Craig Arnold: Yes. And I appreciate the question. I know we kind of created this monster a little bit but we’re trying to get the investor community to move away from this systems versus product distinction. Because practically speaking, they’re all connected. So any time you sell an electrical system, it encompasses all of our products and components. And so for us, we really think about the right way to think about the company is to really take a look at the end markets that we laid out. We have data centers, utilities, industrial facilities, commercial facilities and that will be perhaps the most informative way to think about the company in the context of where growth is going. And I can just tell you; in general, from a profitability standpoint today, there is not a significant difference today between the profitability of systems and the components that go into the system.
So now there was a time inside the company back when, let’s say, we were — in the lighting business, for example. And lighting was considered a products business. It was a relatively large business with relatively lower margins than the rest of electrical. And it was a meaningful different perhaps held back by lighting that drove different profitability between the two. But today, we don’t have a significant difference in profitability. And we really think the right way to think about the company is really the function of these end markets that we’ve laid out once again on Slide 16…
Timothy Thein: Got it. Okay. Yes, yes, for sure. And real quick, Craig, on the Arrow piece within commercial, is there — do you expect much difference in terms of the growth between OEM and aftermarket in ’24? Or are those both similar projected growth rates?
Craig Arnold: Yes, no and it’s an important question because, as you know, there is a very different profit profile in OE order versus an aftermarket order. Both will grow nicely in 2024. We do expect OE to grow slightly faster than aftermarket which holds margins back a little bit which is going to be reflected in our guidance. But we expect to see very strong growth in both commercial as well as the aftermarket piece of the business, the commercial OE and aftermarket.
Operator: And our next question is from Deane Dray from RBC Capital Markets.
Deane Dray: And congrats, Tom, best of luck. And for — I don’t know if you can parse this out but is there any way you can frame your expectations on North America Electrical of what would be going through distribution versus direct ship? I’m not sure how precise you can get there but any color would be helpful.
Craig Arnold: Yes. I would say, Deane, that in North America specifically, a lot of what we do goes through distribution. And that number, order of magnitude, I think, is about 70% or so; so it’s a fairly sizable piece. And as these mega projects continue to grow, as perhaps data centers, hyperscalers continue to grow, some of that tends to be perhaps more direct by virtue of the nature. But a lot of our business today those through distribution and our distributors are just — I’d say — I’ve always said, they’re perhaps our greatest asset. We are committed to distribution. They add tremendous value. We have a very strong distribution network. So yes, it’s one of the real assets of the company.
Deane Dray: Great. And I don’t think I heard the word destocking come up at all today. So — and it did create a chuckle there. But is there any destocking, any pockets of it? You all seem to have steered clear of any of that over the past 4 months or 4 quarters but just any color there would be helpful.
Craig Arnold: We did talk about a little bit of destocking that we saw in our European business which, quite frankly, really began at the beginning of 2023. We started to see destocking in Europe specifically. Fortunately, the good news is that we’re beyond that. But in the Americas business, specifically, other than the odd balls and pockets of places, we’ve not really seen destocking in the Americas. And that’s largely because these markets, as we talked about, continue to grow pretty dramatically. But we did have a little bit of it in Europe but it’s fortunately behind us now.
Operator: Thank you. And at this time, there are no further questions in queue. Mr. Jin, please go ahead with closing remarks.
Yan Jin: Okay. Thanks, guys. I know it’s a busy day and we do appreciate everybody’s questions. As always, the IR team is available to address your follow-up calls. Have a good day. Thanks for joining us. Bye.
Operator: Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect.
