Peter Arment: I guess just a follow-up quickly. On just the wide-body activity, could you make a comment, Jorge, just on what you’re seeing regarding some of the airlines behavior on the wide-body?
Jorge Valladares: Yes. I don’t think we’ve seen much shift. Again, the opening for China international travel is pretty new. You would logically expect the wide-body usage to improve given those types of routes. But we’re still, again, in the early innings of this.
Operator: Our next question comes from the line of Gautam Khanna of Cowen.
Gautam Khanna: In the past, you’ve sometimes given color on discretionary versus nondiscretionary aftermarket demand. Any color there or by channel distribution versus direct?
Kevin Stein: Yes. I think most of our revenues are on direct sales. In general, we’re seeing good strength and good recovery across all of the individual submarkets.
Michael Lisman: And on the discretionary versus nondiscretionary point, we think consistent with what we’ve said in the past, we’re mostly nondiscretionary when it comes to the commercial aftermarket bucket.
Gautam Khanna: And that’s where you’re seeing kind of the incremental strength is in the nondiscretionary. I’m just curious like…
Michael Lisman: It’s like hard to break it out…
Jorge Valladares: I think we’re seeing strength across the board in all of the submarkets.
Gautam Khanna: Okay. And just curious what you’re seeing in terms of inflation this year from your suppliers? What if — do you have a dollar value you could give to us and how — what you’re doing to offset it with pricing?
Michael Lisman: Yes. I don’t have a specific dollar value to give you. In general, we really focus on productivity. We are seeing inflationary pressures from the supply chains. We’ve got all of our teams have individual decentralized procurement organizations that are doing a nice job working with the supply chain, trying to minimize the level of inflation, and we continue to work the productivity to offset that, and you’re seeing that flow through in terms of the lower cost structures.
Operator: Our next question comes from the line of Matt Akers of Wells Fargo.
Matthew Akers: I wonder if you could elaborate the comment, you could see a further upward revision in the guidance as we go through the year. How much of that kind of uncertainty, is China versus kind of OE build rates or sort of — I don’t know if you can kind of quantify what the biggest buckets of that uncertainty could be?
Kevin Stein: I think it’s probably a big piece from China. But clearly, OEM is not performing where it was prior to the COVID outbreak. So there is room really in all of the market segments for improvement.
Matthew Akers: Okay. Got it. And then I guess on your cash balance, it’s kind of come down from where it was during COVID, but still higher than what we saw a few years ago. How much higher should we expect you to kind of leave that just so you have kind of the optionality in case a deal comes through or something like that?
Michael Lisman: Yes. We’re — obviously, we’re sitting on more than we’ve had historically to your point. We feel good about the M&A pipeline, as Kevin said, and what’s coming, we do have far more than we need to operationally run the business, but it’s something we think about quite a bit just in terms of the capital allocation priorities that Kevin provided and want to make sure we have enough firepower for potential M&A in the current environment.
Operator: Our next question comes from the line of Seth Seifman of JPMorgan.
Unidentified Analyst: This is Rocco Barbara on for Seth. Now that leverage is in the 6x range that has been stated in the past to be the general ballpark range for the company, how do you think about new acquisitions and/or capital deployment moving forward? Also where would you consider returning cash again?
