David Raso: My question relates to the first quarter guidance. Normal seasonality on sales, EBIT margins usually go up a couple hundred basis points. That’s sort of a $4.50 EPS number. What you’re implying is a little closer to $4. The margins, in particular, you mentioned pension, and I know CI is at a high level. So the comp is tough sequentially. But on price cost, what are you assuming on price cost first quarter versus fourth quarter, if you could just give us some color. It’s just to see the margins flat to down sequentially, even with a tough comp, is a bit unique. And just if you could help us flesh out sort of the price cost.
Andrew Bonfield: And part of the reason why I highlighted that CI margins were actually very, very high in the fourth quarter, part of that was because normally, in the fourth quarter, you don’t see a dealer inventory build as big as we did see in the fourth quarter and the fact that that release did help overall CI margins come in a little bit better than we expected as well. Obviously, what that does mean is, normally €“ yes, correct, we normally get a 200 to 300 basis points bump in the first quarter based on production and ramping up production. Obviously, those production rates aren’t quite the same as they would normally be fourth quarter to first quarter because, obviously, we’re looking at a very different profile, particularly given that, obviously, we were building production through 2022, particularly in CI.
So that is the biggest challenge and that’s probably the biggest single factor which will drive margins sequentially lower. On price cost, we still expect strong price in Q1. It will not be as big as Q4 for the simple reason we are lapping price increases that we put through at the beginning of 2022. So that will be coming down slightly, but we do expect price cost to be favorable for the first half of the year. Again, that’s just going to create a little bit of noise in the margin structure quarter-on-quarter. Unfortunately, we are not going to go back to the normal lower margins in Q1, higher margins in Q4, which you guys are going to be able to model is going to still be a little bit different as we go through 2023. Obviously, 2022 was the opposite.
Operator: Your next question comes from the line of Tami Zakaria with J.P. Morgan.
Tami Zakaria: I’m trying to understand the volume commentary for this year. Since you expect sales to end users to be stronger this year versus last year, but you don’t expect dealer inventory stocking benefit. Does that mean dealer inventory could actually decline again from current levels to support the stronger sales to end users?
Andrew Bonfield: No, that’s an assumption at the moment, Tami. At the moment, as a planning assumption, as is always the case, the dealer inventories will be flattish for the year and should not increase or decrease. Effectively, what that does mean, though, is obviously the headwind exists from our shipments on the $2.4 billion of dealer inventory that got built in 2022. Remind you, a big chunk of that, around about 60% is in E&T and in RI, which is related to customer orders, which will be fall through into sales to end users in due course. But overall, we expect, again, sales to users to be up year-over-year and the dealer inventory headwind will moderate that level of increase the volume that we will see in our shipments, as I said in my remarks.
Operator: Your next question comes from the line of Michael Feniger with Bank of America.
