Rafe Jadrosich: Hi, there. It’s Rafe at BofA. Thanks for taking my question. I just wanted to follow up on a comment you made earlier in terms of the Europe natural gas input. I think you said that you saw costs would be more in line with competitors by year -end. I thought while raw material costs were going up, your competitors were hedged, so they had lower input costs. I would have thought as the kind of gas prices come down, and they’re hedged, you would actually have sort of a benefit there, lower gas prices. Is there a window where your input costs will be lower because they’re hedged and they don’t get the benefit from the falling raw material cost?
Jeff Lorberbaum: First is that the comment was around our European Ceramic business, not all our businesses. And so in European Ceramic, the cost of gas prior to this was about 15% of the manufacturing cost. It peaked somewhere over 40%. And what we’ve said was going into this thing that we have not hedged gas prices historically. It has given us an advantage by not doing it. But as you went through these things as gas prices went up by 8 times to 10 times over there, we’re competing against people that had hedged it at much lower prices. The comments were around this year as the gas prices have dropped substantially that we believe by the fall flowing through inventory, we should be on a competitive level with those companies that had hedged before this whole thing started.
Rafe Jadrosich: Got it. So because they’re still hedged, will they have higher gas prices at the end of the year?
Chris Wellborn: I think where they are hedged will be more like what the market will be, is the way to look at that.
Jeff Lorberbaum: We think their average hedging price will be similar because we’re assuming that they hedged more during — if you have a hedging policy that we’re assuming that their average hedge prices will be similar to where our purchase prices will be.
Rafe Jadrosich: Okay. That’s really helpful. And then just in terms of the planned CapEx, can you just break out how much of it is maintenance versus growth? Then within that growth component, like how much is Flooring categories versus some of the other growing lines like countertops? Thank you.
James Brunk: Well, the growth investments, I would say, are between $200 million and $250 million, depending on timing. Most of that would be in the Flooring area. Maintenance CapEx approximately is $250 million. And then the balance is on cost reductions, product innovation and acquisitions.
Rafe Jadrosich: Thank you. Very helpful.
Operator: Our next question comes from Adam Baumgarten from Zelman. Please go ahead.
Adam Baumgarten: Hey, everybody. Just a question on first quarter EPS given that’s roughly in line — expected to be in line with 4Q, should we expect from the segment level the performance to be similar as well?
James Brunk: Similar — explain your question a little bit more, please.
Adam Baumgarten: You said your EPS guidance is really the same in 1Q versus what you put up in 4Q. So just from a segment fundamentals and performance, should that look similar as well?
James Brunk: So I would say Flooring North America, given the market conditions and such remains slow and they — we do anticipate more pressure on pricing and mix with the higher cost inventory still being used. Production levels will still be low and labor inflation will increase. But given this, I still expect margins in Q1 should be slightly better and then strengthened in Q2 when the costs align and volume seasonally increases.
