Michael Doss: Well, I’ll answer the second part of your question first. I mean, the overall numbers you talked about are accurate relative to what some of those full conversion adoption rates would be. they’re directionally correct, at least for your modeling. In regards to backlogs, I think you got to take a step back and think about we’re talking about operating rates now and you’re taking downtime to mass supply and demand. So, backlogs, quite frankly, are artificial, because they can be whatever you want them to be based on the amount of downtime that you take. And so, the more germane point is, as we try to articulate here Gabe, out of three of the four substrates, we’re very busy on three of those. It’s the coded SBS, that’s the one that’s got the biggest challenges for us for the reasons we’ve already chronicled.
So, I wouldn’t get overly hung up around whether it’s three, four, five, six weeks. That matters when you’re running full. And right now, particularly, on the coded SBS side, we’re not. And so I’ve watched those operating rates and really watched, and see what our overall growth development looks like here in Q4 and into 2024, because as we grow 100 basis points to 200 basis points, that’s where those tons come. And I already mentioned the other thing that is out there is that we’re no longer going to buy as many tons internationally on the CUK side. So that will actually help try some of that back too.
Stephen Scherger: Yes, Gabe, just playing that back, I mean, you just kind of rounded that Mike was just articulating. We’ve got fundamentally SBS folding carton in the open market, which has the appropriate headwinds. And it’s well under 10% of the company, well under 10% of the company. And so, you’ve got 90% plus of the company that’s functioning as we’ve been articulating to you here this morning with good volume and an expectation of a return to organic sales growth that we’ll earn on in 2024.
Gabe Hajde: Okay. I appreciate that, gentlemen. The last one, if I could squeeze it in real quick, if my model is correct or my notes, you had about $65 million last second half of 2022 of additional incentive comp accruals. I’m sort of bridging this into the free cash flow number. So, I’m assuming, I don’t know what that relationship looks like on the IC front versus H2 2023. Just curious if that’s helping the second half at all. And then really, again, to put a finer point on the working capital component of your cash flow bridge. Are you assuming some sort of a call it, $150 million, $175 million use this year?
Stephen Scherger: Hey, Gabe. it’s Steve. On the first component, the incentive compensation year-over-year is very similar. So, there’s not anything there that there is a headwind or a tailwind. So, it’s all pretty consistent, ’22 to ’23 and it’s all in the guide. I don’t have the exact number in front of me. But yes, to get to the midpoint of our working capital, there’ll be some use of cash on the working capital front. As we dial in kind of where do we want to end the year on inventory levels, where do we want to run supply to meet demand? So, I’m sure your model on the use, knowing where interest expenses, where pension expenses, where taxes are, you may be a little light on taxes, our cash taxes this year are moving up as we become a U.S. cash taxpayer.
We’re on the right to do that. So, we’ll provide some more detail as we kind of work through modeling for next year. But I think the key is that we’re going to generate, the midpoint of that cash flow and our leverage is going to end the year at the lower end of our range. And by the way, that’s a raw leverage calculation. It’s not pro forma. It’s the real leverage of the company after spending $260 million to acquire Bell.
Gabe Hajde: Appreciate it. thank you.
Stephen Scherger: Thank you.
Operator: Thank you. As there are no additional questions, waiting at this time, I’d like to hand the call back to the president and CEO, Mike Doss for closing remarks. I want to thank all of you for joining us on the call today. We apologize for the technical difficulties if you experienced those on your end. And we look forward to talking to all of you in February at our investor event in New York City. So, hope everybody has a great fall and a safe day today. Happy Halloween.
Operator: Ladies and gentlemen, thank you for joining the Graphic Packaging’s third quarter 2023 earnings call. Have a great rest of your day. You may now disconnect your lines.
