And then the forward curves would suggest interest rates are going to drop with the Fed starting to cut rates in ’23 or ’24. I’m not going to comment on that. That’s why I really can’t comment on is the second half a good run rate into ’24 because a lot of it is floating rate debt that will be driven by Fed policy and how the economies play out over time.
Operator: Our next question comes from Umer Raffat from Evercore ISI. Please go ahead. Your line is open.
Umer Raffat: I have two here, if I may. First, Jeff, as you reflect back over the course of last year, so and all the negative guidance revisions, — why do you think the Elanco team was overestimating numbers in such a consistent way? And can we reasonably assume that the $0.74 to $0.83 is truly a trough first? And then secondly, on the base business EPS, which is no longer that $1 that it used to be, I think an important question for a lot of new investors looking at Elanco is, what’s the incremental operating margin on the new launches? Will they come in at 65% or so? Or would it be much less than that.
Jeff Simmons: Yes. Thank you, Mark. We stand here today with confidence in our ’23 guidance, as Todd has highlighted. As we look back at last year and we came into our May call and went to the second half, we had put together 6 consistent quarters of holding and staying to our guidance. And we had an environment that that hit us in a multitude of ways, and predicting war, coved lockdowns in China, the inflation and the recession and the impact on really us where we were over-indexed into China in a pet retail situation in the Northern Europe. Those were things that I’m not sure that we could have predicted. I would say that we’ve taken a very measured approach this year and looking at overall, our confidence in this guidance is looking at saying, yes, we’ve got a competitive portfolio and a team — but looking at this macro environment, as Todd highlighted, we’ve taken assumptions.
We’ve assumed that we’re going to carry a lot of these same headwinds and challenges out of ’22 into the first half — and we will — we have seen a lot of sequential improvements, but we’re seeing this as a lower step-up throughout the year. And so again, I stand here with confidence in the assumptions, the approach we’ve taken in our guidance. We start to return to growth in the second half of the year. We’re going to do it in a balanced way and also prepare this next era of growth in ’24 and ’25, that’s so critical to our investors and long-term value of this company.
Todd Young: Over on the launches, certainly, over time, these launches will be incrementally higher margins and will provide really good EBITDA flow-through given our installed base at the vet clinic where these big launches will go is appropriate for the coverage needed. And so it will really be about incremental margin or marketing expenses to drive the launches versus needing to double the sales force or something that in. So over time, certainly, we expect these to be incrementally higher margins. But as you know, scale helps. And as we drive them higher over time, margins is to continue to improve.
Operator: Our next question comes from Jon Block from Stifel. Please go ahead. Your line is open.
