Thank you, Crystal, and good morning, everybody. Welcome to Corning's fourth quarter 2022 earnings call. With me today are Wendell Weeks, Chairman and Chief Executive Officer; Ed Schlesinger, Executive Vice President and Chief Financial Officer; and Jeff Evenson, Executive Vice President and Chief Strategy Officer. I'd like to remind you that today's remarks contain forward-looking statements that fall within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially. These factors are detailed in the company's financial reports. You should also note that we'll be discussing our consolidated results using core performance measures, unless we specifically indicate our comments are related to GAAP data. Our core performance measures are non-GAAP measures used by management to analyze the business. For the fourth quarter, the difference between GAAP and core EPS stemmed primarily from restructuring charges as well as non-cash mark-to-market adjustments associated with the company's currency hedging contracts and foreign debt. In total, these increased core earnings in the fourth quarter by $256 million. As a reminder, the mark-to-market accounting has no impact on our cash flow. A reconciliation of core results to the comparable GAAP value can be found in the Investor Relations section of our website at corning.com. You may also access core results on our website with downloadable financials in the Interactive Analyst Center. Supporting slides are being shown live on our webcast, and we encourage you to follow along. They're also available on our website for downloading. And now I'll turn the call over to Wendell.

Thank you, Ann, and good morning, everyone. Today, we reported our financial results for the fourth quarter and the full year of 2022. The pandemic continues to affect the global economy, but we have managed to grow sales and advance our strategic initiatives while dealing with the challenges to margins and cash generation that the current environment presents. In the fourth quarter, we achieved sales of $3.6 billion and earnings per share of $0.47, both at the high end of our projections. For the full year, building on our strong performance in 2021, we grew sales by 5% to $14.8 billion and earnings per share by 1% to $2.09, with a gross margin of 36% and free cash flow of $1.24 billion. I'm pleased with our sales growth despite facing what is largely recession-level demand in markets that represent roughly half of our sales. Key products such as cars, televisions, smartphones, laptops, and tablets are all performing below what we consider to be normal demand levels. We have managed to counter this weak consumer demand through our strong positions in the optical communications and solar markets, as well as by outperforming the broader markets. However, our profitability and free cash flow remain below our expectations. Therefore, I want to take a different approach in our discussion today, focusing on the external factors impacting our financial results and what actions we are taking to respond to these challenges. Since 2020, we have faced a variety of pandemic-related impacts, including supply chain disruptions, reduced productivity, fluctuations in consumer spending, and inflation. Our top priorities when the pandemic struck were to protect our workforce and meet our customers' needs. Throughout 2022, we maintained higher staffing levels and increased inventory to address uncertainties. Ongoing and unpredictable inflation has raised costs for raw materials, production, shipping, and inventory. Consequently, our profitability and cash flow growth have not kept pace with our sales growth. Although we made progress improving profitability and cash flow during the first half of the year, we recognized the need for further actions. In the fourth quarter, we implemented additional significant measures, including raising prices in optical communications and life sciences to better manage inflation costs with our customers, adjusting our productivity metrics to align more closely with historical standards without compromising our supply capacity or future growth, and normalizing our inventory levels. Given enhancements in our productivity and supply chains, we anticipate maintaining reliable supply for our customers at current or lower inventory levels. These actions are expected to enhance our margins and cash flow throughout 2023. As indicated in our press release, we anticipate that our first quarter sales and profitability will differ from historical norms. Typically, first quarter sales decrease about 5% sequentially, and margins drop by 1 to 2 points. This year, we expect a more significant decline in first-quarter sales compared to the usual seasonal pattern, while our margins should increase due to the benefits we have implemented. Our outlook for lower first-quarter sales is primarily driven by developments in China, where consumer sentiment was already weak. Following China's change in its pandemic approach in December, there was a significant surge in COVID outbreaks, leading to reduced consumer spending and workforce shortages that impacted the demand for our products, especially in the Display, Environmental, and Specialty Materials sectors. We anticipate that China will overcome these challenges and that demand will eventually improve, but it remains too early to predict the timing of recovery in consumer sentiment and demand. We will keep you updated as more information becomes available. In the meantime, we are well-positioned to pursue growth and foster innovation. As our sales grow, we expect to benefit from operating efficiencies, leading to improved profitability. Although it’s premature to speculate on a recovery in China, I can share a few insights. First, our first quarter sales do not reflect our anticipated run rate for 2023. Second, I would be disappointed if we do not see sequential sales growth in the second quarter and year-over-year growth in the second half of the year. Lastly, we expect the positive effects of our measures in the fourth quarter to significantly enhance our performance throughout 2023. As consumer demand rebounds and our revenues rise, we anticipate an increase in profitability. After sharing our near-term perspective, I want to reinforce our confidence in our focused portfolio and long-term outlook. Despite the prevailing uncertainties, we are capturing a strong set of long-term growth opportunities across all our markets, with more to come. In Optical Communications, we built on a record $5 billion in 2022, and we believe we are still at the beginning of a multi-year build cycle propelled by broadband, 5G expansion, and cloud computing. Demand for cable and fiber remains particularly strong; we could sell more if we could produce more. In solar, we are capitalizing on significant growth within the renewable energy sector and see excellent potential as we contribute to a sustainable, U.S.-based solar supply chain and benefit from the Inflation Reduction Act. In the display sector, we have maintained stable prices and a robust market position throughout the industry correction. We expect to emerge from this correction with strengthened customer relationships, improved manufacturing capabilities, and increased sales and profits. Within mobile consumer electronics, we foresee continued strong adoption of our innovations and anticipate outperforming our markets through our product leadership and collaboration with industry leaders. In the automotive sector, we have consistently outperformed the market amidst industry constraints. We remain dedicated to expanding our $100 per vehicle content opportunity and are encouraged by our progress, evident in our growth in Automotive Glass Solutions for 2022. We are poised to capture further growth as technology adoption increases and car sales recover. In Life Sciences, our focus is on delivering unique tools that support the development and delivery of cell-based therapies and modern pharmaceuticals. Our operations are improving as the industry recovers from COVID-related demand fluctuations. I've discussed the macro uncertainties we face in the near term and our strategies to mitigate those uncertainties, along with the substantial long-term growth opportunities we are pursuing. Our achievements thus far demonstrate our potential for continued success. Reflecting on our 2020 to 2023 strategy and growth framework introduced in 2019, our goals included a sales growth rate of 6% to 8%. From 2019 to 2022, we achieved over 8% CAGR, despite the ongoing external challenges. Throughout the past four years, we have advanced critical strategic initiatives, including delivering essential fiber-to-the-home and data center solutions that have spurred significant growth in optical communications. We have capitalized on our automotive gasoline particulate filter content opportunity and introduced ceramic shield technology with Apple, contributing to our strong performance in sluggish end markets. We have optimized our Gen 10.5 plants for glass production for large televisions and made significant strides in our emerging innovations. We have gained substantial momentum in our Automotive Glass Solutions business, and our pharmaceutical packaging portfolio has played a crucial role in addressing global health needs over the past three years, with our products supporting over 8 billion COVID-19 vaccine doses across more than 50 countries. In summary, we have achieved sustained sales growth against a challenging backdrop, reinforced our leadership across markets, and set the stage for future expansion. These accomplishments are noteworthy. To conclude my remarks, here’s what I want to emphasize. Since the pandemic began, we prioritized the safety of our employees and successfully fulfilled our commitments to our customers, as evidenced by our sales growth. We have undertaken significant additional steps to enhance our profitability and cash generation. The evolving situation in China will impact our short-term sales, but we believe the effects of our recent pricing and productivity measures will become apparent in the first quarter. Overall, we will persist in managing our businesses effectively while adapting to the current landscape and simultaneously advancing growth initiatives and capabilities that ensure our success as the global economy stabilizes. Our strategically focused and cohesive portfolio demonstrates resilience, which is reflected in our results, even in challenging conditions. We are confident in our capacity to achieve sustainable, multi-year growth alongside improved margins and cash generation. Now, I'll turn the call over to Ed for a detailed overview of our financial priorities, results, and outlook.

Thank you, Wendell. Good morning, everyone. Building on last year's strong performance, we grew full year sales 5% to $14.8 billion and EPS 1% to $2.09. We outperformed our consumer-facing end markets, we continue to capture growth in solar and we delivered record sales of $5 billion in optical communications. In total, we had a solid year, and our results reflect our resilience in the face of ongoing external challenges. As you heard from Wendell, our profitability and cash flow have lagged our strong sales growth. To address this, we took further actions, including raising prices again in Optical Communications and Life Sciences to more appropriately share the inflationary costs with our customers, adjusting our productivity ratios closer to historical metrics without impacting our ability to supply and capture future growth and reducing inventory by $115 million in the fourth quarter. We will start to see the benefits of these actions in the first quarter despite suppressed sales from the disruption and low consumer sentiment in China that Wendell described. With that, I will turn to our fourth quarter performance. Sales in the fourth quarter were $3.6 billion and EPS was $0.47, both coming in at the high end of our guidance. Fourth quarter gross margin was 34%, down 250 basis points sequentially. And operating margin was 14%, down 290 basis points sequentially, both including the impact of reducing inventory. EPS was favorably impacted by $0.03 due to a tax adjustment. Through the third quarter, our estimated tax rate was 20.5%. Our actual 2022 tax rate was 19.3%. The required adjustment resulted in an unusually low 15% core tax rate in the fourth quarter. Now let's take a closer look at our segment results for the fourth quarter and full year, beginning with Optical Communications. Fourth quarter sales were $1.2 billion, down $122 million sequentially, reflecting the slower pacing of customer projects that we discussed on our last call. Net income was $130 million, down $53 million sequentially on lower volume and the impact of reducing inventory. The strength of the first 3 quarters of 2022 drove annual sales to an all-time high of $5 billion, reflecting a 15% increase, while net income grew 20% year-over-year to $661 million. Moving to Display. On our last call, we said we believed panel maker utilization had reached bottom in September, but it was too early to call the timing or the shape of the recovery. We were then very encouraged to see panel maker utilization levels climb in October and then again in November, indicating a recovery had begun. However, in December, China reopened and a significant wave of COVID outbreaks ensued, panel maker utilization leveled off in December and has since decreased in January. We believe that panel maker utilization will resume its recovery. In January, panel makers are operating below the current reduced rate of demand. I'll cover more on our Display outlook in a moment. Display sales in the fourth quarter grew 14% sequentially to $783 million. Net income was $171 million, up 28% sequentially on strong execution and the additional volume. Fourth quarter glass price was consistent with the third quarter as expected. For the full year, sales were $3.3 billion and net income was $769 million, both down year-over-year, reflecting the impact of the industry correction in the second half. Glass price for the full year was consistent with 2021. We anticipate glass price in the first quarter of '23 to be consistent with the fourth quarter, and we expect the favorable glass pricing environment we experienced over the last few years to continue, driven by 2 factors: first, glass makers continue to align supply to demand. Corning and other glass makers have been taking additional tanks offline for maintenance and repairs after an extended period of glass tightness. As we've told you before, we are taking this opportunity to upgrade our fleet with the latest technology, and we are actively managing the timing of tank restarts to align our supply to demand. Another factor is glassmakers' profitability. It is challenging for glass makers who have high fixed costs to maintain profitability during this period of low volume and high inflation. We have maintained stable price and market position through this industry correction, and as demonstrated in the fourth quarter when the market recovers, incrementals from our increased volume will be meaningful. In Specialty Materials, fourth quarter sales of $505 million were down 3%, but we outperformed our markets driven by customer product launches and continued strong demand for premium glasses and advanced optics products. Full-year sales were $2 billion, flat year-over-year. Gorilla Glass sales were down 5%, outperforming the smartphone market, which was down 11% and IT market, which was down 15%. Advanced Optics grew sales 12% driven by the strength of our next-generation semiconductor equipment materials. Full-year net income was $340 million, down 8% year-over-year due to continued investment in next-generation materials for consumer electronics and semiconductor equipment, as well as new markets, such as bendable devices and augmented reality. In Environmental Technologies, fourth quarter sales were $394 million, up 12% year-over-year, and net income was $69 million, up 28% year-over-year. Sequentially, fourth quarter sales were down 7%, impacted by a decline in China OEM production levels in December, driven by similar COVID dynamics I mentioned in Display. Full-year sales of $1.6 billion were flat versus 2021 as light and heavy-duty markets in China remain weak and global auto market growth was restricted. Net income for the full year increased 9% to $292 million as we improved our productivity and raised prices. Turning to Life Sciences. Fourth quarter sales were $294 million, down sequentially and year-over-year, impacted by lower demand for COVID-related products. Fourth quarter net income was down, driven by lower sales and the impact of reducing inventory. Full-year sales of $1.2 billion were consistent with a strong 2021, while net income was $153 million, down 21% as the unexpected shift in demand away from COVID-related products led to a significantly lower productivity in our manufacturing operations. And finally, in Hemlock and emerging growth businesses, sales in the fourth quarter were $462 million, up 22% year-over-year and 14% sequentially. And full-year sales were $1.7 billion, up 34% year-over-year, reflecting strong demand for polysilicon as we continue to see robust demand for both semiconductor and solar-grade polysilicon. We also saw strong growth in Automotive Glass Solutions and Pharmaceutical Technologies. To close out my segment recap, we're pleased that our more Corning approach and secular trends in optical and solar enabled us to grow sales and outperform our markets. Turning to our outlook. We maintain an attractive long-term trajectory and are well positioned to capture growth. Looking at the near term, typically, in the first quarter, our sales declined about 5% sequentially and margins declined about 1 to 2 points. This quarter, we expect a sequential sales decline of 6% to 11%. In contrast, with the recent price and productivity actions we've taken, we expect about a 1- to 2-point margin improvement in the first quarter. In total, for the quarter, we anticipate core sales in the range of $3.2 billion to $3.4 billion and EPS in the range of $0.35 to $0.42. Our first quarter sales outlook reflects the current dynamics in China since COVID restrictions were lifted in December. The situation has impacted consumer sentiment and labor availability, which is playing out across some of the industries we serve. For example, in Display, as I mentioned, we saw panel maker utilization decline in January back to October levels. With that, we now believe the display industry recovery has been delayed by at least a quarter. And in environmental, we expect the lower OEM production levels we saw in December to remain in the first quarter. We will have a better feel for the situation in China after the Lunar New Year, and we'll share more with you as we go through the quarter. As a reminder, the first quarter is usually our lowest volume quarter of the year. So we expect sales to grow sequentially in the second quarter. And I'll also note that we expect 2023 full-year capital expenditures to be consistent with 2022. Before I close, I want to cover 2 other topics. First, I want to take a minute to address currency exchange rates. As a reminder, we have actively hedged our foreign currency exposure over the past decade. This serves as an effective tool to reduce earnings volatility, protect our cash flow, enhance our ability to invest and protect shareholder returns. Our largest exposure is the Japanese yen. As we've previously shared with investors, we have most of 2023 hedged. We now also have most of 2024 hedged. We expect to keep our core rate at 1-0-7, at least through the end of 2024. We're very pleased with our hedging program and the economic certainty it provides. We've received more than $2 billion in cash under our hedge contracts since their inception. Second, as CFO, in addition to investing for organic growth, my top priorities include maintaining a strong and efficient balance sheet and returning excess cash to shareholders. Examples include creating one of the longest debt tenors in the S&P 500. Our current average debt maturity is 25 years, with only $1 billion in debt coming due in the next 5 years and no significant debt coming due in any given year. And our interest rate exposure is very low because essentially all our debt instruments are fixed rate. Additionally, over the last 4 years, we have consistently returned excess cash to shareholders even throughout the pandemic, and one of the ways we do that is through dividends. We have grown our dividend 35% since 2019, and we have increased our dividend for 12 consecutive years. Our dividend yield is top quartile in the S&P 500 at 3%. As we enter 2023, we will recommend that our Board approve an increase in the quarterly dividend, raising the annual rate from $1.08 to $1.12 per share. Stepping back, our long-term growth drivers all remain intact. As markets recover, sales growth will resume and we're well positioned to continue capturing growth tied to key secular trends, such as optical and solar. In the face of ongoing macroeconomic challenges, we grew our sales 5% in 2022 and delivered a CAGR of greater than 8% since 2019. We have adapted to meet near-term needs, taking actions throughout this period. And while our profitability and cash flow have been impacted, we expect to see the benefits of additional actions we took in Q4, in our Q1 results and throughout the year. With that, I'll turn it back over to Ann for Q&A.

Thank you, Ed. Crystal, we're ready for our first question.

I have one for Ed, one for Wendell. Ed, you said your core rate will be 107 through 2024, but I would imagine your transactions are increasingly happening away from this core rate. How should we think about the impact of the yen as we think about 2023 and 2024 if the hedge rate is significantly away from the core rate? And for Wendell, can you talk about Corning's role in both bendable and augmented reality since Ed mentioned it in the script? I'm kind of curious on the technology that you're bringing. And b, any thoughts on commercial availability for these products, particularly by flagship customers?

Yes. Wamsi, this is Ed. I'll take your yen question first. So just for clarity, our hedges are actually close to our core rate in '23 and 2024. And we have most of our exposure hedged, and that's why we expect to keep our core rate at 107. With the recent strengthening in the yen in December and January, we were able to put more hedges in place for 2024.

Thank you for your question regarding bendable and augmented reality. For bendable, we have two key opportunities. One is that we are fairly advanced in producing the mother glass used to manufacture bendable displays, which actually requires more glass than a typical LCD. The second major focus of our new innovation investment is on developing the cover material for bendable devices. This initiative has resulted in many of the bendable products available today. However, we don’t believe this technology fully meets customer needs yet. Therefore, we are working on a series of new innovations to help make this technology more mainstream rather than just a novelty. This endeavor will continue over the coming years, and we expect to introduce new products in this area. In augmented reality, we are focusing on two main efforts. One has been impacted by COVID, and I won’t go into further detail on that. Additionally, we are involved in producing materials and sometimes wave guides that create the digital light field in front of users’ eyes. We have substantial initiatives in both areas, and while augmented reality is still an emerging industry, it holds significant promise for the future.

My first question is about the guidance. Can you discuss the sequential growth in EPS? It seems that when adjusting for the tax benefit, EPS is expected to decline more sequentially compared to core revenue. Is there anything else we should consider regarding OpEx, keeping in mind that gross margin is likely to improve sequentially?

Martin, I'll take that one. No, I think actually, our margins, both gross and operating margin, should improve sequentially in the guidance we've given you. Obviously, we've given a range for both sales and earnings per share. And you're right, if you adjust for the tax rate, it's actually a reasonable level of incrementals on the lower sales. Remember, sales are going down 6% to 11% sequentially.

So Martin, yes, I think you're doing your math correctly. You're seeing a pretty significant increase for us in our profitability at both the gross and operating margin lines and somewhat muted by the delta in tax rate from quarter 4 to quarter 1. I think you've got it. The bulk of our current revenues are in the interior set of products. The growth rate is highest in our exterior. What’s – you’ve seen all the trends on the interior with these very large curved displays being introduced in more and more products. And when that happens, that is by and large us with our patented ColdForm technology. But as well, especially with electric vehicles, because they are so quiet, you experience them as noisy, at least the outside world is more noisy. And so as a result of that and the amount of energy it takes to maintain the HVAC system within an electric vehicle, we’re seeing the adoption of laminated technologies beyond the windshield in sidelights, rooms, backlights. And quite often, that is leading to the adoption of one of our new technologies, which we pair with Gorilla to create a unique laminate structure that is both performance, weight and cost advantage. And we’re seeing very nice take-up of that as well.

I actually had a question or a 2-part question on display. I know you outlined your thoughts around display and the lower panel maker utilization you're seeing in 1Q. Could you just give us a bit more color on sort of what are the range of sort of volume changes you're expecting sequentially into 1Q? What sort of typical seasonality there in terms of volume? How much of a difference or variance to the normal seasonality are you expecting in display in 1Q? And sir, the second part to that, I know you outlined China consumer spending as a sort of a watch point here, but any thoughts on TV sales or TV unit sales for the year, even if it's markets outside of China at this point?

Samik, let me make sure I understand your first question. I understand your second one. So you're asking how we expect to see beyond quarter 1 in panel maker utilization within the quarter? To address your first question, I want to provide some context by reflecting on Q4. In our last quarterly call, we mentioned that panel maker utilization reached its lowest point in September, but it was premature to determine the timing and pattern of the recovery. However, as we entered Q4, there was a noticeable increase in panel maker utilization in October, followed by another significant rise in November. Our models indicated that the combination of this data, along with panel price increases and industry order behavior, signified that a recovery was in progress and would continue to trend upwards, considering seasonality adjustments, throughout Q1 and this year. In December, when China altered its pandemic approach, we observed that panel maker utilization leveled off instead of continuing to rise. Looking at January, it seems that utilization has reverted to levels comparable to those in October, suggesting that the recovery could be pushed back by a quarter when adjusted for seasonality. This connects to your question about retail, as we anticipate growth in panel maker utilization throughout the year. As Ed mentioned, the production rate is below even the low set demand observed in the end market. Consequently, we expect to see the retail market improve as the year progresses. Even with a relatively flat set demand year-over-year, the current state of panel maker utilization could still lead to substantial growth for us at the glass level.

I wanted to talk about Hemlock, which was an outperformer this quarter. Wendell, can you talk a bit about the long-term opportunity that you see for polysilicon and sort of the trajectory, especially with the IRA? And then Ed, maybe could you talk about the margin potential for this segment? Because I would assume there's a fair amount of scale leverage that's there as you're able to utilize some of the excess manufacturing capacity that you have?

So our goal, Shannon, we'd like to build about $1 billion solar business for us here at the company, and it could take a variety of different product forms. It's too early right now for us to make any specific announcements. But given the IRA, we see many opportunities to both grow and enhance the profitability of this business.

Again, Shannon, I would add 2 things. One, sort of Hemlock's overall gross margin is similar to our corporate average in the same zone sort of in normal circumstances, half the business or more is semiconductor and you've got solar, right? So you've got those both product sets in there. That's all within our Hemlock and emerging growth segment. And then the second thing I would add is that we have added solar capacity which was, as we described, very inexpensive capacity because it was previously mothballed. We were able to turn it back on. As we think about the next phases of growth, there may be some costs to do that and there may be just some impacts to gross margin as we go along that journey. But in the current state it's in, think of it as around the average for Corning.

I was just wondering if you can maybe explain the productivity ratio improvements or the adjustments that you talked about in terms of what kind of costs were involved and what exactly you were doing there from both a near-term standpoint and what it implies for your ability to maybe control your own destiny on the cost side should end markets remain tough this year?

Yes, thanks, Steve. Maybe the way to think about it is as we talk about what our priorities were through the pandemic, one of them was serving our customers. And we disproportionately erred on the side of being able to do that, right? In the beginning, when inflation was coming in, we made sure that we got our customers what they needed over time; we were able to raise prices and offset that. And similarly, in the production space, we did whatever we needed to do to ensure that we have the products available to ship to our customers in a very difficult supply chain environment in a very difficult pandemic environment where being able to staff your factories, have all the materials you need and be able to make the products you need was very difficult over this sort of long sweep of time starting in '21 and running through the end. So we've been able to improve the way we operate, improve our yields, improve our staffing levels and in some cases, take some adjustments and realign our capacity allow us to get back to what we would consider to be our benchmark or our historical productivity metrics. So making sure we have the right output at the right cost at every level in all of our factories. That's our objective. We're not completely there yet, but we've taken a lot more action in the fourth quarter, and we've made a significant amount of progress that will improve our cost and therefore, improve our gross margin. Well, I think longer term, it almost if you think about it gets us back to being able to operate like we did pre-pandemic, right? Pre all of the supply chain disruption, we are humble, at least I will be humble here that we have been surprised by a lot of things, including this recent change in the way China has operated during the pandemic, which clearly impacts us and our customers and our suppliers. But putting that aside, I feel like we now are able to run more like we did pre-pandemic levels, which then allows us to grow as our demand comes back and our margin should get back closer to our historical levels.

I was just curious in specialty. Is there a way to think about the pace of new content wins over this next year? So you shared you grew almost 10 percentage points greater than the market in '22. How would that metric look in '23 based on what you know now?

We have a number of significant new content, new value-added products that will begin to be introduced for upcoming model launches. So we would expect to have sort of a more Corning dynamic happen again. Now the actual degree of overperformance will really depend upon the success and pace of adoption of those new innovations. So I'd like to see both how our product does add sort of our customers' unique products using this technology does before I would characterize a specific numeric level of outperformance.

Yes, Josh, regarding inflation, we have been surprised mostly in a negative way about the input costs for running our business. Things have improved a bit as we enter the latter half of the year, and our price increases are helping us approach a neutral position as we move into 2023. Energy costs are still high compared to levels before the pandemic, as are many other expenses. Although the inflation rate has slowed and even decreased in some instances, we are not back to pre-pandemic input cost levels. Energy is definitely a factor to monitor, but I don’t have anything specific to highlight as we approach 2023.

I believe we've made significant progress with the actions taken in the fourth quarter. We have managed to catch up with the inflation experienced, which contributes to the improvement in our profitability in the first quarter compared to the fourth quarter. However, we still have work to do regarding our ability to predict upcoming inflation trends and to stay ahead. Our supply chain team is actively working on this, but there's still room for improvement.

Yes, I'd like to ask kind of a 2-parter on the optical coms business. First, kind of on the revenue side. It felt like last quarter or through the quarter, it was mostly like one large carrier that was part of the weakness. Now it seems like it's a little more distributed. It looked like enterprise was kind of weak in the quarter, and a lot of folks are worried about cloud spending into next year. So can you just talk a little bit about kind of the maybe enterprise telco mix there or how you see the dynamics differently in those 2 markets? And then secondly, obviously, profitability was weak in the quarter. Could you talk about that? Is that just component cost or is there something else going on? There's a pretty big dip in profitability there.

I believe it might have been perceived by other industry players as just one participant influencing the market. However, I've always maintained that within the carrier space, several carriers have been pacing their projects and managing their supply chains in various ways. There has certainly been significant activity in the cloud sector as well, but overall, we still view this as primarily a carrier story. We anticipate navigating through this as we enter the first quarter and subsequently benefiting from higher demand levels for the remainder of the year.

Yes. And I'll take the cost one or the margin one, profitability one. I think Opto is a good example of sort of all of the things we've talked about, inflation impacting the segment significantly, productivity levels impacting the segment significantly. Those things are depressing margins in optical. And the fourth quarter volumes also came down, and we also took inventory down in the fourth quarter in optical. And all of those things impacted our margins. So it's sort of a good example of all the things we've talked about. However, on the positive side, the actions we've talked about significantly impact optical as well. So as we go into 2023, that's a place where we would expect to see profitability improvement.

Just 2 if I could. One, maybe bigger picture. As we think about maybe a slower start to the year, EPS, I think, is implied to be about $0.38 at the midpoint in 1Q. Is there any framework to use when thinking about the trajectory for EPS in 2Q onwards? And really what I'm getting at is any visibility you have towards when you get back to maybe a $2 a share sort of annualized EPS run rate? And then maybe just a follow-on to the last question. On Optical, have you seen any inflections or resumption of activity in 1Q? And then maybe when you would anticipate a more meaningful bounce back this year?

So to the first question, what we've tried to do with our profitability actions is that to have that sort of run rate in EPS that you're talking about, that's a $2 run rate to be when we hit revenues that are like quarter 4, sort of 3,6, 3, 7 level. That's when with our actions on productivity and pricing that if they are effective, which we believe they are. Then, at that revenue level, that's when you should expect that type of EPS level. That's the way we're thinking about it, and that's the way we're modeling it. Did that answer your question, sir? Quarter 1 is not the right time to discuss optical. Let's wait another month or two, and we should be able to give you a clearer picture. We're in close contact with our customers, monitoring their activities and having frequent discussions about their project timelines. We have just implemented the most significant price increase I've seen in over 30 years in the optical communications field, and we executed it successfully. This reflects the strong planned demand in our business.

But regarding free cash flow, Ed, I know there have been many questions about revenue, sales, and margin improvement. Can you provide some insight on cash flow and your adjusted free cash flow after the levels in 2022?

Yes, sure, Asiya. I mean I think on capital, I shared our view that we expect to hold CapEx similar in 2023 as we did to 2022, and that was sort of similar to the prior year as well. And I think what you saw in 2022 that really impacted our operating cash flow the most was the inventory build. We built about $500 million of inventory in the year. So obviously, that negatively impacts our operating cash flow. Our goal is to make inventory go the other way. We made a small step in the fourth quarter here. And even not building inventory, just holding inventory flat helps our cash flow going forward. So our goal is to make our operating cash flow go up, keep our CapEx flattish, and so that should make free cash flow go up. But we've got work to do to be able to do that, and it's primarily in the inventory space. I'm not going to provide specific guidance, but I want to emphasize that our main focus is on investing for organic growth, which we will continue to prioritize. We see significant opportunities ahead, and boosting our operating cash flow is our top priority. Additionally, we plan to return cash to shareholders, as outlined in our dividend strategy. Share buybacks are also crucial for us. As a reminder, we completed a substantial buyback in 2021 due to Samsung's conversion of their preferred shares, repurchasing about 4% of our outstanding shares, which we are still managing the financial implications of. We have one more payment related to that scheduled for April 2023, after which we expect to have more flexibility. Buybacks will continue to be an important part of our financial strategy.

Thank you, Ed. Crystal, I think we're out of time. So I'm just going to shut us down for today. And I want to thank everybody for joining us. Before we close, I want to let you know that we're going to attend the Susquehanna Financial Group 12th Annual Tech Conference on March 2. And on March 7, we'll be attending the Morgan Stanley Technology Media and Telecom Conference. Additionally, we'll be hosting some management visits to investor offices in select cities. And finally, a web play of today's call will be available on our site starting later this morning. So once again, thanks for joining us. Operator, that concludes our call. You can disconnect all lines.

Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.