Chris Cage: Yeah. Good question, Jason. So it does. When we acquired that — the Australian Airborne business, we knew they were kind of halfway through a major investment in the mission management system software capability. We’re continuing that investment. So that will be completed in ’23, but that was fully factored in the valuation of the business. And so that’s elevated for a period of time. Then as you know, I mean, just like the rest of Arbor business, there will be some preventative maintenance, ongoing normal maintenance CapEx that we’ll spend there over time. But think of that as slightly elevated in ’23, just to continue the full development of that capability. And then we’ve got additional CapEx in that number for our U.S. based airborne business as we’re acquiring more capability, fitting it out to run more mission, and we’re optimistic on some bids that we’ve put forward and some more that are in the pipeline there.
Jason Gursky: Great. Thank you.
Chris Cage: Thanks, Jason.
Stuart Davis: Hey, Rob, we’re running a little bit over, but we have time for one quick question.
Operator: Sure. That will be coming from the line of Louie DiPalma with William Blair.
Louie DiPalma: Roger, Chris, Stuart and Gabe, good morning.
Chris Cage: Good morning.
Roger Krone: Good morning.
Louie DiPalma: The success of drones in Ukraine and more recently, surveillance balloons have increased Congress’s focused on unmanned systems last summer, on a $300 million contract to develop a medium unmanned undersea vehicle for the Navy and your unmanned surface vessels Sea Hunter and Shaw have participated in several successful demonstrations. Is there potential, Roger, for some of these Navy unmanned platforms to convert to programs of record or even for Leidos to provide surveillance as a service similar to the cocoa model that you’re doing in the U.S. and in Australia? Thanks.
Roger Krone: Yes. Well, that’s great. I mean Louie, you really are following things well, and I think you really understand our programs. I would add to that, we have some unmanned vehicles that are made of Dynetics. By the way, we have some counter drone programs that we probably exposed to a little bit to when you were down in Huntsville, where we actually have a radar on Jeep and we launch a drone, and it can go — or attack another drone. And so — but we see exactly what you see is the use of uninhabited vehicles under the water on the surface in the air, and we’ll call it in the rare air, up between 60,000 and 80,000 has — first of all, I will tell you that it has been robust. There’s been a lot of work already done. The MUUV is a program of record.
So we won that, that’s a program of record that’s fully funded. The Sea Hunter and the autonomous vehicles in the Navy are not yet programs of record but the Navy is doing a lot of experimentation. They’re doing some things in the Mid-East that have really demonstrated some capabilities. As you have mentioned, we’ve done a lot with Sea Hunter Sea Hawk and Sea Innovator. And we believe there is a strong demand for those. I think for us, on the surface. The next thing for us may not be a full program of record, but they may buy additional vehicles to extend their experimentation, which they can do under an OTA that would happen much faster. But I believe that the Navy is committed to having a significant percentage of their fleet both unmanned and optionally manned.
And our autonomy software and the things that we have demonstrated really set us up well to capitalize on that and to bring them the capability that they need. There are a couple of other programs. There’s MUSV, there’s LUSV that are out there. They are going through their development processes. But to get all the way to the program of record, I think, is years away, but that doesn’t mean that the Navy won’t be spending funds to further their understanding and to experiment with unmanned capabilities, and we would be right in the middle of those activities. So Louie, thanks for the question.
Louie DiPalma: Thanks, Roger. Thanks everyone.
Roger Krone: Yeah.
Operator: At this time, I’ll turn the floor back to Stuart Davis for closing remarks.
Stuart Davis: Thank you, Rob, for your assistance on this morning’s call, and thank you all for your time this morning and your interest in Leidos. We look forward to updating you again soon. Have a great day.
Operator: Thank you. This will conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.
