Peter Arment: Greg, I want to say in RMD. You’ve just up low to mid-single digits on an organic basis. Just in the backdrop, it seems like it should be potentially better than that. Obviously, wondering if you could just kind of parse out how much is being impacted by the supply chain. And if €“ just when we think about all the DoD potential replenishment activity, plus you’ve got strong demand from NATO allies. Just a lot of opportunities for the space, it feels like you should be having a more potentially sustained top line growth. Maybe just your thoughts on that over the coming next couple of years. Thanks.
Greg Hayes: Peter, I think you’re spot on. I think as we look at 2023 and then 2024, there is more growth potential at RMD than there probably is any business outside of Collins just because, again, the backlog is so strong. I would tell you, given the challenges that we saw in supply chain last year and driving material in, I think we’ve taken a more conservative view of 2023 performance there. I think total material inputs at RMD last year were around $6 billion. This year, we’re looking at about $6.5 billion. But quite frankly, the demand is out there for more. So that $6.5 billion should also drive some productivity, $100 million to $150 million. Again, I think that’s actually light by historical standards, but we’re €“ I hate to say that we’re conservative again and again.
But really we set these targets. So we think we can absolutely deliver. We’re not going to have to go back and relook at these in the middle of the year. But there is certainly the demand out there for higher top line and that would result in higher bottom line. But most of that growth, I think, will come in 2024 when we really see supply chain back to where we had seen it pre-pandemic. And that is the key for RMD. They’ve got the orders. We’ve got the capacity. We just have to bring €“ drive the material in and that $6.5 billion that we see next year is going to have to continue to grow significantly to meet the demand out there that we see.
Peter Arment: Appreciate the color. Thanks, Greg.
Greg Hayes: Thanks, Peter.
Operator: Thank you. Our next question comes from the line of Myles Walton of Wolfe Research. Your question please, Myles.
Myles Walton: Thanks. Hey, good morning. And Greg, just a follow-up first. I think you just said RMD might have the fastest growth outside of Collins. And I just wanted to clarify, is Pratt still the faster growing of the two? Or is Collins now faster growing?
Greg Hayes: From a bottom line perspective, it’s going to be Collins, right? I think, again, top line, you’re going to see €“ what is the number, Neil, for 2023 here for Pratt?
Neil Mitchill: For 2023, they’ll be up low to mid-teens. So very substantial growth for 2023. And sort of as you look out over the next several years. These €“ all four businesses are in the same ZIP code of high single-digit type of sales growth on a CAGR basis.
Myles Walton: Got it. And maybe a more detailed question on Pratt. If you can just give a little color on where GTF is in the aftermarket composition where legacy higher-margin aftermarket is in that composition? And how those two play out over the next several years? And also how the GTF aftermarket is trending versus your sort of assumptions of profitability on those long-term contracts?
