Alex Pease: Maybe I’ll take the cash flow comment, and then David can talk about where he’s going to spend it. So look, the biggest delta in the quarter was on CapEx. So if you look sort of €“ it was about $100 million higher year-over-year from CapEx. A lot of that is driven because of the supply chain constraints that we had last year, we were accelerating purchases to get the orders in the system, and now we’re deploying that capital into the system. So, we do feel as though there’s some opportunity to manage that as we get through the balance of the year. The other area where I think we can see some improvement is in working capital. So, as we came into the end of the year, we did see several of our large customers basically just managing their cash flow across the period, and that had a negative impact as well.
So, we think both of those are strong levers we can pull. One of the things I’d point out, as we said in the prepared remarks, for the last eight years, we’ve generated more than $1 billion of free cash flow, and you all have lived through the cycles of the last eight years, including COVID. And so I think we continue to be extremely confident in our ability to generate strong cash regardless of the uncertainty around the profitability and the revenue growth. And David, do you want to talk about the deployment?
David Sewell: Yes, I think it’s consistent with what we demonstrated over the last year, year and a half is we’ll continue to get our leverage in the range that we’ve targeted between 1.75% and 2.25%. And with Gondi came up, we’ll get that paid down fairly quickly. And then with the cash flow generation, we’ll continue with a growing and sustainable dividend. And we’ll be opportunistic in our share repurchases when we think our stock is undervalued.
Phil Ng: Okay, super. Thanks a lot guys. Really appreciate it.
Operator: Our next question comes from Gabe Hajde from Wells Fargo. Please go ahead.
Gabe Hajde: David, Alex, good morning.
David Sewell: Good morning.
Gabe Hajde: I apologize if this has been asked, we joined a minute late. I wanted to ask about this — the disclosure as it relates to economic downtime. And you called it out in your Corrugated operations, which I think historically speaking, we would have associated economic downtime with mill activity. I thought with the new reporting structure that’s sort of been segregated. So, I’m just — was this related to Corrugated operations that we’re also taking downtime, or maybe there’s a transfer effect? I don’t know how to think about that.
Alex Pease: Yes. So, let me take that one, Gabe. So, economic downtime, it is directly related to the mill operations. As we go through our process of dividing up profitability between our Corrugated segment and our Global Paper segment. We basically do that following the transactions. So a portion of the economic impact of that downtime will fall in the Corrugated segment, Packaging segment. And another portion of that will fall into the Global Paper segment. So, that’s why perhaps it’s a little confusing. Previously, when we did that historically, it all would have been blended within the Corrugated Packaging because that’s where it all set. But it did impact our it did impact our Corrugated business. As David mentioned, our consumer business remains strong, both on the Consumer Packaging as well as the consumer side of Global Paper.
So that’s really just as we’re showing you the fully integrated margins by the segment, that’s where you see the split out. So does that help, I hope?
