But what we saw from an average rate in 2022 was about just shy of 3%. But that was increasing throughout the quarters. And in the fourth quarter, it was just shy of 5%. I would say that if you look at fourth quarter interest expense, that would be a good proxy for 2023. And just based on kind of how we’ve hedged and fixed out a portion of the debt. Our guidance does assume a moderate increase in the underlying rate. Now if it does something different than that, we will go back to you.
Steve Ferazani: Okay, that’s helpful. Thank you. I do want to get back to the sales guidance, the 3% to 7%. I’m trying to think about how much of that is pricing €“ do you have a mix there?
Fay West: Yes. I think if you just and Dave, I’ll start and you could just jump on. I think if you look at just our midpoint of our guidance range, it’s about a 5% year-over-year increase in organic sales. And the way to characterize that is about 20% of that we think is coming from volume and about 80% of that is coming from price.
Steve Ferazani: Perfect. So what obviously, the expectation was we would see the gross margin pick up here in the fourth quarter. So you fully realize some of these price increases. But as you noted, there is still some older priced backlog, which you’re working through. Do you have any sense what that margin might have looked like without the older priced backlog and how you’re thinking about margins? Because you’re getting €“ you’re really starting to make that move back to more historical levels. I’m just trying to see how you get there given the fact that you have almost a quarter of backlog still built in there or more.
Dave Huml: Yes. We didn’t model the quarter on the margin impact from incoming orders versus backlog. We just didn’t model it. Obviously, the more a backlog is sitting prior to one, two or three price increases and so on. But the fact that we’re not working backlog in a fight all manner makes it really difficult to track what the impact was versus would have otherwise been. I have to say we’re encouraged by that we’re still getting strong price realization. So we’re encouraged by that. We’ve got our price increases largely published. €“ few spots in the world are still yet to publish, but major geographies we published. And we’re getting good stick rate, good realization. So it’s really credit to our selling organizations around the globe as they are doing a fantastic job selling in multiple significant price increases over the year and making sure that we get paid back for the value we’re delivering and also the inflation that we’re feeling in the business.
Fay mentioned, we’re counting on about our growth for 2023 is roughly 80-20 between price and volume. It will be interesting, and we’re monitoring closely not only order demand patterns, but also price realization as inflation moderates and our planning assumption is that largely speaking, inflation will moderate and so we’re monitoring whether our realization sticks at the same rate that we’ve been able to achieve kind of coming through 2022. But our guidance does imply some expansion of our gross margins. We don’t guide on gross margins obviously, it’s embedded in our guidance.
Lorenzo Bassi: Maybe building on what Dave said, if you look, Steve, at the over €“ broadly over the course of €˜22, while we occurred inflation with our price realization from a margin standpoint on a full year basis, it was actually diluted from a rate standpoint. However, if you look at Q4, you start to see more of those price adjustments to significantly cover inflation largely for margin at 39.6% was over the average by about more than 100 basis points over the average over the first three quarters. So that can kind of give you an indication of how we’re going into 2023.
