Bob Wetherbee: It’s additive to the total mix. So it does not change what we expect to get out of the brownfield investment. So you’re right, our total capacity is actually — is going up to closer to 70%. You did the math right. So we’re excited about it. The long lead time items that are on the books order-wise it’s going to be really big. We’re happy actually that the demand has been so strong and the customer commitments have really been strong, which is why we raised the short-term demand or capacity number from the 25% to the 35%. And we were out there last week, put our hands on them, and it’s pretty exciting to see the ramp is underway.
Phil Gibbs: And you feel all this added capacity is supported by customer commitments.
Bob Wetherbee: We do. And it’s moving from the talk about it to the commit to it phase and a lot of those commitments have been made based on what we’re seeing in the market. I think probably the last 90 days, the reality of the demand in 2023 is coming to the market, and we’re seeing lots of interest and our lead times are stretching out to show it. So the simple answer is yes. We feel the customers are committing and have committed in many cases, to the capacity.
Phil Gibbs: Do those involve some of these prepayments that you’ve mentioned? So it sounded like it was a $30 million tailwind to cash in the fourth quarter now, is that $30 million become a $30 million headwind as you ship against those commitments next year?
Don Newman: I wouldn’t call it a headwind.
Phil Gibbs: Do you have to give it back?
Don Newman: Well, the way I would look at it, Phil is, number one, the indicator as to how strong the demand is in the market. that customers are willing to make those prepayments in order to reserve their slots. The reality is what’s happened is that’s cash flow that we would have expected to hit in 2023 that has been accelerated into Q4. Now we don’t look at that as necessarily creating a divot for us in 2023. Clearly, when you look at our cash flow guidance for 2023, we didn’t take that down by respect excuse me, $30 million. We set the midpoint at 150. So that’s the way to look at it and I think that, again, the strongest takeaway that you can make on that — those advanced payments are the demand, which we keep. We said it 50x already in the call, but demand is truly strong and our customers, this is not a blip. Our customers are seeing a sustained need for our materials, and it’s going to increase from here.
Operator: Our next question is from Seth Seifman from JPMorgan.
Seth Seifman: I want to start off asking start off asking about the profitability in HPMC. And how we should think about the drop-through in 2023. Some quarters were stronger than others in ’22 that last quarter looked a little bit lighter than we expected and kind of moving from the 18% this year to the low to mid-20s out in 2025. How to think about that progression, whether it’s kind of back-end weighted or more even across the years.
Don Newman: Yes. I think the easiest way to think about it is, we’ve talked about incremental margins going forward north of 30%, I think is what I’ve shared. We still expect that, that is intact. We did note that with the additional $36 million of postretirement expense in 2023, that’s going to create some earnings headwinds. It will also a bit dilutive to the overall margins for the business. This is not HPMC specific, but for the overall margins. The good news is we’re going to more than make up for that that roughly 80 basis point to 90 basis point headwind due to the postretirement. Now when you think about HPMC, there’s strong growth that we’re seeing in that business. The mix is changing as we get more and more of the next-gen products that are being sold.
