Rob Rehard: Yes. Matthew, this is Rob. Thanks. So absolutely, we do believe that we can be price/cost positive, slightly positive, and that’s basically embedded in our guide and what we had assumed. You asked about what gives us confidence? Well, first of all, the fourth quarter was the 21st quarter of being at least price/cost neutral, and the eighth quarter where we’ve been price/cost positive, despite the challenging environment that we’re in. So we’ve got a really strong track record of holding on to price. If you go back and, historically, you’ll see that we’ve been able to do that, especially in distribution and the aftermarket side. Remember, this is all net of MPF that I’m talking about here. We’ve got a — two-way material price formula is on about 20% of our business.
So that’s working in the other direction on us right now, but rollover, certainly our carryover benefits from price moving into €˜23 is the other side that helps offset some of that impact. So hopefully, that helps.
Operator: Next question comes from Jeff Hammond of KeyBanc Capital Markets. Please go ahead.
Jeff Hammond: Thanks for all the detail. That was really helpful. The one thing I want to zero in on is climate, because I know you had some noise in the margins this year. And I think you’re saying, for the full year, revenue down mid-single digits, margins up 50 bps, but your 1Q margin is down pretty substantially sequentially and year-on-year. So, I’m just trying to understand kind of in a decline market and the tough 1Q, kind of how you get margins up on a full year basis?
Rob Rehard: Yes. So first of all, the margin drivers on a full year basis are — obviously, you’ve got the volume piece go in one direction. But then we’ve got new product development, like the new Frontier product that I mentioned in my prepared remarks. And then we still anticipate we’ll be price/cost positive despite the fact that the MPFs are moving in a downward direction. And so for the — from a full year perspective, we absolutely have line of sight to see in those margins up that 0.5 point give or take. I mean, that is absolutely where we’re modeling at this point. Remember, also, Jeff, we’re going to start the year a bit conservative here. And so we think there could be additional opportunity here for Climate as we move through the year.
Louis Pinkham: Jeff, I’ll add a couple of more things and Rob’s spot on. When you think about €˜22, we did a lot to service our customer in €˜22, and our supply chains are balancing out. And so, we’re not going to have as much of that headwind around spot buys and premium freight. And just bluntly, we’re continuing to drive 80/20 and lean that is helping us in being more productive and more efficient. And so, overall, the challenge of Q1 is really just to compare year-over-year in the cost roll. We believe Climate will strengthen as the year progresses.
Rob Rehard: And one more point, and I failed to mention this is that when you’re dealing with the MPS and they move in a downward direction, it does help your margin rate as you move through the year. So just one other point, I think.
Jeff Hammond: Okay. That’s great color. Maybe just maybe two quick ones in. One, I appreciate the free cash flow comment and targets. Maybe just speak to what you think free cash flow conversion can be as you work on that working capital? What you think the source from all the working capital build was in €˜22 can be in €˜23? And then just any update on what you’re thinking about Altra accretion for 2023, just given the much favorable interest costs that you got? Thanks.
Rob Rehard: Sure. So, I’ll take those in order. First, we — when it comes to free cash flow and trade working capital and where we expect to see a significant source of cash as we move into €˜23 is going to be in inventory. And that, as we’ve said, as the supply chain normalizes. And we estimate that that — in 2023, we estimate that somewhere in the range of $150 million to $200 million of — as a source in €˜23. And then, as we move forward into €˜24, another $100 million, again, as we have this elevated inventory level and that supply chain starts to normalize. So, $250 million, $300 million range over the next 18 to 24 months is how we’re thinking about it. We know the timing is a bit out of our control, but those are the levels that we’re talking about at this point and feel very confident in our ability to execute on that based on the way that we manage the business for sure.
Let’s talk about accretion now. So, we see, based on the — we had originally modeled, as we mentioned, rates, interest rates on an average of about 7.5% on the bonds, and we’re now roughly at 6.2% on a weighted basis. So that 130 basis points certainly helps in terms of the interest expense that we’ll be seeing flow through the business and that absolutely impacts accretion. And so, we expect the next 12 months, post close, to be — the accretion to be around 8%, and it’s up about — from about 4% at announcement. And then certainly, a 2024 estimate at this time somewhere in the mid-teens. So, hopefully, that helps.
Operator: The next question comes from Chris Dankert of Loop Capital. Please go ahead.
Chris Dankert: Thanks for taking the question and for all the details so far this morning. I guess, thinking about the sales comments and you provided some market commentary, some of your organic commentary. I guess, baked into that organic outlook, how should be thinking about backlog burn, kind of what’s baked in versus what could be upside, some the risk of cancellations? Any comment on kind of how the backlog fits into that guidance outlook would be great.
Louis Pinkham: Yes. So, good morning, Chris, and thanks for your comments. We are expecting a burn down of our backlog in order to achieve those numbers. Now, I’ll tell you, orders were slightly stronger in January than what our modeling is for that burn down of backlog. Now, it’s one month. We’re going to be measured in our approach here, but we can achieve our guidance with a mid-teens reduction in orders in the first half and an improvement in the second half, and we can meet our guidance through the backlog. And so, that’s how we’re modeling it right now. If orders are a little bit stronger, then that’s going to give us a little bit more strength.
