Operator: Our next question will come from Steve Byrne with Bank of America.
Steve Byrne: Yes. Just wanted to drill into the hydrogen project at San Gabriel, I assume that you’ll have to consume more natural gas just because that hydrogen presumably was previously being used for power production. And just curious whether you can alter the operations of your ECU units to increase hydrogen production, i.e., from changing the brine concentration running into the units.
Scott Sutton : Yes. I mean, look, not all of that hydrogen is necessarily used for our own energy production. We have a lot of large offtake arrangements with the gas companies, and we’re working our way out of those. We also just vented a lot as well. So absolutely no use. What’s happening in San Gabriel, for the most part is we’re taking hydrogen into a new application, and there’s no real meaningful offsets anywhere in our system. So this is — CO2 offsets without a corresponding penalty. That’s generally the way these first projects are set up.
Steve Byrne: And maybe another question on Winchester, is it fair to assume that your EBITDA margins between military and commercial are significantly different. And you may have a volume shift more towards military, just given what’s going on in the world, but it’s not an EBITDA benefit. Is that fair?
Scott Sutton : Well, I think when you look at the overall position of the Winchester business, certainly, we gained something on the military side. There are some challenges on the commercial side right now. You may have may have noticed that we did improve overall pricing in that business in the fourth quarter relative to the third quarter. And in fact, we expect to do the same thing in the first quarter.
Operator: Please give us a moment as we connect to the main speaker line.
Scott Sutton : okay. Sorry, apologies to everybody. I mean, for some reason, our line keeps dropping. But I’ll just repeat the answer to that last Winchester question on pricing. And we were able to lift overall pricing in the fourth quarter versus the third quarter, and we expect to do the same thing in the first quarter. Import ammunition pricing has always been low. But at the moment, we faced the additional challenge that the major domestic brands are actually pricing lower than the imports. But still, Winchester is the leader there and our trend will continue.
Operator: Our next question will come from Josh Spector with UBS.
Josh Spector: So just a follow-up on the chlorine pricing side of the equation. So when you talk about more pricing through this year, I mean how much of that has already been negotiated and it’s going to flow through versus you need to renegotiate those contracts? And just as we look at your mix of portfolio today, how much of it still has room for renegotiation versus 1, 2 years ago?
Scott Sutton : Yes. I mean, Patrick will give the right answer here. You gave the summary, right? We’ve implemented a $100 million run rate more in 2023 versus 2022. What’s the rest of it?
Patrick Schumacher : Yes. So that $100 million is locked in. So that’s not a hope that’s locked in already negotiated lift and then there’s going to be more to come this year. As Scott said, it is opening that will flow through in ’24. Order of magnitude, probably I’m not going to peg it, but it’s another substantial lift in ’24 for new stuff to negotiate in ’23.
Josh Spector: And just on cash deployment, I mean, given the step-up in interest in some of your variable rates, has any of the calculations changed on buybacks versus debt paydown?
Todd Slater : Josh, thanks for the question. Our — we would expect interest expense in 2023 to be between $150 million and $160 million. You have — 30% of our debt is variable rate. We will continue for our free cash flow to prioritize share repurchase.
