David Deckelbaum: Thanks for squeezing me in guys. I wanted to just ask maybe a non-lithium related question, I would say, I guess upwards of a year ago, you guys were looking strategically at that perhaps divesting the catch in business. We have seen a rebound in that business. And it seems like the outlook is fairly robust for the fourth quarter. Considering the balance with the energy storage side right now, is this potentially a strategic time of divesting that business or putting it under review or should we think of this as part of the going concern?
Kent Masters: So, I think we went through that process a year ago and couldn’t get the value for catching that we were thinking about. So, we rebranded it. we are treating it as a wholly owned subsidiary, and that’s kind of the go forward for the moment. I don’t know that we would think about it long-term as part of the overall strategy. But in the near-term, that’s part of the plan.
David Deckelbaum: Got it. And I guess just maybe a question for Eric. On the energy storage side, you talked about the Talison JV and partner electing not to take shipments in the fourth quarter. We have seen some other of your peers building inventory in the fourth quarter here. Do you anticipate doing that in any of your assets or advocating for incremental inventory stocking or slowing down at any of the other assets in Australia?
Eric Norris: The best way to answer that, and you are right, every supplier has a different situation and the situation for our partners at Talison that they have unique issues and challenges that are different perhaps than ours. When we look at our rate of capacity addition downstream for conversion, and that includes Qinzhou coming up and includes Kemerton I and II coming up in that part of the world, and continuing to run [Technical Difficulty] in our Qinzhou facilities at full capacity and then look at ramping Meishan later in the year next year. We see demand for more spodumene to obviously serve that growth. We haven’t given precise guidance on what that volume growth is for next year. We will do that in three months’ time.
But as I have said, I think earlier, it’s a double-digit type growth we are expecting again, which has a demand on spodumene. Our mandate is to run efficiently in this environment, right, because cash preservation to support our growth is critical. So, we are not in a mode of trying to carry working capital that we aren’t going to put into – convert into cash in a reasonable timeframe. So, building inventories is less of a strategy than ramping production to match the conversion demand downstream. And again, we will give more guidance on all of that in a number of months.
David Deckelbaum: It sounds like you guys aren’t going to be coming back to the market with an update, like you did last January that we should wait until February with the fourth quarter earnings?
Kent Masters: Yes, the thinking at the moment is that we will do that in normal course to be the February earnings.
David Deckelbaum: Thank you all for the answers.
Operator: Your next question comes from the line of Kevin McCarthy of Vertical Research Partners. Kevin, your line is open,
Kevin McCarthy: Thank you and good morning. On Slide 11, you indicate that a $10 per kilogram change in market indices would equate to a change of $5 to $7 per kilogram in your realized pricing for this year. My question is, would that sort of rule of thumb apply to 2024 as well, or might it be different?
Scott Tozier: Yes. Kevin, so that should apply. And just as a reminder, that’s on a full year basis. So, it has to move by $10 over the full year and the full year impact of that kind of 5% to 7% range [Technical Difficulty] it’s a little bit confusing because that moves up and down like we did this year that makes it a little bit harder to track through that. But that ratio carries forward into 2024. Yes. So, the only – I would say we except from that is if you were to get into the contract or it’s correct. So, that number is kind of – when we put that out there, it was a higher number, wasn’t anywhere near the floors.
Kevin McCarthy: Thank you for that. And then coming back to Slide 15 and maybe the subject of the spodumene concentrate inventory flow-through, tempted to ask, Scott, how do you see the quarterly margin pattern progressing, or put differently, which do you think would be the trough margin quarter as you digest the expense of spodumene, might it be the first quarter of next year, the second quarter, or is it difficult to tell at this point?
Scott Tozier: Yes. I think as you look at that chart, you can kind of see where those lines start to converge and that the trough would be in this fourth quarter of 2023. Of course, as you look at that, you are going to have some impact in the first quarter. So, I think as you look at the next year from that impact that the trough in 2024 would be in the first quarter.
Kevin McCarthy: Okay. Thanks so much.
Operator: Your next question comes from the line of Vincent Andrews with Morgan Stanley. Vincent, your line is open.
Vincent Andrews: Thank you. Kent, can I ask you on the balance sheet philosophically? If we think back a couple of months with Liontown, you are going to debt finance that acquisition. And if I recall correctly in the slide deck, you had a range of outcomes on price, and I think the better case was about 15,000. So, how do you think about – or how do you think about using the balance sheet for M&A versus your growth CapEx plans, because I am just thinking about your comments from earlier that you might push things – change the sequencing or so forth. And I guess I am also wondering, are you less interested in debt financing, organic growth versus acquired growth? And as you think about the next couple of years, do you need to be free cash flow positive, or are you willing to let the leverage come up a little bit if that’s what happens?
Kent Masters: Yes. So, there is a lot in that question, and it depends on how things play out. I mean I guess the things – we want to make sure that we kind of set fundamentally, we want to be investment grade, and we kind of have a – we have a target or a kind of a ceiling that we kind of work to is about 2.5x around that. So, we want to be – and obviously, that’s under stress period, so we want to stay below that, and we will have to make adjustments to do that, right. So, we want to preserve our organic growth plan that we have because we have got resources for that. Our acquisitions have been focused on a couple of different areas. We will still look at M&A, but it’s not going to be at the same scale that we were frankly looking at six months ago.
