Kevin Lobo: Thank you.
Glenn Boehnlein: Thank you.
Operator: Thank you. Our next question comes from Drew Ranieri with Morgan Stanley. You may proceed.
Drew Ranieri: Hi, everyone. Thanks for taking the questions. Kevin, just for you to start. You have — we have talked about the capital order book being stronger year-over-year. But can you maybe talk a little bit more specifically of what you are seeing in the hospital versus in the ASC setting? Any noticeable trends in — even in procedures in the ASC as you are entering 2023? And then I have a follow-up.
Kevin Lobo: Yeah. So, clearly, this trend towards procedures being shifted to the ASC is continuing. It really accelerated during the pandemic, but there’s no signs of that slowing down. Even if I look at our Mako installations, I would say, this year, it’s a record number in the ASC setting. So as procedures move to the ASC, they certainly want to use great technology and I don’t think that’s going to slow down. We are going to — every hospital system you talk to has construction plans around ASCs and so I think that’s just an undeniable future trend. Obviously, that takes — it will take time to build out more and more capacity, but we saw that increase in Q4 versus Q3, which increased versus Q2. So it’s just a steady gradual trend and I am talking mostly about hip and knee replacements, but we are also seeing even some spine procedures being done in the surgery centers to shoulders.
And I just don’t think there’s any slowdown, it’s just going to continue over the next few years.
Drew Ranieri: Got it. And then just for Glenn, you talked about the margin expansion for 2023. Could you maybe just highlight kind of what you are expecting for free cash flow generation, 2022 is obviously a tough year? It sounds like inventory will get better in the back half, but just any broad-based thoughts on free cash flow for 2023? Thank you.
Glenn Boehnlein: Yeah. I think as you think about the biggest contributor to cash flow, honestly, it’s earnings. So as we see progressive improvement in earnings throughout the year, I think, we will see that carry over into cash flow. There are some things that were maybe one-offs that we felt that we hope will get better in 2023. That bolus of AR that we had at the end of the year in 2022, obviously, we will collect that and kind of get back to a regular cadence of DSO. And then, finally, as inventory costs moderate and we feel more confident about supply, we will draw down on some of the safety stocks that we had pre-buy. We will also see just lower cost of inventory in raw materials and that should carry over to cash flow, too.
And then the other area that I would highlight that maybe doesn’t get a lot of attention is, we continue to work on our AP and AP days, and we have made incredible improvements over the past two years to three years in terms of working with vendors and pushing AP out to beyond 70 days and we will continue to work on that as well. So I think all of that bodes well for cash flow improvement. But generally, I think, what you will see is as you see progressive improvement in earnings. You will also see cash flow fall out.
Operator: Thank you. Our next question comes from Michael Matson with Needham & Company. You may proceed.
