Sean Pelkey : Yeah, David, I’ll start. So on your question there, Yeah. So deferred tax, $380 million, which was essentially a benefit to 2023. We will make that payment in the first half of 2024. And then on the CapEx, basically going from 2.3 to 2.5 million, so that’s about a $200 million increase on that side.
Kevin Boone : Yeah. In terms of the cadence from a volume and revenue perspective, I think we’ve been clear in that first quarter, some coal dynamics, other things from a pricing perspective or probably the high watermark that we’ll have to lap, but pretty even cadence through the year after that. You’ll probably remember, we started to see some weakness into the second quarter on the industrial side of our business. And when you think about chemicals and our forest products business, in particular, some very strong, weakness that started to occur that we were, that will begin the lap quite frankly, as we get into the second quarter, late second quarter and third and fourth. So, but when we look across the year, we think we’re able to achieve growth throughout the year.
Operator: [Operator Instructions] Your question comes from the line of Ravi Shanker from Morgan Stanley. Please go ahead. Your line is open.
Ravi Shanker : Guys, just got only one. Maybe just a follow-up on that, kind of just on the operating leverage itself, I mean in theory, shouldn’t we be seeing kind of the bulk of the operating leverage kind of show up now as we come off the floor of volumes and kind of you have the maximum fixed cost absorption? And kind of the follow-up question to that is, if the market stays softer for longer in 2024, and truck rates continue to be competitive, do you think the volumes that you guys are converting will be enough to drive that operating leverage? Or do you also need price to come on top of that?
Sean Pelkey : Yeah, Ravi. So on the operating leverage point, I would say that the leverage is there underlying the business, right? We’ve had some discrete headwinds that I mentioned in the script. And as we go into the first half of this year, Q1, you got fuel lag from last year, you have other revenue coming down. You’ve got an insurance recovery. Those are things that we’re going to have to lap and get behind us and then a little bit of a tail into Q2 as well, which is why in the second half, on a reported basis, you’ll see it show up a lot more cleanly. In terms of the macro, I think, yeah, we feel pretty confident about our ability to grow even in the face of a macro that’s relatively flat. We have some business wins that are carryover, got some new business that’s coming online, and we should be able to absorb most of that with the existing resources, if not tighten up the plan a little bit and save some costs.
Operator: Your next question comes from the line of Walter Spracklin from RBC Capital Markets. Please go ahead. Your line is open.
Walter Spracklin : Thank you very much. Good afternoon, everyone. So I wanted to go back to the coal forecast. I know you mentioned in your remarks here that domestic coal is expected to be modestly impacted. And when we’re comparing it to other sources, EIA, you’re saying U.S. production is going to be down 16% in 2024, and that’s on the back of solar and the retirement of coal-fired capacity. Is this just a different market? Like is the retirement of coal-fired capacity just not in your catchment area? Is it, what would lead to such a disparity between that kind of forecast and the one that you’re providing here on the domestic coal front?
Kevin Boone : Yeah, Walter, we all read your notes here. Obviously, we’ve been intimately looking at that, and we have our own sources. But we do a bottoms-up build up, right? We look at, we talk to our customers. We understand what the demand they’re seeing in their business, how they’re forecasting, what they’re telling their investors and their stakeholders in terms of what they’re seeing. And quite frankly, this market right now is still a production — production is going to either decide our upside or limit our upside. It’s not, we don’t see a demand — demand right now where it is impacting our volumes next year. It’s really a production-constrained market from everything that we’re seeing. We see some weakness in the domestic market.
We think there is an export market that can continue to put some of that volume into that market. So there is optimism. Obviously, I know this market can change quite quickly. The global environment changes quickly. But for what we see right now and what our customers are telling us, and, there will be some weather impact as we get into the year, we’ll look at the summer to see if it’s hotter than usual or where that shakes out, that will obviously impact our domestic business, but we do think there’s an export business that as an outlet for some of the domestic side if we saw some further weakness there.
Operator: We have no further questions in our queue. And with that, this does conclude today’s conference call. Thank you for your participation, and you may now disconnect.
