Sheila Kahyaoglu: Thank you. Good morning, Tom, and Stuart. So, Tom, first one for you, please, and I appreciate your comments in the opening remarks about margin enhancements. What are some of the steps on organizational structure and bottom-line financial discipline you plan to take? Because I was just under the impression that Leidos has pretty good margins, it just could be variable at times. So, where do you see the potential opportunities on the profit margin side outside of the security business?
Tom Bell: I think there is – thanks for the question, Sheila. I think there is a slight reset in the culture that I’ve enjoyed putting out there, which is treating Leidos’ money as if it’s our own. And as a result, Chris and I both talked about indirect spend and just tightening our belts a little bit and being a little bit more prudent with some of the indirect spend that is in any big bureaucratic organization. The reorganization I refer to is a tuning exercise. It’s not a fundamental reset of Leidos. But I do think it will add to the bottom-line because as Leidos has grown dramatically over the last five years, we’ve bolted on and fit in some of those acquisitions such that there is replication and duplication of capabilities in different parts of our current value stream.
And I think there is opportunity for us to bring those capabilities together, better bottle repeatability for customer solutions in some of those businesses, simplify the organization, promote better operational excellence around delivery for customer expectations, certainly speed up decision-making. And again, very key, align the organization around the key technology differentiators that set Leidos apart and define who we are in the markets that we serve. So, again, this isn’t fundamental reset. It’s a tuning exercise to take advantage of the inorganic plays that have been made, rationalize the organization toward those goals, and then incentivize teams to actually deliver against very crisp goals for those businesses. Chris, anything to add?
Chris Cage: Yes, no, Sheila, I would echo that. I mean, clearly the primary objective here isn’t to organize to drive costs out of the business. That’ll be a second order variable. And we always try to run lean, so that’ll create some opportunity to reinvest. We’re hopeful, but back to your question, where are the margin opportunities? Obviously, super pleased with Health moving up a bit from what we had set as an expectation. You see what’s possible within the Defense Solutions segment of the business. I think some of that will come down to selectivity. The teams will be more focused on which opportunities they have the ability to earn a quality return on. And so, we’re very optimistic that that’ll pay dividends as we move into 2024 and beyond.
Sheila Kahyaoglu: Great. And then Chris, one more specific one on Health. Yes, I thought the merchants were very good at 17%. I think you mentioned a new incentive calculation on the VBA work. Can you provide additional detail around how we might think about that opportunity going forward, and how do we think about the wind-down on the single wave at DHMSM impacting profitability in the second half?
Chris Cage: Yes, thanks, Sheila. So, on the incentive side, again, this was a change that went into effect earlier this year. So, we’re working through it and we’ll have more to say as we learn more. But I would tell you that the incentive structure at the VBA was optimized from their point of view for all participants in order to better serve the veterans and to deliver better outcomes for VBA. And it gives contractors like Leidos the opportunity to invest, to drive quality outcomes, better throughput, better patient experience, and be recognized and compensated potentially for those outcomes. So, that’s just getting started and that creates an opportunity where we’re a bit more optimistic that if we perform the way we have in the past, and you have to earn it every quarter that the mid-teens margin has some upside to it that we previously communicated.
