David Gitlin: Yes, Jeff, we had a target of getting field inventories at the end of last year, flat to where they ended ’21. And they were actually a bit higher than we had targeted, not excessively higher, but just I would say, a bit higher. And we do think that there will be destocking as we go through the year. Obviously, when you’re in the first quarter, there’s some level of stocking that happens in anticipation of the season. So we think the destock happens throughout the year. When we — we actually — it’s kind of interesting. When we talk to our channel partners, there are still significant demand out there. There’s what happened in Florida where we have some of our homebuilders continuously pushing on us for more products.
So we have a bit of a mix taking place where there’s demand for the new product. Obviously, everything in the South that we’re shipping is the new product, and we started that early. They’re starting to ramp in the north to get the new SEER units. There’s still demand from some of our key homebuilder customers, but we do recognize that there is some still destocking that’s going to take place through the course of the year. So we’ll have to see how the year plays out. You know that this business can swing based on a variety of factors, relatively quickly. So we think we’ve been conservative in how we’ve handicapped the year, and then we’ll have to see how these next couple of quarters play out.
Jeffrey Sprague: And then can you just elaborate a little bit more on what you’re expecting on TCC. We get kind of the arithmetic of the headwind on margins as it comes into the fold. But in terms of your internal improvement plan there, Dave, moving margins up over time and what kind of actions you’re taking to drive that?
David Gitlin: Yes. I will tell you, we were in Japan and very pleased with the progress that safe and the team are making on TCC. We’ve said that we expect margins — EBIT ROS margins to be in the mid-teens as we get out five years after the acquisition. We are certainly on track for that. We had said $100 million of synergies. I have a lot of confidence we’re going to beat that number. And if you look — if you kind of get rid of all the noise of getting — eliminating the minority income that we were picking up and the integration costs. Right now, you’re in the low teens. That’s just a stand-alone business. So, that team is making a lot of progress. Technology, best-in-class. We talked about the rotary technology, the inverter technology.
We’re using that technology to penetrate the attractive residential heating space in Europe. There could be applications in North America, our prospects in China with TCC look extremely strong despite some of the macro uncertainty in China. Japan, we’ve had to come in aggressive on pricing rightfully so, and we’ve been doing that. And there’s a lot of cost takeout opportunities, especially in supply chain, where we see the team really aggressive supply chain synergies between the two companies. So very pleased so far.
Patrick Goris: And by aggressive pricing in Japan, we see increases.
David Gitlin: Yes, aggressive. I mean, yes, good point. Yes.
Jeffrey Sprague: Thank you.
Operator: And our next question coming from the line of Nigel Coe with Wolfe Research. Your line is open.
Nigel Coe: Thanks. Good morning everyone. So it looks — it looks like low to mid-single-digit contribution from pricing. So would that be what 3%? So the gross pricing of maybe $600 million for the full year. Is that in the right down? I’m just curious how much do you think comes — is coming from carryforward from 2022 actions versus contribution from some of these price increases you’re layering in, in the first half of this year?
