is becoming a headwind, but you raised the full year guide by about 10 basis points, expecting better margins in Engines and Power Systems. So just to get a sense of what’s really driving this improved margin expectation? Is it higher volumes? Or is it more cost savings? Or is it more price cost? So any color there would be helpful.
Mark Smith: Good question. You’re right that the Atmus separation is a little bit dilutive to margins. So yeah, good that you picked up on that. It’s really volume and a little bit of cost reduction activity. Those are the two primary drivers.
Tami Zakaria: Okay, great. Thank you.
Mark Smith: Thank you.
Operator: Thank you. Our next question comes from the line of Rob Wertheimer with Melius research. Please proceed with your question.
