But I think people are just anticipating what can happen as the used inventory start to grow and we’re proactively getting after that. So really the North American market for large ag still is very positive for us and we don’t see signs of that slowing down.
Mig Dobre: Understood. As you mentioned financial services, pretty sizable increase in the managed portfolio. So I guess I’m curious as to how you see that progressing going forward. And also revenue as a percentage of the managed portfolio has remained fairly steady despite interest rate increases. I guess, the way I’m interpreting that is you’re essentially trying to offer good financing deals for your end customers. Is that a proper interpretation? Are you essentially — services as a tool?
Oddone Incisa: Look the growth of the portfolio is a mix of nominal growth, because we have higher prices of the equipment and also some increase in penetration. So we are financing more of the equipment to retail — to end customers, right? But also, of course, we had some growth in the dealer inventories over the last 12 months. So we have volume growth in there as well. We’ve had — of course we’ve had interest rates increasing all over the world. As we all know, we have — we tend to match our funding with our receivables. So we are increasing the price and the cost for customers. Unfortunately of financing, but we’re probably not doing at the full pace and we have had some margin compression in particular last year when we were delaying some of the deliveries by six to nine months of tractors and combines we have been generally honoring the condition that we had agreed with the customers when they order the tractor that comply.
We will revert to that and we will have — we target a margin of around 2% on assets on financial services and I’m confident we’re going to get back there.
Mig Dobre: Okay. Thank you.
Operator: Our next question comes from Steven Fisher of UBS.
Steven Fisher: Thanks. Good morning. Can you just give us a sense for how the pricing was in ag by region? I’m just trying to figure out if the volumes were down in every one of your regions. I know you talked about the sprayers, I guess in North America and the South American dynamics. But I guess I’m just wondering how broadly were the volumes down and in which categories and why?
Oddone Incisa: So in terms of units, we were marginally down globally. We were up on high-horsepower tractors in North America, up in combined in North America in terms of shipments. We are — in terms of nominal sales, so dollar sales we’re down only in South America compared to the second quarter of last year.
Steven Fisher: Okay. And sorry, what was Europe — was volumes were?
Oddone Incisa: Volumes were flat but there was a lot of pricing in Europe. So, I mean unit volume were flattish but a lot of pricing so sales were up in Europe.
Scott Wine: But just a reminder, in Europe we had our best June retail performance. So the team did a really nice job of creating opportunities for a better second half and we’re pleased about that momentum.
Steven Fisher: Okay. And then, with such good margins this quarter in ag but volumes down, I mean how should we expect operating leverage to look as you actually get volumes growing again more broadly? I mean to what extent is there even more margin upside here when you get that positive leverage and more cost benefits?
Oddone Incisa: The second quarter is typically the quarter with the best margin in the year. That wasn’t the case on the last year where we had a stronger third quarter. We think we’re going to revert to the normal seasonality this year. So I expect the third quarter to be sequentially lower than the second quarter in terms of margin but in line or higher than last year.
