Operator: Our next question is from Kristen Owen with Oppenheimer. Ma’am, your line is open.
Kristen Owen: Great. Thank you for taking the question. Wanted to ask about the construction margins. You lifted the target once again and really narrowing the gap with your ag business is that — what is arguably a different point in the cycle. Just given some of the comments of normalization in pricing across the portfolio and what you talked about in the prepared remarks for 2024, how we should think about the sustainability of that improved margin performance in the construction segment? Thank you.
Brent Norwood: Hey, good morning, Kristen. As it relates to Construction & Forestry margins, I would kind of refer back to some of the comments we made in our opening remarks around the structural things that we’ve been doing in Construction & Forestry for really the last four to five years that have really reformed that business into a more sound and solid business that, to your point, has closed some of the gap between large ag over the last couple of years. First and foremost, the most important move we made was the inclusion of a roadbuilding business. That’s an end market that we view as high growth, lower volatility, and it’s a very attractive market to be in. And we acquired the number one asset in that business via Wirtgen.
We’re really still early days executing our excavator strategy. The first important step there was the dissolution of the Deere-Hitachi joint venture, which we successfully negotiated last year, and we’re on our way to delivering a full line of Deere designed excavators, which I think is really sort of the next phase of the strategy there and how we’ll see that business continue to drive further margin performance going forward. And we didn’t tout this a lot publicly, but we were very active in portfolio management over the last couple of years, really focusing that portfolio on the products where we’re most differentiated. And in the markets where we really have a right to play and a right to win. So that’s — we think all of those things are structural and continue on a go-forward basis.
Josh Jepsen: Yes, Kristen, one thing I’d add is as we look forward and you think about what — is there another leg in this journey for C&F, and we believe there is, and it’s around technology and how do we integrate technology to help do the jobs that our customers do and do them better and more efficiently, more productively and more sustainably. So, we’re seeing that with our first suite of automation tools, things like grade control. We see more and more opportunities to leverage technology into construction, into roadbuilding, in particular, that are going to create real value for customers. We think we can differentiate in the marketplace and as we create that value for customers, in turn get paid as well. So, we’re excited about the future there, and we see continued opportunities. Thank you.
Operator: Our next question is from Rob Wertheimer with Melius Research. And your line is open.
Rob Wertheimer: Thanks. And actually, I wanted to follow up on [what Josh was] (ph) just talking about, where, construction pricing, what you’ve achieved to date? Is that largely market related, or do you feel like you’ve had enough technology flow in to sort of support a rising price overall? And maybe as a part of that question, I suppose, definitionally, if you have a tech widget, you charge for that [indiscernible] volume, I think. But I assume there’s just an overall price [indiscernible] as your products deliver more value to customers. So maybe just talk about where you are in technology in construction? Thanks.
Brent Norwood: Yeah. Rob, as it relates to — I’ll first start with the comment around pricing and then we can talk about technology more broadly. But as it relates to the pricing that we’ve achieved, I mean, I think you’ve seen that broadly in the construction equipment markets. We work hard to lead in price as best we can. We try to be one of the most disciplined industry players as it pertains to price. I think we’re still early days in terms of getting higher average selling prices on account of more technology, more innovation in the equipment. So, we are starting to see that. I think on specific product lines, we can definitely see that in terms of the entire portfolio rising, we’re still early days there. So, I think more headroom for us as we begin to integrate technology. Wirtgen is certainly going to be one of the product lines that benefit the most from a higher average selling price as we include more technology in the coming years.
Josh Jepsen: Rob, I’d say timeline-wise, if you think about this journey we went on, on the large ag side in 2013, ’14, when we began, I would say we’re probably similar to that timeframe. So maybe not quite a decade, but I think behind, but we’re in those early days of starting to drive more of that technology in. And the excavator is a good example where we’re just getting started as we design that fully integrated machine where we’re going to see — in our minds, what we’re seeing and what we’re hearing from customers that are testing really tremendous technologies and usability. So, we’re excited about the future there, and we think we’re very early days. Thanks, Rob.
