David Rawlinson: Yes. I make a number of comments. I think we have seen some depression in consumer sentiment I think you can see that in a lot of the sentiment studies, whether it’s the Deloitte, University of Michigan, of others, although it seems to have largely leveled out. I would say it doesn’t appear to me to be getting dramatically worse. I do think you do see some discretionary spending drawing back. I think that’s partly inflation. I think that’s partly interest rate expense. We also have a reasonably sized home business that is a little bit downstream of fewer home sales and new homes opening. And so that’s a place that might be a touch softer. But I would say overall, we’re seeing relative stability now in the behaviors of our customers.
Our retention rates still seem to be holding up pretty well with our best customers, and we are starting to see some ability to get some price and take some price with our customers. So I think our customers are — I wouldn’t say that they’re on an upward slope, but I’d say they’re hanging in there at a pretty stable level. And for our best customers, we’re seeing relatively similar levels of frequency of purchase data from the brand that our main brand as well. So it looks reasonably stable right now.
Hale Holden: I got it. And then my last question is given the price that where some of your bonds are trading and the high liquidity the company has over the next 6 months to 10 months, are you guys sort of focused on just head down operations or is there the potential to accelerate deleveraging to take advantage of market prices?
Ben Oren: It’s Ben Oren again. I think for now what we’ve done is put in place a cash at every tier such that we don’t have any risk of amendments or violations of covenants and give the company the time to realize the Project Athens saves. And once we do that should be back to much healthier balance sheet. Doesn’t mean we won’t look at opportunities between now and then. But for now, that’s our — that’s why we’ve taken the actions we did in 2022.
David Rawlinson: If I could just add, I think Ben’s comments are right on. We took the actions we took on the balance sheet both the sale leasebacks and the movements of cash to create maximum flexibility. That first is going to be dedicated towards the turnaround, which we believe is underway. But it also does provide flexibility to manage our balance sheet as we see fit when we have more certainty about some of the elements of that turnaround.
Operator: Thank you. The next question is coming from Jason Bazinet of Citi. Please go ahead.
Jason Bazinet: I had a question on free cash and liquidity. Is there anything that you’d call out as unusual for 2023 in terms of free cash generation? I’m just thinking things like CapEx or TV distribution rights or green energy. In other words, that once we get our EBITDA forecast, is there anything noteworthy that you’d call out there?
Jim Hathaway: I would just give a quick comment, then I’ll have Ben follow-up as well. Two quick things. One is on CapEx, we actually are projecting a slightly lower CapEx for 2023 versus 2022. We made decisions on offsets to ensure that we could fully fund Project Athens related initiatives with CapEx. We will have also slightly elevated distribution in commissions related to CapEx, but that’s imagined in the number that I just gave you. It averages to about $100 million. But this will be an up year compared to last year.
David Rawlinson: Yes. And I’d just say this was a little bit embedded in your question. I covered this a little bit earlier. This is David. A number of things are going on as we go into this year in terms of cash flow. The first thing is what we pointed out in terms of the working capital reversal from last year, that’s material to the free cash flow outlook. The second as Jim talked earlier a little bit about some of the storage detention and demurrage costs, but there are also some other Rocky Mount costs. I talked about that at the Liberty Investor Day last year that we expect to start falling out of the P&L this year. And relative to last year should give us some tailwinds in terms of cash flow. And then as we’ve talked about in this call on the second half, we start to get the benefit from some of the actions we’re taking in Project Athens on cash flow going through 2023.
Jason Bazinet: Okay. And then just one follow-up on liquidity. Should we anticipate anything in on top of all of the actions you’ve taken related to the sale leasebacks, or do you think that’s we’re sort of done with tapping pools of liquidity from sort of hidden assets now?
David Rawlinson: I think we look at our asset mix regularly, currently have no expectations for additional real estate transactions, although we do have additional real estate, but we’ll look at it opportunistically over time.
Operator: Thank you. The next question is coming from William Reuter of Bank of America. Please go ahead.
William Reuter: Good morning. My first question is, I think you mentioned in your prepared remarks that you expect to continue to fund obligations at Qurate or at Liberty with the QVC revolver. I thought that the commentary at the bottom of the press release referred to you being above the 3.5x covenant. Is it that you expect to be in compliance with that covenant as OIBDA improves throughout the year?
David Rawlinson: So debt service and tax-related payments are carved out of the restricted payments test.
William Reuter: Got it. Okay. And with regard to sale leasebacks, are we done with the major ones or should we expect it potentially there’ll be more this year?
David Rawlinson: Yes. I think I just answered that question. We have additional real estate. We look at it from time to time and we have no current expectations.
