Kevin Nowlan: I think as I was just mentioning to Emmanuel, it’s essentially unchanged. I mean we think last year and heading into the beginning of this year was really the inflection point of the business from an electrification standpoint. We leaned forward pretty significantly last year with a $150-plus million step-up in eProducts related to R&D. And now as we head into 2023 and you’re seeing all that EV-related revenue growth coming through and the contribution coming on that revenue growth that contribution margin growth this year is outpacing the growth in eProducts R&D and continues to put us on pace, as I mentioned, to Emmanuel for us to be approaching breakeven as we exit ’23 and enter the beginning of 2024.
James Picariello: Got it. And just any clarity on what the SpinCo’s targeted net leverage could be? I know you’ve previously communicated a lot have a healthy cap structure. Just curious if there’s a finer point on that.
Kevin Nowlan: I’m not going to provide any more color on that at this point. And we’re still on target to execute the spin in late 2023. And as we approach the spin-off date, get closer to that, you should expect that both companies are going to hold investor days, at which point in time we’ll provide more clarity around the financial outlook and capital structures of both businesses. But the overall concept is as it relates to both NewCo and BorgWarner on a go-forward basis that we’re going to continue to maintain moderate levels of leverage in a way that supports the ability of both companies to execute their respective strategies.
Operator: And your next question comes from Rod Lache with Wolfe Research.
Rod Lache: Good morning, everybody. Fred, you feel better. Kevin, I think I have a few questions for you. First of all, is it correct that already a significant amount of additional inflation 2023, but you are not assuming any real recovery in terms of incremental pricing on that? And that if you do achieve incremental recovery, that would actually be accretive to your revenue forecast and your earnings forecast. Am I understanding that right?
Kevin Nowlan: I think — I mean, the way to think about it, we exited 2022 at a level of pricing from the supply base and pricing with the customers that we think is likely going to continue at or around that level heading into 2023. And that’s effectively what’s underlying the guide.
Rod Lache: Okay. So in other words, you already had this from the beginning of the year. There’s no like spillover effect from negotiations that you had benefited from over the course of the year or in the middle of the year last year?
Kevin Nowlan: I think the spillover effect is what I mentioned with respect to my comments about the potential volatility in margins in Q1, as we exited — as we negotiated with our customers in 2022, the focus was really on how we make sure that we’re recovering a fair share of the inflationary impacts we were seeing in 2022. And as we head into 2023, we would discuss with our customers and our suppliers, the extent to which some of those pricing increases need to continue to offset the inflationary environment. And so we could see a little bit of choppiness in Q1 as we go through some of those discussions. But overall, our outlook for the full year is that we don’t expect to see a material impact from the net pricing environment on a year-over-year basis relative to ’22.
Rod Lache: Understood. Can you maybe clarify what the magnitude of the inflationary burden is for you that is already embedded in your numbers and you’re seemingly offsetting in part through additional productivity. Is it correct that the scope of that inflationary burden is beyond parts and materials like it’s extending to things like energy, labor and other factors at this point?
