Swamy Kotagiri : No, Peter, I think this was specific, one product line or one program product in electronics that cost the warranty issue in the PNB segment. Can’t get into the specifics, obviously, with the customer in all of that. But it was one specific program, contained and understood. It is done. It’s behind us, and it’s related to electronics.
Peter Sklar: Okay, thank you for your comments.
Operator: Our next question is from the line of Mark Delaney with Goldman Sachs. Please go ahead.
Mark Delaney : Yes, hi, good morning. And thank you for taking the question. The company’s 2025 EBIT margin outlook is about 100 bps lower than what the company thought it was going for 2024 when you gave that 3-year plan a year ago. The revenue views are pretty similar to what you think you’ll do in ’25 versus what you thought in ’24. So it doesn’t seem like there’s any change to the revenue view that 3 years 4, but margins are now 100 bps or so lower. So could you bridge us what’s changed on the EBIT margin potential of the business in three years?
Swamy Kotagiri : Yes, I would say the most meaningful change from what we said last February to what we’re talking about is lower volumes, right? We talked about the higher level of net input costs and lost sales and contribution from our business in Russia. I would say those are the significant points that account for the change. And you’ve got to look at margin loss. Our percentage has been negatively impacted by increased revenues and costs from inflation. And I keep repeating this, but if the — if you take into account the loss due to the volatility in production schedules, the inefficiencies, we’re not discounting that. It will be fully done. Hopefully, it does, but that’s been a negating factor, too.
Mark Delaney : Got it. Thanks, and that’s for me. And my second question was on the pricing environment and the ability for Magna to get recoveries from customers. Maybe you can elaborate a little bit more specifically on what happened in the fourth quarter? Because I know it was a positive in the quarter, but I don’t think it was as much of a positive as the company had originally been guiding for. So what happened in the fourth quarter on recoveries? And can you talk a little bit more on what’s assumed in recoveries for 2023 in terms of what would get the company to the lower end of the guidance? And what would have to happen with recovery to get to the higher end of the guidance?
Swamy Kotagiri : I think, Mark, maybe I just want to clarify. We have guided to, from a net cost inflation-wise, was about $565 million in our Q1 April, and we ended up at $530 million. So that was one. I mean when we talk about settlements, I think we’ve got to take all of this into account as we’ve had discussions. Some of it is are coming in terms of more process-oriented long-term adjustments in terms of our recovery. Some of it is coming in lump sums. And some of it is offset to give back and so on. So were the customers have, for example, a change in ratios footprint or volume agreements that contracts, that ends up in commercial settlements. So our guide to what we said the net inflation cost was going to be, I think we held and did better. Commercial settlements are really a little bit in terms of negotiations overall, which ended up in the fourth quarter.
