Huntsman Corporation (HUN) CEO Peter Huntsman on Q1 2020 Results – Earnings Call Transcript

Peter Huntsman

Thank you very much, Ivan. Good morning, everybody, and thank you for taking the time to join us. Let’s turn to Slides 3 and 4.

Adjusted EBITDA for our Polyurethanes division in the first quarter was $84 million versus $124 million a year ago. Total MDI volumes in the quarter were up 2% as growth in the Americas and European regions for the first two months of the quarter were able to offset volume declines in Asia and slowing global demand trends experienced during March.

Our differentiated margins remained relatively stable. However, we continue to experience pressure on polymeric and component margins as softer demand in differentiated markets added to the existing margin pressure in upstream polymeric with more MDI being diverted into the polymeric markets.

Despite the near-term headwinds, we remain committed to our long-term strategy of investing in our downstream businesses and further differentiated product innovation. We are confident that the positive long-term trends for MDI urethanes around substitution and sustainable product solutions remain intact.

Looking at Polyurethanes regionally for the first quarter. Our American volumes were up single-digits for the prior year, while automotive was lower in the quarter. Several of our construction-related markets saw growth versus the prior year. Our acquisition of Icynene-Lapolla, which closed on February 20, added 3% to our growth in the Americas and approximately 1% globally. The integration of this business with our existing spray polyurethane foam business has hit the ground running. Especially given the current environment, we are looking to move as quickly as possible to fully integrate this business and to achieve our synergy targets by the end of 2021.

We expect to achieve approximately $15 million in annualized synergies. The combined integrated business is projected to have EBITDA margins well in excess of 20% and will be a leader in the sustainable high growth market. Within a few years, this will be a business with EBITDA in excess of $100 million. It’s a remarkable ecofriendly product, especially so when integrated with our TEROL Polyols business. We take the equivalent of 1 billion PET bottles, otherwise wasted as feedstock and produce a polyester polyol that is blended with MDI to produce the best and most versatile insulation in the world.

This is a very compelling, sustainable and ecofriendly alternative to traditional insulation products. We will continue to leverage our global footprint to grow this business in international markets. In order to appropriately manage our discretionary spending in the current environment, we have decided to push out our splitter project in Geismar, Louisiana by six months now estimated to commence operations in mid-2022. This will reduce our current year capital spend by $40 million. The project IRR remains well above our hurdle rate and we see this splitter as fundamental to our long-term differentiated growth in North America.

Turning to the Asian region of Polyurethane. Our overall volumes were down 8%. Our insulation business was up 11% over the prior year, while nearly all other business categories were down double-digit, except for our footwear and ACE businesses that were down single-digit. Due to the COVID-19, most Asian markets saw sharp declines due to mandatory shutdowns and other restrictions which impact production, supply chains, and end use demand.

While the region declined overall for the quarter, China saw improving trends starting at the end of February through March. We are cautiously optimistic that the worst is behind us in ACE in China. In Europe, we saw overall mid single-digit growth in the region. However, with the acceleration of the pandemic, we saw weakening volumes toward the end of the quarter.

Now looking forward to the second quarter. All but a handful of our Polyurethane operations have remained running albeit at a significantly reduced rate. Up to this time, we have not lost any customers or orders due to the closure of these facilities. Our urethanes business is currently experiencing a significant impact on demand due to the global economic havoc reaped by COVID-19.

This impact on demand is being felt in just about every one of our core markets. To be clear, we’ve never seen this sharp of a decline in global demand in such a short period of time. Our differentiated margins remain resilient, however, except for in China, both our differentiated and component product volumes are being significantly impacted. The seasonal uptick that we typically see in the second quarter is not happening this year as we have essentially lost the entire month of April everywhere, but China.

Our expectation for May and June are for sequentially improving conditions. To give you some idea of the declines we’ve seen, our automotive-related businesses in North America and Europe saw orders in the month of April versus the prior year decline between 75% and 90%. Even in China, which is believed to be on the backside of the pandemic, we saw orders materially lower than a year-ago in our construction-related businesses, which would include insulation and composite wood products, orders were down around 40% in April in both America and Europe.

Though the current global economic crisis is much different than the 2008 and 2009 financial crisis and ensuing recession, it is our best comparable period that we can point to. Important to note that we have learned a great deal from past crisis that has significantly improved our business over the past 12 years. I’d like to highlight some of the key differences between our Polyurethanes business today versus then.

First, we no longer have our PO/MTBE business that we sold at the beginning of this year. Secondly, we’ve increased our overall capacity by roughly 370,000 kilotons or 38% with expansions in all three of our upstream sites in Caojing, China; Rotterdam, Netherlands; in Geismar, Louisiana.

Also, and most importantly since 2009, we’ve meaningfully reduced our proportional exposure to the more commodity end of the portfolio and have greatly improved our overall product mix through our ongoing investments into differentiated businesses, including state-of-the-art splitters in Rotterdam and Caojing, strategic bolt-on acquisitions and global scale-ups. This increase in differentiated products amounts to approximately £800 million.

Lastly in 2008 and 2009, we had meaningfully higher inventory levels, including excessive levels of high cost benzene, which resulted in a significant drag in profitability for ensuing quarters. This time around, we’ve entered this crisis with tighter inventory levels and significantly less benzene. Though our Polyurethanes division today has continued commodity and exposure, we believe that we have meaningfully lifted the level of recessionary trough EBITDA.

Keep in mind that each recession is very different in terms of cause and effect, but because of the investments that we’ve made over the last decade, we believe our current trough EBITDA will be well above the previous trough, which was around $150 million during the 2008, 2009 period pro forma for the elimination of the PO/MTBE results.

In summary, our visibility into the second quarter remains tough. Currently, we can only see about three or four weeks ahead at best. With the expectation that our volumes could be down more than 30% versus the prior year, we expect our EBITDA could be around breakeven in the second quarter. However, this is highly dependent on the speed and timing of recovery in the number of product segments in the coming weeks and months.

Anthony Walker

Thanks guys. This is Anthony Walker on for Bob. I was just hoping to understand embedded within the Polyurethane expectation of breakeven EBITDA, are you idling or containing utilization levels at certain facilities and as such, taking on some unabsorbed fixed costs? I’m trying to think through the moving parts of volume and price, which would get you down at those levels and just was hoping to better understand the moving parts?

Peter Huntsman

No, I think that as we look at our Polyurethanes business, we will not be idling any of our MDI manufacturing facilities. We’ll obviously be matching the rate of production to demand that we see further downstream. At the present time, we see the demand at our Asian facility at around 70-ish plus percent, the Americas probably somewhere between 55% and 60%, and Europe around 60%, and we expect in May and June that those will continue.

I would just say, again, as we look at the visibility right now in the order books, and we talk about a breakeven scenario in Q2, I would hope that we’re trying to be as realistic as possible when we look at the economic slowdowns that we’ve seen over the last 30 days. And with a visibility before us of a matter of weeks of orders and so forth, I would just put some caution.

This is the first time we’ve really had a conference call that I remember over the last – well since we’ve been public, where we haven’t given more granular focus internally on the coming quarter and the coming year. And that’s just because of the lack of visibility. I mean, these markets can change if something were to come out with a vaccination or something forward with a cure, I think you’d see a materially better more optimistic future.

If you were to see a second wave that we’re to culminate here by the end of May, you might see a more calamitous second quarter. So I think that the numbers we talk about are breakeven, I think we’re trying to get what we realistically see right now and we’re matching that production of our MDI capacities with what we see in the market right now.

Aleksey Yefremov

Thank you, Peter. And just clarification. On Slide 4, you showed downstream Polyurethanes EBITDA of $200 million. So that represents about 36% of your 2019 segment EBITDA. So how should we think about that in relation to the 70/30 differentiated component mix that you also show on that slide?

Peter Huntsman

That $200 million should be looked at as the acquisitions that have been made and added to the business over the course of the last couple of years. So I would see those as being incremental to what we otherwise would have been making, had we been selling that MDI into an open and general market. Now obviously there’s probably – you get a number that’s that broad. There’s probably some subjectivity. It’s what that product could have been placed in the market and what that value was. But I think it’s as accurate numbers as we can come up with, when you start adding all those components together. I’d like to think that’s – that is an earnings that we have achieved that we otherwise would not have had we not done those acquisitions.

Kevin McCarthy

Yes, good morning. Either a two part question for you on MDI. I think you referenced that autos were down 75% to 90% in April. I was wondering if you could comment on what you’re seeing in the other end use markets in April for MDI. And then secondly, benzene is obviously down a lot on the back of crude oil, if we look at this from a unit margin perspective, how do you see that progressing through the second quarter recognizing your inventory flow through effects and so forth?

Peter Huntsman

Yes, I would say that we’ll start seeing some of the benefit of lower benzene by the end of the second quarter, but most of that is going to be a second half. Even if our – by the end of March, we had a record low inventory of benzene, but just as a reminder, we buy that benzene globally, it shipped globally. It’s stored. We make nitrile benzene. We then make aniline. In some cases such as our European site, we make that aniline in the UK. We ship it across the channel into Rotterdam. And so there’s inventory in some of those areas.

So when we look at that benefit of benzene, even if we had benzene literally running on fumes, which I think we are close to that by the end of March, it’ll take two months or so – two plus months to work out through the system. So I think most of that benefit will be a second half sort of a bottom line impact.

Now as we look at our businesses across the line, you asked about the segmentation of our Polyurethanes. And again, I would say that these are fairly accurate, but I mean, it’s really what we’re seeing right now, and these are obviously subject. I think to probably improvements, but as we look at automobile, order patterns in April, we’re seeing kind of down 60% in urethanes across the Board. That’s close to 90% something in the Americas and down maybe 20% something, 20%-ish in Asia. But globally, something like 60%. In May, that’s around down, we would say over the previous year, about 50%. In June, we’re forecasting, looking to orders and so forth down around 35% from a year.

And I think as you look across CWP, the composite wood and the other construction markets, we’d see – April down 35% year-over-year. And by the time you get out to June, looking at orders and the best visibility we have in talking to customers, so that being down somewhere around 20%. So again, you’re looking at an April succession of improvement taking place throughout May and June. And I would see a similar improvement to that in most of the businesses from elastomers, certainly going from 60% to 45% down year ago as you look out over April to June. And again, those are going to vary region by region.

So when the automobile companies start manufacturing here in the next week or two, are they going to start up at 20%, 25%, I think it start up at 50%. The OEMs we think have very low inventory. We think that there’s just a very little amount of product in that overall pipeline. I think that can be said for CWP as we look at our customer. So as we see this improvement in orders throughout April, May, and June, I’ve been in this industry long enough that you’ve just got to be an eternal optimist by this point.

But I think as we speak to our customers, I think there’s very little inventory in the supply chain. I think that you’re going to see an impact of the improvement on a month-to-month basis. But again, when I talk about the visibility that we have, again, exactly, how many units of automobiles will be Ford or GM or BMW be running at the end of May. That hasn’t been told to us.

The OEMs don’t seem to know at this point. And I think that’s – a lot of that’s going to be tied to what’s happening at the dealer end and consumer sentiment and a number of other issues over the next 30 to 60 days here. So sorry, Kevin, that was a long rambling answer, but I think when you look at that sort of segmentation, that sort of improvement on a month-by-month basis, I can almost go to on a business-by-business, division-by-division basis. You’re going to see fairly similar sort of recovery and improvements from April, May and June.

Frank Mitsch

A key necessity for sure. Hey, listen, I just obviously want to come back to the breakeven on Polyurethanes for the second quarter. Where was April? Was April negative in terms of EBITDA? Do you have a sense as to how the first months fair there?

Peter Huntsman

Yes. April was very close to that sort of scenario, and so I don’t want to get too granular in a month-by-month basis, but yes, it was progressively worse throughout the month.

Frank Mitsch

Okay, fair.

Peter Huntsman

Again, as I just give color on that, we expect to see that kind of a – I would look at second quarter as being very similar to the first quarter, but it inverted sort of a way, first quarter fell off very suddenly at the end of the quarter. The second quarter for us will end – will start very poorly. And I think we’ll start digging out of that hole and how fast it digs out and so forth. Again, I don’t want to be the pessimist here as much as I don’t want to – I don’t want to tell the market something that I can’t deliver. So as I look right now, as our teams look about what’s going on and so forth. That’s really where we’re coming up with the forecast that we shared with you.

Frank Mitsch

Well, Peter, that’s kind of understood. I mean, if I look back on 1Q as late as March, as late as late March, you guys were saying $145 million to $155 million in terms of EBITDA and you came in at $165 million. And yes, I mean, I would think that with auto plant starting up on May 18, yes, we should start to see some recovery there and what have you. Just the start of it is obviously a little bit eyeopening. And if I could just follow-up on the delay in the MDI splitter, you’re not operating in a vacuum here. Other companies obviously are pulling back CapEx. What are you seeing more broadly in terms of – or what are you expecting more broadly in terms of MDI capacity additions by others in the industry and where operating rates are, et cetera.

Peter Huntsman

I think that the operating rates as an industry, I can only imagine. I think they’re fairly close to our operating rates, that I mentioned earlier. And the operating rates that I gave you earlier, I kind of want to be clear on that, those are kind of April-ish sort of numbers. Those aren’t Q1 sort of numbers. And I would assume that the rest of the industry is operating around the same rate as us. But again, I don’t have any intelligence that would tell me anything different than that.

And what other companies are doing with operating rates and additions expansions and so forth. I only get what I only read and know what I read in the public press. But needless to say, if people are doing the same thing that we’re doing, not necessarily canceling projects, but pushing them back six, 12, 18 months and so forth, it’s probably a prudent thing to do in these sort of markets.

Prashant Juvekar

A lot of people are expecting China to show V-shaped recovery. I know you guys have pretty good intelligence on China. And based on your comments, it seems likely that – it seems that they have started up the plants, but the demand isn’t there. So what are you seeing in China at your plant and at your customers and all that?

Peter Huntsman

Well, I look at the business is kind of in two phases for us. And depending on the products and so forth, I mean mostly focused on Polyurethanes because that’s the lion’s share of our business in China. Think of something like 80-20, 75-25 sort of split of domestic versus export. Now that’s not an exact number because a lot of domestic people will take part of their product and export it and part of it’s used internally there. But as we look at the Chinese domestic markets, I think we said on our last call that we are seeing those markets recover. And we were uncertain as to how much of that was inventory restocking and how much of it was real economic recovery.

I think as we look now in those markets, we think that it’s mostly economic recovery. It’s more than just restocking. And so as I look at that 75% to 80% of our business and consumption in China, it’s tracking orders and consumption fairly close within a couple percentage points of where we were a year ago. As I look at the 20%, 25% of our business that is going downstream into export-oriented, thing is something like footwear. If you’re producing running shoes, you’re going to have – part of that is going to stay in the Chinese domestic market, a growing segment, great segment for us.

As you start looking at the export markets, though that’s going to be down 75%, 80%. So 20%, 25% of your business is just hit the wall. And that’s that that is exportable in your export segment. Your Chinese domestic business, which is one we’ve tried to focus on the last couple of years and really building a Chinese domestic where we’re producing in China, we’re selling in China. We’re marketing, product development, billing, customer service, everything takes place in China management all locals.

And as you look at that, the vast majority of that Chinese business, I think that domestic business is actually doing quite well. So what I would say is over the last quarter, what’s changed is, I think we’ve changed at least of saying that the Chinese business has gone from – restocking has gone from real economic, seems to be real economic vitality. We’ve seen about 4% growth in the Chinese business of our urethanes versus a year ago. And greater Asia, we’re seeing down 10% to 15% depending on the country and the margin, markets and so forth.

And so Asia all in all is about up 1%. As we look at the present demand as far as where we are right now, again, with China being the lion’s share of that. And this is probably too anecdotal to say, but I’ll say it anyway. As we kind of look around the three major markets around the world, China, Europe and the U.S., think of Europe being four to six weeks behind China. And think of the U.S. is being kind of four to six weeks behind Europe. You kind of think of when the lockdowns started, when the auto plants, aerospace, everything stopped.

And so as we look at China, we’re quite bullish about what we see. As we look at Europe, I think that we definitely are coming from the bottom or what we would consider to be the trough of this particular cycle, and we see a gradual rebuilding. As we look at the Americas, I think that we are at that trough, and I think in the coming weeks, not months, but weeks, you’ll start to see that pickup of automotive, aerospace and so forth as those products gradually come back into the market.

Again, as I said earlier, when we look at automotive as they come back to the market at 25% build rate, 50%, 75%, that’s yet to be seen. And that will be, I think the flywheel that will indicate by the end of the quarter just how strong and how solid of recovery do we have in North America.

Matthew Blair

Hey, good morning. Glad to hear everyone is safe and sound. It sounds like higher cost benzene is hurting you in Q2 even though you’ve reduced your inventories to low levels. Is there an opportunity to maybe store up on benzene, while it’s cheap now and enjoy some wider margins down the road?

Peter Huntsman

I think we’ve looked at that, again, I want to be absolutely clear. We are buying as of the beginning of April. I think we’re buying very low cost benzene. But again, you buy that in April, and by the time you move it through your inventory, it’s going to be the end of June, middle of June. By the time you start to see the economic benefit of that. Now where benzene goes from here? When I saw crude oil this past month at $10 a barrel for the first time in 20 years, I learned a lesson 20 years ago, never do invest in commodities.

I thought how much lower can crude oil go than $10 a barrel? And I thought about going long on crude oil, and the next day, I think it went down negative $50 a barrel. I think that we might look at some of those – some pre-purchasing on benzene, but in today’s world, we’re refining demand, crude consumption, driving patterns, the byproduct of aromatic production on the refining and on the chemical level, the number of people that are shifting from a light slate to a heavy slate in an ethylene cracker, the benzene, toluene, xylene production, economics improving to the side of the heavy consumer versus the light.

I mean, if I just add all that up, it tells me that we’re probably going to be well satisfied on the benzene side for probably the better part of this year, if not very well satisfied. So I’m not sure that that’s a place that we necessarily want to tie up a lot of capital. But again, it’s something that we look at on a fairly regular basis. And I would just remind you too that as we look at our North American Polyurethanes pricing to our customers of our commodity side of the business, we have about 30% of that that’s locked in on raw material pull through that moves with benzene, with natural gas. So some of that we – I’m not sure that hedging some of that – now we’re not getting into running the business, we’re really getting into financial instruments that I know absolutely nothing about.

Michael Sison

Hi. Good morning, guys. Happy birthday, Sean. Just one quick question. Peter, when you think about Polyurethanes, longer term, if demand comes back, hopefully over time, what do you think profitability or absolute EBITDA margins should get to at – when volume does come back?

Peter Huntsman

Well, I think that as volume comes back, again, what we want in our urethanes business, the nirvana for us, is consistency and reliability, reliability of operations and making sure that we can have a financial result there that is consistent. So if I look at our downstream end use MDI today, and I look at our margin last year at 27%, our margin this year, Q1 2020 at 29% and Q4 2019 was at 29%. So I mean, we’ve got – I think those downstream margins that consistent.

I think first and foremost, we need to make sure that we keep that. And the volume will come back. The volume is going to do what the volume is going to do. We’re not losing customers. We’re not losing applications. We continue to make headway and we continue to get into new applications and so forth. But if you consistently get a downstream business that has a high 20% EBITDA margin and you continue to build that business, that’s going to be our priority and that’s going to –I think quarter-by-quarter, I hope that we can continue to see that.

Hassan Ahmed

Just a quick one in the interest of time. You guys put out a really good sort of slide kind of showing us where we are today in terms of the portfolio relative to sort of past downturns and the like. I think one of the things, I guess it was there in the early part of the last decade, but now it seems to be a bit more acute. Is this a sort of extreme volatility in both sort of crude oil and crude oil derivative prices as well as nat gas and nat gas derivative prices. How are you guys feeling about the portfolio positioning relative to yesteryears in dealing with this sort of energy price volatility particularly on the Polyurethane side and particularly as you guys have gone further downstream on the Polyurethane side of things?

Peter Huntsman

Well, Hassan, that’s an excellent question. I think that as we look at the overall portfolio and we look at our consumption, I mean here we were just couple months ago, where we were tracking ethane pricing, a lot more the commodity chemicals and ethylene pricing and purchasers of propylene and so forth. Today our single largest raw material is benzene, which we buy about 200 million gallons a year. And then you drop way down, and I think it’s probably butane or maybe utility costs or something.

Our raw material, especially if you start looking into Advanced Materials and into some of our other divisions, that volatility of raw materials, yes, it’s there, and it’s something we track very carefully. But volumetrically, we’re just not saying – we’re just not being whipsawed like we would have been a couple of quarters ago. And as we look at benzene market, and our position in benzene in MDI, all of our competitors essentially by benzene. I don’t know if any of our competitors – I suppose Yantai has a coal to benzene and they’re producing benzene internally.

I don’t know how much and what the economics of that would be, but it’s not like all of our competitors are producing their own benzene, and we’re the only ones that are not. Everybody kind of starts at the same benzene price. Everyone kind of has – I won’t say they all have the same technology, but 70%, 80% of the MDI industry, I would imagine has a cost that is within 5% between the leader and the lagger for the top 75%, 80% of the producers. And so, again, I don’t want to brush off and say raw materials aren’t important, but I’m not sure that it’s going to impede us any more than with somebody else. And so the real question then is how are you managing the physical volumes of working capital and the impact that that has rather than the pricing side of that.

James Sheehan

Thanks. Good morning. Could you talk about the spray foam business and how demand for energy efficiency is likely to hold up with a lower oil price environment? And also regarding your proportion of the portfolio that consists of differentiated Polyurethanes, it’s still around 70%. When do you expect it to move higher? Is it after you integrate Icynene that that numbers moves up?

Peter Huntsman

Well, I mean, as we look at our spray foam business, you kind of look at on that 2019 sort of economic performance around $80 million, and as we kind of look at the synergies and so forth going forward. I think that we’re on track. A couple of things. I want to just lay the groundwork here. As we look at that, I think that we’re well on track, perhaps even a little ahead of track of seeing that business get to a $100 million sort of in EBITDA. Now as we look at the near-term on the spray foam, no doubt that we’ve seen about a 40%, 45% drop in our orders on the near-term. But longer term, people don’t – half of this business is new residential construction and a growing segment of this business more and more are states that are mandating insulation and energy conservation and building codes.

Here’s a unique situation where a chemical company is out lobbying for tougher building standards and tougher building codes, which is what exactly what we’re doing. So as we look longer term, I think that you’re going to continue to see a focus around energy conservation. As you look at utility costs by and large and the taxation that are on those utility costs and so forth, there’s just not a lot of – especially in North America and Europe, where a lot of people are heating or cooling a building based on a raw material that’s dependent on crude oil. Most of it’s all natural gas. That natural gas price hasn’t really moved a great deal in the last decade.

I think you’re still going to see that push for energy conservation. I think you’re going to continue to see longer term growth in that industry. And I think that as you say, longer term what we’re doing and being able to consume a 1 billion PET bottles, and that will be increasing this year as the second plant comes on in Taiwan, upwards of the equivalency of 1.5 billion PET bottles to make an insulation that’s conserving CO2. It’s a great story to be told. And it’s one that we want to market very aggressively as we go through 2020 because we see a lot of growth that will be taking place there.

Arun Viswanathan

Great. Thanks. Good morning. Thanks for sticking around, and thanks for everything you’re doing on COVID. So yes, I guess I just wanted to ask real quickly on the differentiated side. You guys had made a push to grow downstream in the last couple years. I guess when you look at the margins going forward, are you getting any indication from your customers that there’s any substitution away from maybe more value-added materials, would you expect that, I guess, in the future? And if so, would that be – how would that impact your business? Thanks.

Peter Huntsman

No. I think Arun, great question. I think to the contrary, we’re seeing just the opposite. If I look at the industry in – a tilt in the industry, yes, we’re no doubt facing headwinds in the aerospace, in the lightweighting of aerospace. But longer term, planes are going to be lighter, they’re going to be flying longer, and they’re going to be more efficient. Automobiles, and the lightweighting that’s taking place in automobiles and so forth.

What’s taking place with adhesives and coatings and insulation, building materials to the contrary, I think that we have an excellent opportunity. About half of our growth takes place in our downstream businesses from GDP growth, and about half of it takes place of us going out and replacing someone else’s product and someone else’s technology and product that goes into those downstream applications. And if anything I would hope that that would accelerate.

And as we look at this opportunity downstream, I’m not hearing anything from our customers. I think that from a corporate point of view, look, we’re in an excellent position to continue to feed that downstream growth. We have a strong balance sheet, got cash on that balance sheet. And while we’re slowing some of our CapEx projects, we are not going to starve this business. We are going to continue to feed that. We have the balance sheet. We have the cash to be able to do so.

And perhaps at a time when others are going to be pulling in their horns, we’re going to be out aggressively pushing into those new markets and those new applications. So if anything in the coming month or so, I hope that we’re growing our business, our downstream business in particular, disproportionate to overall GDP growth and accelerating beyond that. No reason why we shouldn’t. We certainly have all the balance sheet, the product, people, technology to be able to do that.

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