Jay Malave: It’s a good question. If you look at just the profile with this incremental authorization that we have, the way we’re looking at it is $6 billion here in 2023, $4 billion in 2024 and then essentially $3 billion in ’25 and $3 billion in ’26, which puts us equal to free cash flow in that ballpark, assuming kind of a $6 billion placeholder offer free cash flow in those given years. And so that’s the way we’re viewing it, Rob. So over time, over the next few years, it will revert back to more of a 100% of free cash flow. But again, we’ll look at it year-by-year. As you’ve seen in the last two years, we did increase it here in the fourth quarter, and we’ll continue to evaluate those opportunities as they present themselves, the reality of what happens with actual pension funding, what progress we make in our working capital reduction initiatives and all those will go into the mix master and provide the inform what we formally do in any given year.
Operator: Thank you. The next question will come from the line of Richard Safran from Seaport Research Partners. Please go ahead.
Richard Safran: Thanks. Jim, Jay, Maria, good morning. How are you?
Jim Taiclet: Good morning.
Richard Safran: So if we take an optimistic scenario here on what happens with the budget outlook, I wanted to know if you could discuss the 2024 bookings and the opportunity set both classified and unclassified. Again, if we assume no shutdown and we assume to get funding, I’m interested in what the major competitions are next year is, what was – how you see backlog growth and the book-to-bill is better than 1?
Jay Malave: Richard, we’ve got a pretty decent line of sight to continuing growth in our backlog. There’s a lot of activity happening in classified, which I can’t speak to specifics about, but we do see some award decisions next year there. We’ll continue to see orders strength in MFC over this time period. And we’ve talked about orders between 2023 and 2027 of $10 billion. We have not seen all of those orders come to fruition yet. So we would expect those to be continued opportunities for us. We’ll continue to have F-35, so Lot 18 next year is probably something that we should probably consider coming into the backlog in 2024. In addition to the performance-based logistics program on the F-35 program, we’ve submitted our proposal to the customer. We continue to have dialogue. And we’re cautiously optimistic that we can get under contract in the first half of next year. So those are some key awards to think about for 2024.
Richard Safran: Thanks.
Jay Malave: Welcome.
Operator: The next question is from the line of Sheila Kahyaoglu from Jefferies. Please go ahead.
Sheila Kahyaoglu: Can you guys hear me?
Jim Taiclet: Yes. We can hear you fine, Sheila. Good morning.
Sheila Kahyaoglu: Thank you. Thank you so much. Thanks for taking the question. So just wanted to ask Jim and Jay, you’re a pretty confident management team just given your big backlog, $150 billion. You’re returning 150% to shareholders, which is a big number. So you’ve talked about low single-digit growth and 11% margins for some time. So I just kind of wanted to know what’s changed given the backdrop is seemingly better, is it just a budget uncertainty? Is it supply chain? Is it F-35? Maybe if you can just comment on that.
Jay Malave: Well, not much has really changed, to be honest, we talked about low single digits for a while now. We – I talked about that in my prepared remarks. On the margins, underlying margin is generally flattish because we could be in a situation next year where we have multiple lots of the classified program, that could cause some variability. But that doesn’t fundamentally alter what we’ve been really talking about. Same thing with free cash flow. We’ve been targeting mid-single-digit free cash flow per share growth. And we still see a path there. We know there are some headwinds, whether it’s pension and the like, but we still believe that that we have a line of sight to be able to do that. And that’s what we’re going to be working through on a year-by-year basis since starting with 2024 over the next couple of months. We’ll work through, solidify our plans, and we’ll present them formally to you in January.
Jim Taiclet: In the longer term, there are some things that are changing significantly. One is the global threat environment and the geopolitical situations getting more concerning and challenging. That’s refocusing the U.S. and certainly our allies around the world on national defense in increasing manner. The second big trend that’s going on is the continued evolution of both physical and digital technology at a rate never seen before serving human history, frankly. And so the opportunity for our company to take the leadership role in integrating those technologies, whether they’re hypersonics, hypersonic defense, space technologies that are advanced as well as 5G, distributed cloud, artificial intelligence, we’re investing in all those technologies to try to drive them in and pull through using this 21st Century concept, the technology driving concept we have is to pull through our platforms and enable them quickly on the open architecture that we’re advocating for that will be quickly and widely adoptable, making our platforms more compelling as we go forward in time.
