Sheila Kahyaoglu: Good morning. Thank you for the time, Jim and Jay. Jay, I think your margins came in a little bit better for 2023 than anticipated your guidance of about 10 bps higher. When we think about your profitability going forward, is this sort of the expected range we should expect? And of your segments, which do you think is the biggest variable? You talked about MFC and some of the challenges there. So maybe if you could talk about that.
Jay Malave: Yes. Let me maybe talk a bit in the kind of longer-term outlook. And you look at the history of Lockheed Martin over the last probably five to 10 years, and we’ve reached margins in the range of 12%. I do believe we have the potential to get back to those, but that will take time. In the short term, really, I would say, over the next three years or so, our objective will be just to hold the margins where they are because some of these pressures that we see on these new programs, particularly at MFC, when you’ve got a 90 basis point reduction in one year from — in one BA, that’s a lot to really overcome. We’ve worked things internally as far as both product cost reductions, overhead cost reductions to really try to drive and maintain our margin profile.
But that’s where we’re really going to be over the next few years is really trying to maintain where we are as we re-crank the growth cycle. And I think that’s the key message that we have had internally: let’s re-crank the growth cycle, get ourselves in 2024 on track to deliver the growth. As we get that flywheel turning, then we’ll be able to focus and turn back around on margins and start improving margins.
Operator: Next question is from Doug Harned with Bernstein. Please go ahead.
DougHarned: Good morning. Thank you. On F-35, so when you get ready to restart here, you’ve also though now flown the F-35 with tech refresh upgrade — or Tech Refresh 3 upgrade. Can you talk about how that’s progressing, how Tech Refresh 3 is progressing? And how does the progress there play into your delivery plans for Lots 15 through 17? And perhaps you might also comment on, when you get the restart, you’ve got these airplanes that have already been produced. Should we see those as really add-ons to 2023 deliveries?
Jim Taiclet: So Doug, let me take the first portion of your question, it’s Jim, and then turn it over to Jay for the second piece on delivery numbers, et cetera. So Tech Refresh 3 is really important in a couple of dimensions. And you’re accurate in mentioning and thank you for the first flight with the TR3 upgraded hardware and software was literally just a few weeks ago. We’ve got more software releases to go. We’re going to add capability over the next couple of months. But we expect production of TR3-capable aircraft hopefully in this — during the course of this year. That’s our expectation. Now what that does for the customer and for us and our strategy is really kind of two major dimensions. One is for the capability of the aircraft itself.
