Jennifer Rumsey: Yeah, as you said, we did a kind of a low and a high scenario for adoption at our last Analyst Day and you can expect that we’re going to refresh our view of that as we go into the Analyst Day in May. What I would say is that, there are regulations and incentives that are helping to start to drive that adoption, maybe more towards the lower end of those scenarios is what we would think and we are continuing to look at pacing of investment to make sure that we’re managing that in line with how we see adoption actually occurring.
Tami Zakaria: Got it. So if it’s more leaning toward, let’s say, the slower version, does that have a dampening or somewhat negative or slowing impact on the Accelera targets that you have out there?
Jennifer Rumsey: Yeah, we’re still within, it would still fall within the range that we gave in the Analyst Day, consistent with those range of scenarios that we suggested and recall that, a large portion of that revenue in 2030 for Accelera is in the growth of the electrolyzer business as well.
Operator: Our next question is from Noah Kaye with Oppenheimer and Company. Please proceed.
Noah Kaye: Thanks so much. First off, a housekeeping question. I’m trying to understand cash flow dynamics as we exit the year and the leverage profile. Obviously the settlement impacts that a bit, but, you typically have a target to return 30% of cash flow to shareholders. How are we thinking about return to capital this year and where you’re kind of aiming to end the year on leverage?
Mark Smith: Yeah, so morning, Noah. So we’re going to start the year with the same stance as last year, invest in the business, dividend focus and some more de-levering. That’s the way we start in the year. We’ll continue to evaluate that with our board as we see how the cycle unfolds. At least that’s our initial stance. Of course, part of our, in years where we’ve generated more cash than we’ve needed, then we’ve returned significantly more than the 50% in any given year, but anyway, we think this is the approach right now until we see a little bit more on the cycle.
Noah Kaye: All right. So you do expect to de-lever as we get to the end of the year.
Mark Smith: Yes.
Noah Kaye: Okay. And then just the guide for China truck seems a bit wide. Can you kind of talk us through the low end and the high end of the range in terms of the scenarios you’re envisioning? Is it high end contingent on stimulus? Walk us through what you’re seeing and assuming.
Chris Clulow: Yeah. That really reflects low visibility, right? So we’ve come off a very weak base, but there just isn’t clear signals yet from the market as to what’s actually going to happen. So we can build a case. It’s hard for me to think of a case that’s a lot lower than where we are today, but just the overall pace of the economy continues to be sluggish and so that upside really leaves room for something unexpected on the stimulus side, which has happened from time to time in China, but we don’t have brilliant insight at this point in time. The outlook is cloudy and the conviction from OEMs is not quite there yet. We’re doing well with our customers, launching more products. We’re bullish on continuing to outgrow in the market in China, both consolidated revenues and in the performance of the JVs. We’re all set to outperform.
We just need a little bit of help from the market overall, but it’s not as tangible as we’d like at the start of the year. Of course, we’ll look at the same data points and provide you with an update. Hopefully, by the end of Q1, we tend to have a stronger view of the. And my voice is done for the rest of the morning.
Jennifer Rumsey: Chris and I will answer the rest of the questions.
Chris Clulow: We’ll see how much it clears on China.
Operator: Our final question is from Michael Feniger with Bank of America. Please proceed.
Michael Feniger: Yeah. Thank you guys for squeezing me in. Just the share count’s been kind of flat to slightly up. There’s a comment in the release about a focus on debt reduction, payment of dividends. Can you just flesh out the priorities in 2024, because I know Mark mentioned with Atmus, I heard buybacks. Just maybe you can reiterate the framework of how we should kind of think about Atmus in 2024 as we move through the years, some of the puts and takes there.
Mark Smith: The main impacts of Atmus operation will be obviously, they’ll set off on their own pursuing their growth strategy and as this final step, we will swap Cummins shares for — investors will retire Cummins shares in exchange for Atmus shares. So our share count will go down if the exchange is successful. The reason our share count here in the past 18 months hasn’t been changing or drifting up is because we stopped the share repurchase as well. We de-levered post the Meritor acquisition, which we’ve been telegraphing to investors. We’ve got a little bit more of deleveraging to go, and then we’ll continue to evaluate whether we, what our opportunities are to generate the best returns for investors, either through organic growth or through more capital returns, but that’s the basic way it’s going to work. The share count will go down on the separation.
Michael Feniger: Fair enough. And Mark, I want to let you go and get better. Just quick question for you is just on Meritor, I think ’23, I think there’s revenue about $4.8 billion, maybe EBITDA a little bit above $500 million. Just when we think of the guide for ’24 on components, anything you can help us unpack about how that Meritor in ’23, how that kind of trends in ’24 relative to your overall components guide? Thanks everyone.
Mark Smith: Got it. And I will say I’m feeling better than I sound, and that’s largely because of the record cash flow. So please, as I said at the start, don’t read into my breaking voice. Meritor achieved the goals we had for this year. It is not a segment on its own. We provided that data for the first full year for transparency purposes to make sure investors had a read on how we were doing after a little bit of a bumpy start when we first acquired Meritor. So that’s all rolled into the guidance, but it’s safe to say we’ve got further improvement in Meritor going into 2024 and we’re really pleased with how the team is doing there, Ken Hogan and his team. So we’re excited about that going forward. So thank you. Thanks everybody. Appreciate it.
Operator: This will conclude our question-and-answer session. I would like to turn the conference back over to Chris for closing comments.
Chris Clulow: Thank you, everybody. That concludes our teleconference for the day. I appreciate all of you participating and your continued interest. As always, our Investor Relations team will be available for questions after the call. Take care.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time, and thank you for your participation.
