Matt Akers: Okay, thanks. And then, if I could follow-up. I guess maybe on working capital. Dave, I don’t know if you could comment on your thoughts on how that progresses in the second half?
David Keffer: Sure, thanks Matt. We continue to feel really good about our working capital status as efficient I think as any across the industry and particularly strong in the second quarter. We mentioned a $1 billion of improvement year-over-year in free cash flow that was bolstered by the strength of our invoicing and collections efforts during the quarter which puts us in good status. We think about where we stand year-to-date compared to a year ago. We continue to expect a kind of typical seasonal pattern with the strongest free cash flow and therefore working capital efficiency in the fourth quarter of the year. But overall feel good about our working capital efforts.
Operator: Thank you. One moment for questions. Our next question comes from Peter Arment with Baird. You may proceed.
Peter Arment: Yes, thanks. Good morning, Kathy, Dave, Todd. Hey Kathy, thanks for your comment on the mix and kind of the longer-term outlook on where that transitions from cost plus to kind of fixed price mix for the company. Is 2023 kind of the peak year or is it more like next year for cost plus and just a related to kind of just your comments on working capital. How do we think about the working capital profile kind of over that similar period? Is that like a that does have become a headwind or is it an opportunity for you. Thanks.
David Keffer: Thank you, Peter. I’ll start with your mix question. Yes, this is the year to think of as the higher water mark for cost type work given where we are in the development cycle particularly on many of our largest programs. We mentioned we’ve been in the 55% of sales range in terms of the cost plus mix in the first half of the year. We expect that to ease slightly in the second half, well it’s really over the next four five years we’ll see that shift back to the other side of 50/50 and toward that 60/40 fixed price mix that we described in our prepared remarks. So, that is a meaningful opportunity for us in terms of margin expansion as we help deliver those capabilities to our customers in the production phases of the programs.
Working capital longer-term, as I mentioned, we’re really pleased with our working capital efficiency when we think about where we finish 2022, where we project 2023 finishing as well. And so, we don’t think of working capital as a source of a lot of upside opportunity for additional efficiency over the next five years nor do we think of it as an area of expected headwind. I think it’ll be more neutral than that. So, when you think what will drive that opportunity to double our current run rate of free cash flow over the next five years, think of it in terms of growth in the sales volume of the business, the margin rate opportunity we’ve been talking about and the conversion of those margin dollars to cash flow that certainly the number one effort and the number one driver.
But then, coinciding with that you’ll see a decline in demand for capital expenditures where peak levels in ’23 and ’24 around capital intensity, that will ease to a more historical levels over the next five years. You’ll see some increase in CAS funding over the next couple of years in our in the projections we’ve outlined over the last few quarters. And then cash taxes will decline based on current tax law particularly related to the amortization requirements for R&D.
Operator: Thank you. One moment for question. Our next question comes from George Shapiro with Shapiro Research. You may proceed.
