Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Allison Transmission's Third Quarter 2013 Earnings Conference Call. My name is Jen, and I will be your conference operator today. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] I would now like to turn the conference call over to Dave Graziosi, the company's Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you, operator. Good afternoon, and thank you for joining us for our third quarter 2013 results conference call. With me this afternoon is Larry Dewey, Allison Transmission's Chairman, President and Chief Executive Officer. As a reminder, this conference call, webcast and the presentation we are using this afternoon are available on the Investor Relations section of our website, allisontransmission.com. A replay of this call will be available through November 4. As shown on Page 2 of the presentation, many of our remarks today contain forward-looking statements based on current expectations. These forward-looking statements are subject to known and unknown risks, including those set forth in our third quarter 2013 results press release and our annual report on Form 10-K for the year ended December 31, 2012 and the uncertainties and other factors, as well as general economic conditions. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove incorrect, actual results may vary materially from those we express today. In addition, as noted on Page 3 of the presentation, some of our remarks today contain non-GAAP financial measures as defined by the SEC. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures attached as an appendix to the presentation and to our third quarter 2013 results press release, both of which are posted on the Investor Relations section of our website. Today's call is set to end at 5:30 Eastern Time. [Operator Instructions] Now I'll turn the call over to Larry Dewey.

Thank you, Dave. Good afternoon, and thank you for joining us today. In the third quarter, Allison continued to demonstrate strong operating margins and cash flow by executing initiatives to proactively align costs and programs across our business with end market demand conditions while investing in growth opportunities. Although near-term economic uncertainties persist in our markets, we are encouraged by the growth we have experienced in the North American On-Highway end market, our largest. In addition, consistent with Allison's prudent approach to capital structure management, we reduced the applicable borrowing margin of our Senior Secured Credit Facility Term B-3 Loan due in 2019 and repaid $78 million of debt. Finally, highlighting our commitment to the return of capital to Allison shareholders, we completed a $100 million share repurchase and paid a quarterly dividend of $0.12 per share. Please turn to Slide 4 of the presentation for the call agenda. On today's call, I'll provide you with an overview of our third quarter performance, including sales by end market. Dave will review the third quarter financial performance, including adjusted EBITDA and adjusted free cash flow. I'll wrap up the prepared comments with our full year 2013 guidance update prior to Q&A. Please turn to Slide 5 of the presentation for the Q3 2013 performance summary. Net sales decreased approximately 6% from the same period in 2012, principally driven by previously contemplated reductions in U.S. defense spending, lower demand in the North America energy sector's hydraulic fracturing market, fewer sales of North America hybrid-propulsion systems for transit buses and continued weakness in the Outside North America Off-Highway mining sector end market. Partially offsetting these declines were strength in the North America On-Highway end market and the Service Parts, Support Equipment & Other end market. Gross margin for the quarter was 44.2%, a…

Thank you, Larry. Please turn to Slide 7 of the presentation for the Q3 2013 financial performance summary. Given Larry's comments, I'll focus on other income statement line items and adjusted EBITDA. Selling, general and administrative expenses decreased $23 million from the same period in 2012. The decrease was principally driven by $12 million of lower intangible asset amortization, reduced global commercial spending activities, favorable product warranty expense and a warranty expense reduction for the dual power inverter module or DPIM extended coverage program, partially offset by higher employee stock compensation expense. The DPIM warranty expense reduction is attributable to favorable claims experience with the DPIM replacement introduced in late 2008. Engineering, research and development expenses decreased $50 million from the same period in 2012, principally driven by the previously noted technology-related license expenses of $12 million in 2012 and reduced product initiative spending. Interest net decreased $3 million from the same period in 2012, principally driven by lower amortization of preferred financing charges, lower interest expense as a result of debt repayments, a lower interest expense related to our interest rate swaps, partially offset by higher interest rates on our senior secured credit facility. Other expense net was essentially flat with the same period in 2012, principally driven by the impairment of technology-related investments in 2012, partially offset by higher unfavorable foreign exchange and decreased grant program income. Income tax expense for the third quarter of 2012 -- I'm sorry, 2013 was $28 million, resulting in effective tax rate of 38.5% versus an effective tax rate of 34.6% for the same period in 2012. The change in effective tax rate was principally driven by decreased discrete activity. Adjusted EBITDA for the quarter was $162 million or 34.7% of net sales compared to $160 million or 32.3% of net sales for the same period in 2012. Excluding the $12 million of technology-related license expenses, adjusted EBITDA for the third quarter of 2012 was $172 million or 34.8% of net sales. The decrease in adjusted EBITDA, excluding technology-related license expenses from the same period in 2012, was principally driven by decreased net sales, partially offset by reduced global and product initiatives spending. Allison's adjusted EBITDA margin performance continues to demonstrate our capability and commitment to delivering strong operating margins during periods of slower demand by executing initiatives to aggressively align costs and programs across our business while supporting growth activities. Please turn to Slide 8 of the presentation for the Q3 2012 cash flow performance summary. In view of Larry's comments, I'll focus on specific cash flow activity during the third quarter. Consistent with prior quarters, Allison continued to demonstrate a solid free cash flow conversion rate despite challenging global Off-Highway and Defense end market demand conditions. Finally, Allison ended the quarter with $152 million of cash, $386 million of revolver availability after letters of credit and net leverage of 4.26. Now I'll turn the call over to Larry Dewey.

Thanks, Dave. Please turn to Slide 9 of the presentation for the full year 2013 guidance update. Our updated full year 2013 guidance includes adjusted EBITDA, excluding technology-related license expenses, in the range of $630 million to $640 million and adjusted free cash flow in the range of $340 million to $360 million. We expect to achieve these levels on revised net sales for full year 2013 in the range of $1,920,000,000 to $1,935,000,000, implying an adjusted EBITDA margin, excluding technology-related license expenses, in the range of 32.75% to 33.25%. Despite ongoing challenges in global macroeconomic conditions and their resulting impact on end market dynamics, our updated guidance is within the range as provided last quarter on all metrics. In the fourth quarter of 2013, we expect net sales to stabilize on a year-over-year basis, an improvement relative to the sales declines experienced through the first 3 quarters of the year. We continued to anticipate improving trends in the fourth quarter of 2013, which we expect to be driven by growth in global On-Highway and Service Parts, Support Equipment & Other end markets and abating year-over-year declines in the North America Off-Highway and North America Hybrid-Propulsion Systems for Transit Bus end markets. During the fourth quarter of 2013, as we have done through the first 3 quarters of the year, we will focus on delivering our adjusted EBITDA, excluding technology-related license expenses and adjusted free cash flow commitments through the execution of initiatives that align costs and programs across our business with end markets demand conditions. Finally, we are updating our full year 2013 guidance for capital expenditures to a range of $75 million to $80 million and cash income taxes to a range of $8 million to $12 million. Thank you for time this afternoon. Jen, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Ann Duignan with JPMorgan. Ann P. Duignan - JP Morgan Chase & Co, Research Division: I guess, I wanted to start with your parts business. It was up 10%. And you noted that, that was demand for North America Highway and Off-Highway Service Parts. Could you just give us a little bit more color on what's going on there? Particularly, I guess, I'm just wondering, the Off-Highway side, are you beginning to see the aftermarket pickup on the frac-ing?

Well, what we've seen there and it isn't a frac-ing space, but what we've seen is several -- and we tracked it down because it was a step-up. We've seen some proactive rebuilt programs. We've talked about that thematically, I think, in previous calls, but now we're starting to see the tangible manifestation of that. And those programs, the ones that they're currently working on, are running through the end of '13 and into early '14. Obviously, we'll be watching that very closely because, as we have talked about previously, that could be the precursor to some activity relative to new rig build. But that's what's going on there. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Okay, that's helpful. And when transmissions get rebuilt or whatever they're going to do with them, remanufactured, would you expect a shorter life cycle for the rebuilt products? Or what kind of hours are we looking at before they have to replace?

Well, there's what we -- and it's really not as clean as this, but we'll talk about minor overhauls and major overhauls. And there's, frankly, a pretty sizable difference in the kit that's used for either of those. And there's a cadence to how they consume the transmission. This would appear to be the first or what we would call a minor overhaul. They certainly wouldn't get the kind of life until they reach the next point for a major overhaul, maybe anywhere from 60% to 80% to the next point, which is really determined by the long pole in the tent, the next set of constraint components as they operate the transmission. Ann P. Duignan - JP Morgan Chase & Co, Research Division: So we're still looking at a fair length of time before they'd be ordering new transmissions for the same...

For that particular rig, yes. But what you have is they wouldn't be putting that money in unless there's some level of utilization and we continue to watch that very closely. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Yes, for sure. And then I just wanted to circle back on a different topic and that's your reduction in global product -- development and product innovation. Did I pick that up correctly? And I appreciate that you have always been very good at cutting costs in a downturn, but should we be at all concerned that this could come back and haunt you in 2 or 3 years when the markets improve?

We don't believe so. We had -- as I indicated in some previous calls, we had more fundamental product architectures under development than at any point in our history. And we still have several under development there in the -- what we call a proof of concept phase. We just have -- instead of all of them under development, we're actually launching some, whether it's the TC10 or the H3000. And so that spend comes off in terms of the development expense. Now, clearly, you have ongoing support for the products, but that's at a very different level. And so now we're to the cadence that we said we wanted to get to. We've got some products in. We've got stuff in the concept development activity. In fact, I'm personally meeting with our -- some of our key folks of the product development space to start cadencing out. And we're looking out at a cadence that goes out for a decade as to what's -- how do we want to look and stage this so that we've got stuff coming out of the pipeline and stuff going into the pipeline and in what cadence.

Our next question comes from the line of Ross Gilardi with Bank of America.

I just had some questions on international, On-Highway. I'm just -- what do you guys think it's going to take to see some acceleration there? I mean, is it just the external environment or are there other things holding demand back? I did notice that in your outlook statement, you mentioned that you expect global On-Highway to be up, I think, in the fourth quarter. But clearly, the international market is where the real penetration opportunity seems to be. So if you could just talk a little bit about that, that would be helpful.

Yes, I think a couple of things. Certainly, some of the macroeconomics haven't helped some of the confidence of the buyers. But as we've talked about, it's really the simplest level, 3 steps you have to go through. One is you got to secure the release of the OEM, that is, the product has to be engineered in so that it's available for sale. Second thing is you try to make sure that it's properly promoted by the OEM, whether that's the option pricing, whether it's training their salespeople such that they understand the products so that they're prepared to speak about the benefits to potential end users and then sell the end user. And as we're in kind of the first steps on developing some of these markets, as evidenced by some of the market penetration, we're spending a lot of time and a lot of resource on getting releases with the OEMs, whether it's in various vocations. We talked about, I think in the past, the China model kind of vocation-by-vocation, how we've stepped through that. We're replicating that across every region. And so we track the releases and then do a lot of work with the OEMs to help promote the release. And, of course, we are working with the end users. But it's really -- it's a concept sell. It's a question of getting people to test or buy a few because no one will make their entire fleet purchase. So very often, as you are penetrating a market, your volumes are very low. A guy might buy 10 trucks, 20 trucks. He might try 2 with a different significant technology such as our transmission represents out of the 10 or 20. So when you look at it, it's -- while it's significant in terms of we now have the opportunity to prove to him the value of the product, it's not yet significant in terms of the volumes. And that's kind of the phase we're in right now. We do track that, we do know the conquest customers and we follow their product experience. We feel good about where we're at, but it is an arithmetic progression in terms of their purchases based on the confidence level they generate.

Okay. And then you talked about the macro not helping. Can you just give a little more color on what you're seeing in some of the key emerging markets and Europe as well or things getting better, worse, moving sideways?

Well, I think if you take a look at Europe, we think about it in terms of bus, you've got probably some of the weakest areas where we've been very strong. I'd have to add a note. But the U.K. and Ireland, where we've had a very strong presence, they're struggling. Western Europe, our presence hasn't been as strong, but clearly, they're struggling. The bright spots for us have been Turkey and Russia, as we -- those markets. Truck, we've seen a little bit of that Euro 6 transition pre-buy. That certainly provided some lift, but over time, that will all even out. When you look at China bus, we've seen some growth, although early in the year, a lot of people push their tenders out. They had their tenders out, we won the tenders and what would have been supply throughout the year has been pushed out to where, now, we've got certainly a busy fourth quarter, I guess, I would say, at completing some of those, as they've laid the schedules in. Truck, we've seen some nice recovery in terminal tractors there, but we've seen the weakness in mining, as you've heard from a lot of folks in the global mining sector. So those are probably some of the highlights that we've seen.

Our next question comes from the line of Jerry Revich with Goldman Sachs.

I'm wondering if you gentlemen can talk about how we should be thinking about SG&A and R&D as a percent of sales heading into next year. As you pointed out, you've cut out some of the SG&A expenses over the past couple of quarters. And obviously, R&D ramp is coming out -- coming down after the product cycle that you mentioned. Any sort of high-level thoughts on the, I guess, recurring SG&A and R&D levels heading into 2014 versus what we saw this year?

Sure, Jerry. It's Dave. Yes, in terms of '14, obviously premature as we're not providing guidance at this point on '14. I would say, thematically, as Larry talked to the R&D line, certainly, we continue to run down a path of completing certain programs, at least bringing them to a point of production. There will be some commitments that carry past that but certainly not at the levels that we had been over the last few years. Having said that, there are some other technologies that we're continuing to work on and line up in a cadence that Larry mentioned as well. So that's in the mix, but certainly, there are some expectations. You'll see R&D tail off a little bit. SG&A, we certainly have taken steps this year to contain costs and reprioritize across all functions. In addition, we've also, this year, converted incentive comp, if you will, to more of a variable piece of our overall expense load. So as you think about next year in terms of targets getting set, et cetera, we'll need to look at that versus this year. So that's certainly a piece of it. The other thing that we are focused on is around the cost of people, whether it's overall salaries, benefits, et cetera, which I won't belabor the point on benefits, but certainly, those numbers are not going in the direction we'd like them to. So there is some level of inflation that's embedded there. So we're working hard to keeping an eye on that in very early stages of pulling our thoughts together relative to '14 and staying close to the market more importantly in terms of demand and, frankly, lining our expense up as best we can with what the market is presenting in terms of opportunities.

Okay. And, Dave, from a capital deployment standpoint, this year, it looks like you're going to be roughly 50-50 between debt paydown and cash returned to shareholders. Is that the right way to think about capital deployment going forward? I know you have another buyback in the books, but conceptually, how should we think about it?

Obviously, we finished the quarter, as we talked about, with a fair bit of cash on the balance sheet. That being said, as we've talked before, our near-term targets and medium-term targets in terms of leverage, we've talked through as well and we continue to be focused on that. So I think we'll evaluate before the quarter is over where we would like to deploy that cash. So I think the overall concept is we continue to work towards those leverage targets, at the same time, very -- remaining keenly focused on returning capital to shareholders. And beyond that, I think we'll let the quarter itself play out and I'd get into more discussion on '14 when we provide guidance at that stage.

Our next question comes from the line of Adam (sic) [Andy] Kaplowitz of Barclays.

So can you talk about -- maybe just give us a little more color, Larry, on the non-North American Off-Highway business. It dropped pretty significantly sequentially. And I think China energy was offsetting mining, if I'm not mistaken, in the quarter before. Did that just fall off or is it timing-related? And is this the sort of new run rate we should be modeling?

Sure. Yes, and you've hit on the key issue. It really is a tale of 2 different end markets. We're about 65%. We're talking now international or Outside North America Off-Highway. Tale of 2 different end markets. 65% of the revenues come from oil and gas drilling, equipment in China, and the remaining 35% comes from mining trucks. And that's about a 60-40 split. I mean, there's a little bit in Latin America, but think of it -- the mining is 60-40, Europe, China. And certainly, the China oil and gas, the frac-ing equipment is having a strong year. We're up about 100% versus prior year. And that's that push that we've made. Now we'd be the first one to say that's going to stabilize a little bit while they're running that equipment and then we'll look for the next step-up. But certainly, that's been a real positive for us. We've got some nice developments, although not a ton of volume but in terms of the release activity in some of the engineering work we're doing for oil and gas in Latin America, but that hasn't yet manifested itself in any significant orders. If you look at mining in Europe, in China, there's no question, it's soft. We're down about 50%. We're about half of where we were in prior year. So that's kind of the shakeout of those 2 significant pieces.

Larry, does that mean it was just a low release quarter in 3Q in China energy? Is that the way to think about it?

No. As we talked about, we have the Q2 results. We talked about a heavy amount of activity for China. We also talked about the fact that, that is not something we suggest extrapolating on a near-term basis simply because, to Larry's point, you're just equipping fleets and, frankly, they are thinking and working towards some level of conclusion around sustainability and what those rates need to be, utilization, experience with the equipment. So we did not see that as near-term sustainable. That being said, we certainly feel and I think others have stated the same thing, that, that market, over the longer term, is a significant opportunity in terms of volume and timing. So we're staying close to that. We're very engaged in the market, but it's -- the real change on Q2 versus Q3 is driven off of that lower level of energy, frankly, getting back to more of a sustainable level near-term.

Okay, that's helpful, guys. If I go back to your sort of core North American On-Highway market, medium duty to us looked quite good in the quarter and Class 8 straight was maybe a little bit more lethargic. Is that what you guys saw? And then you guys usually have pretty good visibility from your suppliers, maybe -- I'm sorry, from the OEMs, like 3 to 6 months. What are they telling you? Have they been sort of changing their production or are they pretty stable in what they see going forward?

I'm smiling here because -- this is Larry, because it's really been bouncing around. We've received letters saying we're taking our line rates down and then in the next EDI, we get an increase. So it's really -- I think I used the term maybe several calls ago, VUCA, volatile, uncertain, complex and ambiguous. And I'm dusting it off because we're certainly seeing a lot of that. Variation between OEMs and variation even from OEM -- within an OEM month-to-month and across the different parts -- end markets maybe is a way to say it that they serve. Having said that, if you take a look at the Q3 -- our Q3 volume versus the ACT production data and that's -- they do sometimes refine those numbers well after the quarter, so we offer that as a caution here. But we fundamentally track -- virtually track the 4 through 7 they had. I think there's a percent or so, a couple of percent maybe difference. And in the Class 8 straight truck, sleeper and day cab, that was lethargic. And our 4000 Series volume that goes into that space is up about 10%, which we'll obviously be digging into some of the specifics to make sure we understand it. But we have been putting a lot of effort in increasing our North America Class 8 straight truck market share. That's been the primary focus of Heidi Schutte and her field organization. So it would appear on -- at first cut that, that's starting to bear fruit, but we don't consider the fish caught until we've got it cooking on the grill. So we want to make sure that we're understanding that data.

Our next question comes from the line of Jamie Cook with Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: Most of my questions have been answered, but just 2. I think on the SG&A side, you called out that some warranty helped you out in the quarter. So could you just give us some color, how much of that actually helped you in the quarter? And then, I guess, my second question, Larry, just because you tend to be, I feel like, more conservator on with sort of your outlooks, how do you -- I mean, some of the industry forecasters like ACT have come out and given their initial outlooks for sort of 2014, most of them calling for sort of low-teen just type growth. How are you feeling about the markets next year just based on some of the conversations you're actually having with your customers?

All right, relative to the markets, we're certainly talking -- we use a number of sources. We use the industry sources, whether it's ACT, FTR, obviously, other sources outside of North America that we use, where they're not a player in terms of the industry data. We talk to the OEMs. We have direct connectivity with the large fleets. So we understand like what lease rental they're going to do, what the refuse guys are going to do, some of the other large fleets. I would say, right now, this shouldn't be shocking, you probably heard this from a lot of folks, there's a clear consensus that it's going to get better. And then from there, the consensus breaks down, whether it's by end market or by sectoring. I heard some today, people were saying, when you think about single home construction, you've got to understand, have a little perspective here, while it's up and it's improving, it's at the level that it was in the 1982 recession, which would suggest it's got a fair amount of distance to come back. One of the other things that we have been trying to understand is what impact on new vehicle purchase has the increasing use of GPS-type systems done in terms of making the number of vehicles that are there more efficient. And we think those changes have gone into the market, largely been digested, but maybe not completely. And then that will stabilize and then the recovery will occur from that point. Because once they've gotten those level of efficiencies, there's no -- it's difficult to wring more out once you've optimized the routes. So there's a number of things going on. We certainly feel better. And I would tell you, in terms of managing the Allison organization, this is a great team for reaching. And so when we lay out -- we talked a little bit earlier about the cost profile, a question came in. We tend to look at a range of estimates on the revenue side. We address our initiatives. We have a fairly structured process at which we identify what's in the plan and what's out of the plan. And we know that should things improve faster than what we have built in as the baseline plan, what we can respond with in terms of what we need to do to get those volumes and then what we can then afford as an organization in terms of additional value-creating initiatives. So we're better at reaching up and cutting down and we are mindful of that as we go into any budget cycle. Jamie L. Cook - Crédit Suisse AG, Research Division: And then just, sorry, the warranty in the quarter, how much of the SG&A?

Sure. The adjustment in terms of -- if you look at prior experience related to the DPIM, so it's somewhere between $2 million and $3 million. The regular warranty, if you will, is in that $2 million range.

Our next question comes from the line of David Leiker with Robert W. Baird. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Two questions. One, first of all, can you give us a little bit of color behind the estimate, the sales estimate reduction that's $15 million or so midpoint-to-midpoint. It sounds like most of that is going to be in the international side of the business, but any color you have there?

Yes, in terms of the overall guidance, if you just look at Q3 results and then where we sit today in terms of consensus, frankly, half of the variance, if you will, from consensus for Q3 was around North America On-Highway. To Larry's earlier comments, in terms of the level of activity that we were seeing, certainly, a bit more moderated than we were expecting. I think the preliminary view in terms of fourth quarter, October looks to be a relatively solid month with -- versus our expectations. So we feel good about where that is. The balance of it is really bits and pieces between the timing of some Outside North America tenders that have been moved into the fourth quarter. We mentioned that as well. The other piece is some timing on the defense wheeled business and where that comes in, in the fourth quarter. So some of that is shifting around, but overall, I think the changes, given the macro issues that we've gone through. And then setting up for '14, as we recall this time last year, a much different setup coming into '13. So whether you're looking at inventory levels or, frankly, changes that we're hearing from OEMs in terms of production schedules going into the second half or the fourth quarter is certainly a different tone than it was this time last year.

Yes, this is Larry, tying back into the earlier question as well. We think that while it's maybe not as smooth as we'd like to see, there's no question that we've turned the corner here barring some external event, I'll call it. But we think we turned the corner in the North America On-Highway market. If you look Q2, we were up 15% sequentially versus Q1 2013. Now Q3 was kind of flat to that Q2 from a sequential standpoint, but nonetheless, we're still up year-over-year. So you can look and parse the data as you do, but we certainly feel -- the only question is how much, how fast. That's what we're trying to figure out in terms of how we set our plan up. But there's no question, it's moving in the right direction. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then on some of these new vehicle releases that you've had recently, I don't think you've answered this part of it specifically, but what are you seeing there in terms of take rates at the actual buyer of the truck? Are those coming through where you expect them to be? Or just any color on that.

Yes. In fact, as we have laid into the plans, most of the new releases are generating. China truck, maybe some struggles there on some of the new releases in terms of -- but it's relatively low number of units. I think we're getting the releases, we're getting the buys, but the number of units per buy is probably just a little bit light. But fundamentally, that's tracking pretty well. Europe, in some of their releases, is going very well. Russia has been a very pleasant surprise. Latin America is tracking well. I think the one issue there is Argentina is delayed. And this really wasn't tied to releases. It was tied to the engine emission regimes. They've delayed the implementation of the regime there. India, certainly, the military vehicles that we talked about has been going very well. We're very pleased with that. And we're -- I think from where we sit, China truck overall is up. I think some of the new releases are starting to catch up, but they were a little slower year-to-date than probably what we have laid in the plan and we're catching up.

And then you look at where those take rates are and we are seeing the strength. What type of transmission is that replacing? Is that a manual transmission?

In virtually every case, it's a manual in those markets where we're securing the releases. David Leiker - Robert W. Baird & Co. Incorporated, Research Division: And then the last item, Dave, we talked about the engineering number a little bit earlier. Where are you in terms of the next product cycle that might take you from this $80 million kind of run rate that you're at in this quarter or that might need to ramp up again? Is that 6 months out, 12, 24 months?

I would say it's certainly post-12 months, probably closer to 24. I mean, we are -- to Larry's point, we have, frankly, to spend a bit more time looking at that. We've had a record amount of activity underway. We need to digest that and get those products into marketplace and reconvene, frankly, in terms of prioritization and opportunities. And it's out there a bit.

And with the cadence that we're working on the team, I mean, my vision is, as we get to a regular cadence -- just a couple of reasons for that. Number one is to continue to drive the technology and the market to increase the value proposition Allison represents. Number two, to continue to raise the bar on the competition. And with our results and the capability of our folks in the technical space, to continue to pressure others in that space in a pro-competitive way. And then the third thing is, if we're on a regular cadence, you should see less variation. You shouldn't see this feast or famine. You should see kind of a regular kind of a cadence, more in line with the kind of numbers that we're running today. That would be the expectation. Will it vary some? Yes. But, I mean, you're talking 5%, 10%, not 25%, 30%.

[Operator Instructions] Our next question comes from the line of Ian Zaffino with Oppenheimer. Ian A. Zaffino - Oppenheimer & Co. Inc., Research Division: Just really quickly, the 50% down you said on the mining side, is that baseline or is there some type of de-stocking or inventory changes there or that's just kind of what the mines are doing right now?

I think in a couple of things that are going on, I mean, we are channel-checked with Tellus. There is a fair bit of inventory that's out there that's available. So I think there's been a bit of a reckoning, if you will, going into the second half with adjustments that are being made. And you can -- you've seen the impact of that. So, again, I think it's early to start focusing on 2012 and more digesting the comments from other companies in this reporting season to get a feel for that. But it's certainly that number. When you look at it year-over-year from mining, it's pretty significant. So we'll continue to keep a close eye on that going into next year and, obviously, supplement that with, again, our channel checks as our teams are traveling and reconvening with OEMs, as well as end users.

Just a point of clarification on that. The inventory that I think Dave is speaking to is in the form, in most cases, of equipment that's built in terms of vehicles. One of the things about our practice relative to handling orders is we don't have a firm 6-month take-or-pay kind of a process. Now the downside is, when there is a downturn, we tend to get a lot of the orders get modified relatively near-term. But we think that keeps us closer to the market and allows us to react faster. And, again, recall that in the Off-Highway space, we assemble and test the product. All of the components are produced by suppliers, so -- or under our design direction, of course, but are produced. And so we've got a pretty variable model there. And so we think that by being able to react quickly to the market, both in the downturn and the upturn, we avoid a lot of what I'll call lag cost. And so when the market does turn, we're that much closer to it coming out as well. Some other people don't have policies like that and so the channel gets stopped as a result of their contractual terms. And I'm sure there are some folks in a frothy environment that maybe buy some -- a few transmissions out ahead, but as a general rule, that's not something that our contract terms cause.

Our next question comes from the line of Rob Wertheimer with Vertical Research Partners.

Just wanted to ask a couple of product questions. I believe Volvo mentioned the I-Shift penetration has gotten up to 60% or so. I don't know their in-town versus their On-Highway mix, but that would seem to be encroaching a little bit in the in-town side. You mentioned, I think, some success that you thought you're having. Have you seen the AMTs of any sort winning against you in any deals in town?

The Volvo product is -- for the most part, goes after what I'll call line-haul or short-haul as opposed to straight trucks. So, no, they haven't done much of anything in the vocational space, which is what we referred to as straight trucks. Nonetheless, they have, as a result of the way they've placed that product, that's an in-house product and so they advantage it in their data book. What they're displacing is, essentially, their manuals. And what it -- from a business strategy standpoint -- again, I don't sit in their strategy rooms, but I would presume that, A, it addresses some of the driver skill issue that in reality is occurring. It's easier to drive an automated, whether it's an automatic or an automated manual transmission, than it is a manual. And it allows them to bundle more content and get a little more option price on it. But it has to be very heavily integrated, which is why it's only on their vehicles.

Perfect. Actually, I don't know if I know the number. Have you given your mix of in Class 8 straight trucks versus day cab? And then my second question would just be an update on TC10, whether you can get any other OEMs and how things are going.

Well, we certainly have -- relative -- we don't share the one split that you're referring to. Obviously, as we continue to penetrate, that will be something that we watch. I think we've shared that in the current short-haul market, we run between 3% and 5%. Frankly, we've made a couple of percentage point gains if you look at the data on that using our existing products. And, again, I think that is a testament to the value of automaticity and some of the things we've done for product positioning. TC10, obviously, Navistar has made the announcement. We talked about that in concert with them and had our announcement as well. We're in dialogue with other OEMs. Clearly, as fleets have indicated interest in the product, that will be the thing that probably prompts other OEMs to look at their engineering activity and see where it fits into a cadence.

And so you're waiting for material orders to come in to kick it and you haven't had that, I guess?

Well, we certainly have dialogue. If you look, I think it's probably -- well, since -- I think they do it publicly. There's an OEM that's been having demonstrations with one of their trucks equipped with TC10, getting a lot of reaction. There is one in, I think, Denton, Texas, that was held recently, that -- where they brought in some fleets, the OEM did. And so there is activity going on. At this point in time, there have been no firm production plans beyond Navistar announced. And we try to wait for the OEMs to announce that and then we do it in concert with them.

Ladies and gentlemen, I would now like to turn the call back to Mr. Dewey for closing remarks.

Thanks, everyone, again, for your time today. As you can see from the results, we continue to focus on fundamentals for our business, with a clear emphasis on generating cash. I'd like to, again, thank you for your time today and wish all of you a happy and safe holiday season over the coming weeks and months, to you and yours. We look forward to the fourth quarter call in a few months.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.