Allen Mistysyn: And the only thing I’d add to that is, we haven’t called it out. It’s — so it’s not material to the consolidated results. And as you know, it’s split kind of between consumer products, it’s split in industrial within each of those segments, it’s not material. So that’s why we haven’t called it out.
John Morikis: Yes, just sensitive to those that are affected by it, it’s very material. If you think of our sales teams or our customers. Al was exactly right on a consolidated basis. But there have been many of our people that have been forced to work through some pretty challenging times and customers that have been working with us on that. So the materiality on a consolidated basis may not be as impactful as what it is to some of those that are truly impacted by it.
Kevin McCarthy: Appreciate the perspective. Thank you.
Operator: Your next question is coming from Jeff Zekauskas from JPMorgan. Your line is live.
JeffZekauskas: Thanks very much. I was looking at your midrange assumptions on Slide 8. And in it, you assume that prices are, call it, up 5%, which is about $1.1 billion. And if volumes are down 5% maybe the detriment is 550. And SG&A, up mid-single digits is about 300, FX is maybe another 100, but that would be offset by a raw material decrease of 4%. So with these assumptions, why shouldn’t your EBITDA be up $400 million rather than down $150 million at the midpoint. What is it in here that’s really pulling the returns down if prices are really going to be up5%?
Allen Mistysyn: Yes, Jeff, I think what — we went round and round in this about mid-single-digit range because you’re talking at a mid-single-digit range. You’ve got a pretty wide margin. So I would say — at the midpoint, we’re thinking maybe a little bit lighter on the price impact and a little heavier than what you mentioned on the demand side and the volume side. So I think there’s nuance in that, and this is why, to be honest with you, I struggled with laying this out that way because you can interpret it just as you have, if you go to the high end of each of those that are positive and the low end of each of those that are negative, I can get a significantly different results. So to clarify, that’s why I’m saying, in the range in the midpoint, we do expect EBITDA margin expansion and EBITDA growth, it’s just not going to be as significant as you’re talking about.
Jeff Zekauskas: And then for a follow-up, I think you had aspired to a 45% gross margin in the fourth quarter. And maybe you came in closer to 43%. Was it that volumes weren’t as strong as you expected? Or was there a different factor?
Allen Mistysyn: No, I think you’re exactly right. And you’re dead on, excluding onetime and items and acquisitions, we’re probably 43.1%. And it’s really by the missing tag. It’s our highest margin business. It came in below the bottom end of our range. And as John talked about, some of the other segments, PNM, DIY were double digit but below our range. And we also I hate to throw a weather out there, but the last — that snowstorm around Christmas really felt like a lot of people took the whole rest of the year off. Now that being said, we are seeing those sales back in our first quarter in January and our first quarter — start to the first quarter is where our outlook is current…
John Morikis: Yes, the last couple of weeks, it really dampened down and contractors pretty much checked out throughout that. And to Al’s point, as January started, you see them back in the store activities right back where we expected it to be.
Jeff Zekauskas: Thanks so much.
Operator: Your next question is coming from Mike Sison from Wells Fargo. Your line is live.
Michael Sison: Yes. Just one quick question. When you look at the midpoint of your guidance, I think you all said that the first half will be better than second half. So any help in terms of — is volumes kind of flattish in the first half or down a lot more in the second half? And how does that sort of split up in terms of the 8.30. How much more front-end loaded is it than the second half? Thank you.
John Morikis: Yes, Jeff — Mike, I would say from a volume standpoint, we’re expecting and I’ll start with architectural volume. We’re expecting architectural volume and TAG specifically to be up low single digits in the first half and then moderate certainly in the back half. Because when we think about the cadence of new residential and how I have it built into our plan, we’d start seeing a material slowdown as you get midway through the second quarter. That would accelerate into our third quarter. And then even if it’s a shallow slowdown and it starts coming back, like I talked earlier, starts start coming back. We’re not going to see the impact of that until three or four months out. So that’s why it’s a bigger negative impact on our fourth — our second half than our first half.
And as we’ve talked about, as volume goes, our operating margin and operating leverage is driven mostly by that. We expect to see more price in our first half than our second half as we annualize the price increases throughout the year, we’ll see those moderate. And then we also expect to see more of the acquisitions in performance coatings in our first half and the sales and EBITDA incremental improvements there. And then as the July 1 acquisitions annualized, that will be more muted. And then a little bit offset by the way raw materials rolled out. Jim talked about the 4%, low to mid-single-digit benefit it’s a little heavier on our back half than our front half just because even the first quarter, we might be flat or up or down slightly.
Michael Sison: Okay. And any help on the EPS cadence or…
John Morikis: Well, going back to the volume as the first half volume is there, it will flow through.
