Good morning. My name is Stephanie, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2013 Second Quarter Results Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Ken Lamb, Director, Investor Relations. Mr. Lamb, you may begin your conference.

Thank you, Stephanie. Good morning, and thank you all for joining us. We issued our earnings release this morning at approximately 8 AM Eastern Time. It's posted on our website, borgwarner.com, on our Investors homepage. A replay of today's conference call will be available through August 1. The dial number for the replay is (800) 585-8367. You'll need the conference ID, which is 10514936. The replay will also be available on our website. With regard to our IR calendar, we will be attending a number of conferences over the next few months. August 13, we'll be at the JPMorgan Auto Conference in New York. September 10, we'll be at the MainFirst Auto IAA Investor & Analyst Conference in Frankfurt, Germany. September 11, we will be at the RBC Capital Global Industrials Conference in Las Vegas. And on September 16, we'll be at the Morgan Stanley Global Autos & Industrials Conference in Laguna Beach, California. So before we begin, I need to inform you that during this call, we may make forward-looking statements, which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. Now moving on to our results, James Verrier, President and CEO, will comment on second quarter results and current industry trends. And then Ron Hundzinski, our CFO, will discuss the details of our operating results and also our outlook for the remainder of 2013. With that, I'll turn it over to James.

So thank you, Ken, and good day, to everybody. Today, I'm very pleased to review our second quarter results, as well as our second quarter accomplishments. First of all, I'd like to congratulate all of the BorgWarner employees on an excellent second quarter. Your efforts drove outstanding results in a challenging environment. So now let me talk about our results. Reported sales were $1.9 billion, which is up 3% from a year ago, excluding the impact of foreign currencies and dispositions made in the last 12 months. U.S. GAAP earnings were $1.50 per share, which is a new quarterly record for the company. Our reported operating income margin was 12.9%, which is also a new quarterly record, and represents outstanding performance by our operations. So despite low production levels in Europe for both light and commercial vehicles, our operational efficiency and cost controls enabled us to post a strong operating margin in these conditions. Let me talk a little bit about the Engine Group, where the second quarter sales were $1.3 billion, which is up 4% from a year ago after excluding the impact of foreign currencies and dispositions made during the last 12 months. Results were led by higher sales of turbochargers, EGR coolers and engine timing systems in China and also turbocharger sales in Brazil. In the Drivetrain Group, sales were just under $620 million, which is up 2% from the second quarter 2012 when we exclude foreign currencies. The Drivetrain results were driven by higher sales of all-wheel drive systems in North America and all-wheel drive systems and transmission components in Korea. As we look to the future, BorgWarner continues to invest for the long term. Capital spending continues to grow, and in the quarter, we spent about 5.7% of sales and we remain committed to supporting…

Thank you, James, and good day, everyone. Before I begin reviewing the financials, I'd like to put BorgWarner's performance into perspective relative to the industry. Global light vehicle production was up 3% in the second quarter compared with the same quarter last year. BorgWarner's reported sales were up 2% from a year ago. As James explained earlier, if we exclude the impact of foreign currencies and M&A activity in 2012, our sales in the quarter were up 3%. To get a clear picture of our performance relative to our markets, we need to review the light vehicle and commercial vehicle markets separately. First, let's take a closer look at the light vehicle market from a regional perspective. In Asia, which we define as China, Korea and Japan, light vehicle production was up 2%. Our light vehicle sales in Asia, excluding currency, were up 10%. In Europe, light vehicle production was up 1%. On-road vehicle sales, excluding currency in 2012 dispositions, were up 1%. In North America, light vehicle production was up 5%, our light vehicle sales growth in North America was up 3%, slightly below the market. Now let's review the commercial vehicle market. Commercial vehicle production was mixed in the quarter. Production was up in Brazil and China but lower in North America and Europe. As a result, our commercial vehicle and aftermarket sales were up about 1% in the quarter. So our typical outperformance of light vehicle market by 8 to 10 percentage points was intact in Asia in the second quarter. In Europe, our customer mix was weighted toward those customers who underperformed the overall market. Also, you may recall that our DCT business in Europe was exceptionally strong a year ago, making it a tough year-over-year comparison. Our performance relative to North American market continues to…

Thanks, Ron. Now let's move to the Q&A portion of the call. Stephanie, could you announce the Q&A procedure again?

[Operator Instructions] Your first question comes from the line of Rich Kwas with Wells Fargo Securities.

James, on the margin performance, very strong this quarter. Anything unique that helped the quarter? It sounded like a lot of those, productivity. But anything that you would call out as being abnormally good? And then with the guide for the back half of the year, it implies a stepdown in the margin, the overall margin. You get some -- you usually get some seasonal decline in Q3. But are you expecting anything changing on the mix front or in terms of the operating environment, the macro environment that is included in the guidance?

Yes, Rich. Let me address the first one, to start with. There was nothing really unique to our -- that unique. It was just solid performance, and I think significantly across all of our products and all of our segments of the business. I think that the teams around the world just did an outstanding job executing on good plans that we'd put together earlier in the year. So we acknowledge a lower growth environment. And it was just very, very solid execution, no unique things, which is terrific. And I would say, Rich, by and large, that performance, that strong performance is what we're continuing forward within the rest of the year. You're right. When you do comparables first half to second half, there's a little bit of a seasonality impact in Q3. And to some extent, Q4 as well, Rich, when you consider the holiday season at the end of the year. So that does factor in a little bit. And then there's a little bit in the second half of the year, there's a little bit of incremental spend promoting around R&D that factors in as well, which we feel good. Those are the main highlights, I think for me. I think your other question, Rich, about our view from the market side is nothing's really changed there. Our view in our biggest market, which is Europe, we were talking around that 3% reduction level '12 through '13. That's what we've seen consistently through the year, and that's what we're seeing as the rest of the year plays out. And I think as you look at the other regions of the world, no meaningful shift there. And from a mix perspective, Rich, in terms of whether that's diesel versus gas or platforms, nothing really meaningfully different from where we were when we talked in April. So hopefully, did that -- did I get all your questions, Rich?

Yes. And just a quick follow-up, Ron, on the Drivetrain margin. So pretty good performance this quarter. You called out still a focus there and room for improvement. But did this quarter's performance provide any more optimism for you about the state of the business and where it could go and make you feel better about where you need -- where you can go there? Any comments or color there would be helpful.

Okay. Rich, we've been very vocal this first half of the year about we wanting consistency and the absolute level of profitability in the Drivetrain Group. I like -- we like what we saw in the quarter, but the consistency is still a concern for us. It's still -- we're bouncing around too much for us. So I wouldn't add any more flavor around that other than the fact that we continue to do deep dives on this business unit and what I think we are very comfortable where we're going to go with this in the future.

Your next question comes from Brett Hoselton with KeyBanc Capital.

Just to follow on with Rich's question on the Drivetrain business. Do you have any specific longer-term targets? I think you had mentioned one last quarter, and it seems like you already exceeded that with this quarter's results. But do you have any specific longer-term targets? And then maybe more specifically, we're talking about the Drivetrain business, of course. And more specifically, what are your -- what's your strategy? What do you hope to change there specifically to allow you to maybe improve the consistency or improve the margins?

Yes. Brett, I think I would say this. First of all, we are encouraged and pleased with the direction of the business. If we go back a year or so to where we are now, it's certainly moved forward, and that's encouraging. So that's a good thing for us. We've not laid out a very, very specific target. We have said and we continue to say that we believe the Drivetrain business can be a double-digit margin business. We feel comfortable that we can get to there. In terms of what are we looking at kind of thing question, there's a couple of areas that I think are key to us. We talked in prior calls around the China growth, the DCT. And we see the good news in this quarter that we're starting to see that come on. But getting the next acceleration there is a good key part of the growth. Just like all of our products and all of our businesses, we always look to optimize our footprint around the world, and that's an area that we're paying good attention to. Because this is a growth business, the Drivetrain business we see is very strategic. That's a growth business. And as we drive that growth and accelerate that growth, we want to make sure we optimize our footprint to support that growth. So that's kind of a key area for us as well, Brett. So in a nutshell, we're pleased with where we're at in the direction. We're not where we want to be, but we're going to get there with primarily around those couple of key levers I just talked to you about.

And then just switching gears. New business backlog, it seems like as we kind of look into the fall, and I know you haven't calculated the numbers yet, Ken, but it seems like as we look into the fall, production net-net is kind of a tailwind, so it seems like that should be neutral to maybe a positive surprise. I'm kind of wondering. As you look at your bookings throughout the first part of this year, back half of last year, what kind of implications does that suggest for the backlog? It seems like the backlog should be fairly solid as we move into the back half of this year?

You're right, Brett. Ken is getting his calculator ready to do the real detailed analysis there over the next few months. But from a booking's perspective and business win perspective, we feel good. What we've seen has been good and strong for us as a company, certainly over the last 6 months. So that gives us a good comfort as we start to build the backlog. What we've seen roll off this year, Brett, has been pretty much what we'd expected, so that's a good encouraging sign. And as we look to the second half of this year, we're seeing the backlog assumptions and projections that we'd factored in seems to pretty much be playing out as we'd thought. So more and more to come, as you know, Brett, but we're feeling pretty good about where we're heading on the backlog.

Your next question comes from Ravi Shanker with Morgan Stanley.

If I can just ask on the top line. You highlighted 2 areas of weakness in EU and North America. Can you just talk about what the near-term outlook is like, especially in Europe? Do you think that your relative customer or your exposed customer performance normalizes versus the industry in the third quarter? And also in North America, given that you have a pretty high level of visibility into the out years, when do you think that inflection and demand for your high-tech products comes in?

Yes, Ravi. From a European point of view, the key point I'd point out is, things are playing out pretty much as we'd anticipated. I think this is all pretty much what we projected and what we thought would happen. And I think one of the things that we've talked about frequently is you will get quarterly variations in our growth versus the market, and this is probably a good example, where there can be some specific platform of vehicle mix that can work for you or against you, and this is a good example of that. But the fundamentals of our growth and our performance in Europe are still very much intact, and we're not concerned at all there. We're going to continue to see good adoptions of our technology for fuel economy and emissions, and we feel good there. Switching to North America, we talked to in the past about the adoption rates, and you saw pretty good evidence of that in the backlog that came out last year. We moved up the North American and the content in some aspects for the backlog. So when you look at turbocharger penetration as an example into North America, there's tremendous momentum around that, as just one example. So you're going to see that, and I don't think it's a single point inflection, Ravi. I think it's going to be a gradual evolution over a 2-, 3-, 4-, 5-year period. But we're seeing the trend going that way for sure.

Got it. So if I can just follow up on that. Do you expect that there will be outperformance versus the industry in the next couple of quarters or do you think it's a little more gradual?

Yes. I think it's going to play out pretty much as we'd expected, which -- we've talked about a reasonable level of outperformance in Europe for the year and it will vary quarter-to-quarter. But nothing really changing from where we were a quarter ago, Ravi.

Understood. And then just finally, if I can follow up on the margin commentary earlier in the Q&A. We [ph] an almost 13% margin this quarter with Europe still very weak. Where do you think your margins can eventually get there? I don't want to use the term peak margins. But as you really start delivering on this secular opportunity, where do you think that finally heads out?

Ravi, I'll tell you that we know that we can probably achieve higher margins in -- I'd rather not give any numbers at this point, but we're comfortable that margins can still expand.

Your next question comes from David Leiker with Robert W. Baird & Co., Inc. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: This is Joe on the line for David. Just regarding the control of expenses this quarter. In the past, I think you flexed SG&A up or down in the quarter depending on whether trends are better or worse. Just wondering if you did it this quarter and then what your plan for investment might be entering the second half?

SG&A was pretty much in line with last year, right, basically at this point. What I would say forward-looking, James mentioned this, that we do anticipate R&D spending probably -- if you take a look at our data so far, our guidance really was 3.7% of sales. We're trending a tad higher, maybe 20 basis points higher in that year-to-date. We fully expect that, that trend will continue to trend higher. So that's why earlier in the call, we're talking about the second half margin. That's impacting the second half margins. But other than R&D spending, I think the SG&A controls remains where it's at. I think the only valuation was going to come through the R&D spending. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. Great. I wanted to touch on the DCT launch in China. First of all, congrats because I think this is 4 years or so in the making. Just wondering, what is the size of the opportunity today if relative to when you first announced these programs? And then do you have a sense of what maybe the launch schedule is? What's the other programs do you have in the backlog on China DCT?

Yes, we're really pleased as well, Joe, to get the product launched, and it's a great breakthrough for us and our customers in the Chinese market. So it's great news. We always said that we would launch with SAIC in the middle of this year, which we'd now confirm. And then we will start to follow on from that with FIW with subsequent transmission programs next year and then into 2015. And thus far, the projections around the size of the business and the scope of the business, it's pretty consistent with what we've outlined in the prior calls, Joe, and it's meaningful and very positive for us. Joseph D. Vruwink - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then my last one. It's great to see the dividend come back. Just looking at the payout ratio here, would you -- I guess, think this is consistent going forward so that as your earnings grow, we can expected the dividend payment to grow?

Yes. We expect to stay in that yield range that you're seeing right now, Joe.

Your next question comes from Itay Michaeli with Citi.

So I wanted to go back to the margin topic. You're doing a great job this year of controlling expenses. I'm just wondering how much of these controls are sustainable into next year as your revenue starts to return to the historical growth rate next year with backlog. Are some of these cost controls potentially going to become a headwind next year? Or can we think about incremental margins in 2014 to be pretty similar to how you've identified the walk previously?

Itay, that's a good question. We target 20% incremental margins on our additional sales. And we're very close to the reason why we target that, it talks [ph] about all the negatives of economic headwinds that we get. But we expect that putting back infrastructure and SG&A and some of the things that we're controlling this year probably will result in us not achieving the incremental margins we've seen historically. Now regionally, it could be some issues. Maybe if the sales growth comes out of one region better than another, we'll see better incremental margins. But I would suspect and we're planning on incremental margins not being as robust as we start to put more infrastructure in.

Absolutely. And the drive-through initiatives, will those start to hit your numbers next year or is that more of a sort of a 2, 3-year program?

I would say it's more of a 2-year. We think it's a 2-year program on the Drivetrain side.

Great. And then just lastly, it does look like CapEx is running a little bit below your prior full year guidance. Anything going on that you still feel comfortable with the prior range for CapEx?

At this point, we're comfortable with the guidance. We know we have some projects in the back half of for the year, major projects coming on board. So at this point, we're comfortable where the guidance is.

Your next question comes from John Murphy with Bank of America.

John Lovallo on for John Murphy. First question would be on the all-wheel drive systems. I would imagine that some of the strength in North America was driven by truck mix. But what was the main driver in Korea?

John, this is Ken Lamb. So we experienced growth in both automatic transmission components, the traditional ones, and also all-wheel drive. So it was kind of the whole Drivetrain Group was strong in Korea, which is a trend. We've actually seen that for the last couple of quarters.

Okay, okay. That's helpful. And then if we can just touch on the dividend for a second. I mean, reinstating the dividend is clearly positive in our opinion. But I guess, I'm curious on what drove the decision internally to do so. And there's no implications, I would imagine, that you see a less robust acquisition landscape or any pullback in growth initiatives or anything in that regard.

Yes, I would -- So this pretty -- the way I view it is some of the execution of what we maybe talked about over the last several months, we want to go forward with a balanced approach to the deployment of cash. So in addition to our capital expenditure, the dividend we view as a key piece to that. It is not in any way an indication of a slowdown around M&A enthusiasm or desire from a BorgWarner point of view. We remain where M&A is our top priority for utilization of cash, and we continue to work very, very diligently around M&A opportunity. We just see it as a complementary piece to the whole strategy of cash deployment in addition to the share buybacks. So we think this is very good in terms of balancing our approach, and that's really what it is. It's execution of that strategy that we've talked about in prior quarters. So yes, we feel good about it, and we'll continue to march forward on M&A as well.

Your next question comes from Joe Spak with RBC Capital Markets.

I just wanted to get back to, I guess, the lack of historical upfront in Europe, for 1 more second. If I recall correctly, some of that -- some of your mix negatively started to impact you in the back half of last year. So should we begin to see some better results just on some of your comps? And then the second part of that would be, I believe you in the past stated that more of your backlog is second half weighted. So should that help with some of the potential outperformance in the back half as well?

Yes, Joe, this is Ron. Let's talk about the second quarter comp year-over-year. If you go back to last year -- I was going to point this out earlier -- we had in the Drivetrain segment itself, we had sales increase of 20%, which was substantially above the market. And if you go back to that call and you analyze why, how we got there, we got there by DCT primarily in Europe. So the year-over-year comp in Europe is difficult, which I point out in my call this year when you're comparing the 20% sales growth last year. So that was one element. And then also as last year unfolded, like you pointed out, we had a more northern European OEM mix that was in our favor and that started going more to a normal mix, I would say, but was more unfavorable to us as it rolled up throughout the year. And as we entered the year, we felt we are in a more stable mix between Northern and Southern European OEMs. Now as we go forward, your question is what's the year-over-year comp? That's -- we're trying to still analyze all that. But I mean mathematically, you would say that should improve because you're now to a more normal mix that went unfavorable in the third quarter. I mean that's a logical conclusion that you're kind of drawing to, right there.

And let me answer your question about the backlog being started in the second half and if that can help us. We certainly expect the backlog to be started in the second half. However, we do have an offset from just less production available. So our base business will be less because of Christmas and the summer shutdowns. And that will partially offset the backlog, which will be started in the second half.

Okay. And one more quick one -- I get the earlier comment. It's great to see DCT China finally get off the ground. Is it possible to quantify, and maybe just from a margin drag perspective, what the lack of top line revenue has been given that you've obviously laid out all the costs and there's nothing to absorb that?

Yes. I'd say -- the only thing I'd say, Joe, is which we described in prior discussions, the slower ramp, the slower ramp of DCT in general is just being the customer is getting ready with that technology. Not really a BorgWarner issue, although we work very, very closely with our customers. I think you know it's a challenging technology. It's really been around getting the product ready for market. We're not seeing any slowdown in market desire or market want for the products, so we feel comfortable with the long-term view. It's more of a product quality product technology, readiness issue with the OEMs. And I think this is a good indication that we're starting to move forward now, which is great.

Okay. But I mean, it hasn't -- the lack of absorption has clearly been part of the issue in the Drivetrain Group. Is that not accurate?

Yes, yes.

That is accurate. We said that before that the DCT in China has been a drag on the Drivetrain margins.

Okay. And so it sounds like over the next 2 years, you think you'll start to get some absorption and that will help with the DCT improvement -- the Drivetrain improvement?

Yes. Okay. Yes, that okay.

Yes, you're right, Joe.

Your next question comes from Rod Lache with Deutsche Bank.

It's actually Pat Nolan on for Rod. Most of my questions have been answered, so I just had one just a follow-up detail question and then one bigger picture question. Just a detail question. The corporate expense, is there a difference between your segment results and the total operating income? It looks like the corporate expense actually declined a bit sequentially. How should we think about how that corporate expense ranges for the rest of the year? Is the Q1 kind of more indicative of what we'll see in the back half or should it kind of average out in first 2 quarters?

Okay. First of all, I just want to confirm that's correct. Sequentially we're down about $7 million on the corporate expense. Now when you look at the segment, you've got to take into consideration their affiliate income is also included in there. And in fact, that was improved sequentially, reduces the expenses. You want to call that out. That's a little minor thing you have to take into consideration. To answer your question is, what I would say on the corporate expenses is that the quarter itself probably was slightly below an average, maybe $3 million to $4 million below the average that you would expect going forward, okay?

That's helpful. And on the buyback pace, can you talk about what the drivers are? I know you're not factoring in any prospective buybacks from where we are today into the guidance. But what are the drivers that would move the pace of buybacks from where it was in the first half as we look to the back half? I mean, are there acquisitions that are pretty close to the finish line that maybe the cash will go towards that in the back half? Or conversely, if operations came in better, would you be willing to pick up that pace?

I think there's many factors we look at, at the pace of buybacks, everything from acquisitions like you're referring to, market conditions, multiples, where we're at and certain historical things, valuations internally. I wouldn't say there's one factor, but you're generally correct. Cash flow regionally also could impact that. I don't really look at one item when we make decisions on buybacks. So you can't really point to one item.

Your next question comes from Colin Langan with UBS.

This is Rahul Chadha on behalf of Colin. Just looking at your second quarter revenues and the updated guidance for the full year. Second quarter was slightly below where the consensus was estimating it to be. And it doesn't seem like you're changing your production assumptions for any region for the full year. What gives you the confidence to tighten the guidance range? Is it the commercial vehicle better than expected or better visibility?

I think at a fairly simplistic level, our view from a market outlook and a production volume level is consistent with where we were a quarter ago. So nothing from our view in the market has changed significantly enough to impact. What's driving the guidance on the revenue side, the tightening of it, is just we've got 6 months behind us. So we've got -- the first half of the year is done and in the back, so that just gives us incremental confidence that we can narrow the range. And on the EPS side, it's really 2 key things. It's the strong performance that we delivered thus far in the year, and as Ron explained, around the share count issue. And if you put all of that together, that's why we feel comfortable where we're at.

That's helpful. And then what's your outlook for the diesel mix in Europe for this year? And how do you expect this to trend maybe over the next few years?

Yes. We are -- our projection is around 53% in Europe of diesel rates, which is pretty much in line with where we were in prior quarters. So we're not seeing any real shifting in diesel mix in Europe. So that's kind of the quick answer for you.

Your next question comes from Brian Sponheimer with Gabelli. Brian Sponheimer - Gabelli & Company, Inc.: Most of my questions have been answered here. But a longer-term question, I guess, around emissions regulations in Europe. As we head into the next year, give an idea about what incremental content you may be able to put on a commercial vehicle in 2014 in Europe relative to this year.

Brian, this is Ken. As these emissions regulations continue to tighten, it's incrementally positive for us kind of across our portfolio. There's not one specific thing that we can say is going to be additional compared to the content on our previous emissions reg level. But just across the board, generally speaking, our technology helps. As they continue to progress in the emissions reg, there'll just be more [indiscernible] on content in general. Brian Sponheimer - Gabelli & Company, Inc.: Okay. And as far as your European operations are concerned, particularly within the engine division, where are you on a capacity utilization basis, say, relative to 1.5 years, 2 years ago?

I'd focus a little more kind of where I am now as opposed to honestly where I was a couple of years ago. But right now, we're pretty, pretty healthy. I mean, we're -- I don't want to put an exact number on it, but I would say we're in the 80-ish percent type range of utilization. The reason I put a little bit of a vagueness in there is it does vary a little bit plant to plant and product to product because they're serving different customers that might be on an accelerated growth or they might be launching products. But in the average, we're probably in the 80-ish, 85% range, and it's pretty healthy. Brian Sponheimer - Gabelli & Company, Inc.: And just directionally on Drivetrain, it's slightly lower?

I'd say Drivetrain is pretty similar to Engine in terms of utilization in Europe. There's not a big distinction. Then again, with the Drivetrain Group, the same comment really -- it really does vary a little bit plant to plant. But at a macro level for both the segments and the company, we're in a 80-ish percent, 85% range.

Your next question comes from Brian Johnson with Barclays.

I've got 2 questions, housekeeping and strategic. Housekeeping, great margins. Are there any engineering recovery timings that we ought to be aware of as we kind of think sequentially about the margins?

Nothing significant, Brian, okay?

Okay. Second question is more strategic. We've seen some new entrants into the commercial truck transmission space, pushing dual-clutch transmission. I visited VX booth [ph] down in Louisville earlier this year. You're already fairly active in the turbocharger business in CV. Is this an adjacency that you might be looking at?

Yes, Brian, this is James. The quick answer is yes. You mentioned -- turbo is a good example. Obviously, we're already in that space as we are with our thermal product offering. And as opportunities present themselves for us to apply Drivetrain technology or engine timing technology, we are looking actively to do this. And we continue to have those discussions with the commercial vehicle guys, leveraging our current relationships that we already have on the turbo and the thermal and the EGR side of our business.

Fair to say there's not much of that in the backlog yet?

That's probably a good assumption, Brian.

Okay. And is this something you do organically or could a bolt-on acquisition help?

It will depend a little bit on the exact products. But I would say our primary driver is to utilize the existing technology portfolio with maybe some modifications or enhancements or adjustments. That's our primary path. But I would say if there's an acquisition out there that's complementary to help us accelerate with technology into the CV space, that remains attractive to us as a possibility.

We have time for one final question, and that question comes from Richard Hilgert with Morningstar.

Ron, earlier in your comments, you had talked about the light vehicle segments, Asia, Europe, North America and Asia. Europe, 10% versus 3% production there and so on. And then you said that the North American number, the 3% increase versus the 5% increase in production was acceptance of advanced powertrain lagging the other markets. I'm curious, you're starting to quote business now 3 years out. Are you starting to see some of that starting to show up now in the North American business in what you're quoting?

Richard, in our backlog presentation, there is a section in there that we actually talk about North America now starting to adopt more of the advanced powertrains. So to answer to your question, our backlog is starting to reflect that. When we issue a new backlog, we'll have to update it for you. But we have started seeing that increase in our backlog.

Okay. Do you have a mix on your turbocharger business between diesel and gasoline engine?

We do, and it's largely reflective of the market overall. Every diesel engine just about has a turbocharger on it. So more of our business is weighted that way today. However, as you look at our growth going forward, a lot of that is on the gasoline side. More of it is on the gasoline side.

But we can expect -- you said it more or less reflects the market itself percentage breakdown between Turbo or between diesel and gasoline, yes?

It's not direct. There wasn't a direct numerical comment. It was in general, there are more diesel turbochargers in the world today than gasoline. So our business also reflects that, too.

Okay. One final housekeeping item in the guidance that you'd previously given. Operating cash flow was $900 million to $1 billion. And is that gone up now with the change in your margin?

No, it has not. That's a wide range, as you know, and there's many factors that influence that, including CapEx spending and working capital adjustments. So I'm still within that range, Richard.

I'd like to thank you all again for joining us. We expect to file our 10-Q before the end of the day, which will provide details of our results. If you have any follow-up questions about our earnings release, the matters discussed during this call or our 10-Q, please direct them to me. Stephanie, please close up the call.

That does conclude the BorgWarner 2013 Second Quarter Results Earnings Conference Call. You may now disconnect.