WWD
#Well, I think what ---+ just on the order trends, we have good confidence in the full-year.
We just happened to see some of the activities from various customers that's a little soft in first quarter.
I don't want to over-react to any of that, it's just kind of normal activity but we just wanted to call out that we expect a soft first quarter in our planning followed by a much stronger second through fourth quarter
Yes, it was actually both.
We did have strong Military.
We started to see some initial provisioning for the narrow-body programs, as anticipated.
Those would start to come in.
So we had good across-the-board activity in segments minus the bizjet market.
But the rest were all healthy and a lot of the work we've been doing on our margins has been coming through.
So, a strong, healthy quarter.
I think you're ---+ the ramp that you're referring to the initial provisioning, right.
Yes.
On the initial provisioning, it's little more complex than just a ratio of how many aircraft are out there.
The initial provisioning is usually tied to the number of new operators, the number of routes those operators are doing, the location of the routes.
So we have good formula that we use to estimate initial provisioning sales and then we work it hard with the airline customers so there's a number of factors that go in.
But, definitely, that they are starting and as they produce more per year that's going to translate to more operators, more new routes and that will be a positive for initial provisioning.
As I said earlier, it has started and as we move into 2017 and 2018, that will continue to grow.
No surprises.
I would not call them one-time charges.
I would made the comment that through the year, we were taking actions.
There were some of those in the quarter.
They weren't significant enough to call out separately but there was also costs related, predominantly, the costs were related to the start up associated with the new Fort Collins industrial facility.
So the combination of those two things.
Both were planned and so no surprises but they did bring down the earnings little more then you saw.
If you would put those back we were pretty much on the full-year rate.
Yes.
Well, as we saw, Oil and Gas was down vary significantly.
Transportation, which we lump in with CNG, and you also have Rail and Marine, was down again fairly substantially.
Our Renewables business was up, flat and Power Gen ---+ [did I say something] about Power Jet.
No.
Power Gen was also down but was improving as we hit the fourth quarter.
As you saw overall, the last two years have been tough on the top line for our Industrial segment.
No.
It really hasn't impacted us.
Hello.
We are still seeing some slight improvement.
And in terms ---+ one of our larger activities in China is the CNG truck market.
There has been a number of quarters, improvement in the spread between diesel and natural gas.
That seems to be taking hold.
We're seeing some initial signs and some order volume going in the right direction.
We're not sure how fast that will ramp but that has ---+ it looks like ---+ it looks promising that, that could be turning the corner.
A lot of our Other Equipment sales are still fairly flat.
We are seeing some aftermarket, so utilization is going on.
So we always looked at if equipment is being utilized after a period of time they start buying new as well.
So we're seeing utilization, aftermarket sales but we're still not seeing large improvements in the sales outlook at this time.
No.
That would not be the case.
What I would say ---+ we've try to highlight this for a while and hopefully you can see with the numbers that we put in the slide deck.
We have very good fleet dynamics or if you want to say the demographic of our fleet is quite good.
In terms of the installed base and the maintenance cycles that are going on, in particular around the A320, 777 and some of the other legacy products.
The second part of that is, I would say, is our aircraft turbine system group, and when you're on the engine that's a very good aftermarket part of the markets.
Meaning it generates a lot more demand for maintenance.
So the good fleet dynamics, the high intellectual property, proprietary products we have on the turbine side and the shop-visit rates that are going on, that's all activity we anticipated.
It's strong.
And as we launch these new platforms, including the small wide-bodies that are going out still in volume today, as well as the narrow-bodies, both those with initial provisioning, those dynamics is very good and we could see that continuing and we have a strong, healthy aftermarket.
Thank you.
No.
I think we've said for some time that the 20% was our long-term target.
We happened to achieve that here this year and we had an extremely strong fourth quarter.
And so I think some normal volatility.
And saying ---+ what we did say is we would either maintain those healthy margins or grow them slightly.
So I don't think there's anything new underlying any of that.
We continue to see very strong Aftermarket.
That will continue to grow and it's really nothing more than that.
Could be.
Yes.
That's what we're ---+ in terms of order volumes, you never know until you get through the quarter but the way it looks at the moment we could be down a little bit.
Yes.
25% on average.
Well, and I think if I recall, <UNK> was going back to 2015 because, perhaps, of the charge that we had in 2016.
So it would not be lower than the reported amount.
But when you look, $0.66 a year ago in 2015 and it was $0.40 this quarter because of the charge and we had an extremely low tax rate in the first quarter this year as well, because of the R&E credit.
It's too early to tell.
I don't believe it would be significantly lower than that.
All we're targeting is that current order volumes are showing a little bit different pattern that we saw last year this time.
The [H] (multiple speakers) ---+ the H is continuing to track the sales and orders that GE has announced and we're tracking with them.
It's progressing well.
Yes.
We definitely see it moving up as these new narrow-body programs start to ramp.
So if you look at the Airbus volume ramp rates that starts to ---+ as you get into 2018, 2019, FY18 FY19, you're going to start seeing those ramp up and that starts to help with that growth rate number.
Well, if the infrastructure investments take hold, that would be a positive if you go through where our control systems end up.
That's like our end Construction Equipment, Mining, Transportation, Power, Oil and Gas, all those have the potential to be markets that will benefit from the new administration's policies.
At this point we haven't taken a stance or an opinion on the growth rate associated with those but there's no doubt that those are favorable to our industrial segment and we're going to wait and see the policies and then once we know that we may have a better idea of the growth that could come from that.
No.
None.
I really can't comment on the rest of the supply chain.
That I don't know, but for Woodward we've had ---+ the narrow-body programs have an aggressive ramp rate.
They have had from the very beginning.
We've been working very closely with the engine customers as well as the airframers on ensuring that we are well positioned to deliver on those ramp rates.
And I'd say this is the best I've seen in my career of our customers working on production readiness, ramp rates, and making sure the supply chain is going to deliver.
So, I would give them kudos for that.
We are tracking well and we're confident that we can meet all the production rates that they are asking for.
So, I think we're in good shape.
We just need all the supply chain to be in good shape and the rates will track.
Yes.
From a standpoint of the JV itself, I'm not really able to report much on the point venture.
In terms of the structure, there are three programs, two of which are active and one of which is in development.
The GE90, the GEnx, which powers the 787 and the 747-8, and then the GE9X, which will be in the 777X.
That one is in development.
The structure is such that those three ---+ two programs that are active flow through joint ventures so we sell to the joint venture, joint venture sells to GE and to other aftermarket customers.
And then we share development on the GE9X engine and that flows through the joint venture as well.
So in the fourth-quarter you see the impact of, largely, the aftermarket sales offset by the development cost in that line on our reported results called the earnings from the JV.
Right.
The item you have to look (inaudible) at is ---+ we are on the H machine.
It's got good content for us and GE is ramping up.
So that's a positive to us.
But we also play across the entire industrial turbo-machinery market and a lot of the other [suppliers] in other parts of the market, are soft.
So, it's an offsetting one.
So there is no misalignment between our sales and our outlook and GE's.
It just happens to be the rest of the market is soft.
So when we talk about Power Gen, we're talking not only about gas turbines, about steam turbine powered generation, as well as reciprocating engine power generation.
So, we go across the whole portfolio.
In total power was soft but the H class is a bright spot in that market.
Year over year would be ---+ as you can look at our quarterly flow for this year, first quarter was down quite a bit.
As we've indicated, we really don't know how this recovery will pan out in terms of timing.
So, it's very difficult to tell whether it will be slightly down to flat to slightly up from the first quarter of this year.
Sure.
No.
We will continue to come down from that level as well.
So, yes, there's still a little hangover on capital projects related to all the new facilities and so forth.
So we will continue to decline in 2018 and beyond.
Okay.
Thank you again for everybody joining us today.
And for many of you, I know we will see you at our investor conference here later in December and I look forward to seeing you and talking to you at the time.
So, thanks for joining us today.
