The unlocking of working capital from our U.S. Navy programs, which is probably close to $20 million of cash opportunity for us, that comes in between the second half of 2023 and into 2024. And the way we have forecasted leverage, you have taken a more conservative view on free cash flow, and we are saying that unlocking of working capital from U.S. Navy happens in 2024.
Unidentified Analyst: Got it. Appreciate all the color. Thank you, guys.
Operator: And our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question.
Nathan Jones: Good morning everyone.
Tony Najjar: Good morning Nathan.
A.J. Sharma: Good morning Nathan.
Nathan Jones: I am going to start with a couple of questions on the strategic review. I think it was a year and a day ago that it was announced. Can you just give us a few comments on why this is taking so long? I mean it wouldn’t typically take this long. I mean I imagine that it probably causes some internal disruptions with talent retention and acquisition given the uncertainty? And any comments you can make on whether or not you think it’s impacting your ability to win business with the sunset here around the company.
Tony Najjar: So Andy, the last year €“ Nathan, last year was basically spent focusing on completing the restatement, as you know, which we finished in September. And then after that, we started to more actively work the process. The process is underway as we have communicated a couple of times now recently. So, that’s really what we can say about that at this point. But again, last year was a big focus here to complete the restatement, which came up early in the year. From a talent perspective, we have basically maintained our key talent and the businesses. The businesses are focused on execution as it shows up in our results. So, we haven’t had any issues attracting talent. From a customer’s perspective, the question doesn’t really come up very much.
And when it does, we explain where we are. But it really hasn’t had any impact from the customers and order perspective. And again, the results, I think speak to that. So, that’s where we are. We will continue to communicate as we make progress with the review. But at this point, all we can say is the process is underway.
Nathan Jones: Okay. I will go on to aerospace and defense. With very high margins in the quarter and I think all-time record for the company, can you talk about the drivers of that margin performance in the fourth quarter and whether there was anything more discrete that might have driven it up or it’s more of a sustainable level you think you can hold?
Tony Najjar: In Q4, typically, we do see higher margins in A&D, and it’s basically a lot of the spot orders that we received during the year, which kind of start to shift in Q3 and Q4 and that’s where most of our pricing is coming in. So, it’s pricing and then it’s volume. It’s usually our highest volume quarter in the year as well. So, these are the two key elements, basically.
Nathan Jones: So, this is not really a new kind of baseline level for A&D margins. It’s more typical seasonality and a good performance during the quarter?
A.J. Sharma: Yes. I think that’s the appropriate way of factorizing it, Nathan. And as we look into 2023, we do expect on a full year basis, A&D margins to expand slightly, but we are not €“ at least at this time, we are not baking in an equally strong margin quarter for aerospace and defense in 2023.
Nathan Jones: Okay. A couple on cash and investments. You guys have talked about growth investments, CapEx for various reasons. Can you provide a little more color on kind of the magnitude of the incremental investments that you are making in 2023, both that run through the P&L and that are going to run through CapEx?
