Tom Gentile: Yes, well, what I would say is as production rates increase, margins will improve. We’ve certainly seen a lot of headwinds in terms of labor costs, inflation in utilities and freight and logistics and other things in terms of supply chain. And as the production rates increase, the margins will improve. Now at this point, there’s been so much change in volatility is we’re not making projections in terms of where we’ll be at specific times, but they will certainly improve as the production rates increase.
Kristine Liwag: Great. Thank you guys.
Tom Gentile: Thanks.
Operator: Thank you, Kristine. Our next question comes from Myles Walton from Wolfe Research. Myles, your line is now open.
Unidentified Analyst: Hey, good morning. You have on for Myles. Just a couple of quick cleanups here. Can you guys size the inventory charge in aftermarket in the fourth quarter?
Tom Gentile: I’m sorry, could you repeat that?
Unidentified Analyst: Sorry, can you size the inventory charge in the fourth quarter and aftermarket?
Tom Gentile: Inventory charge?
Mark Suchinski: Sure. It was small. It was — we had some excess and obsolete inventory that we had to dispose of in the fourth quarter. It was a couple of million dollars, $2 million, $3 million. If you think about aftermarket, it’s $360 million of revenue. We did about $73 million in the fourth quarter. So $2 million or $3 million could have a pretty big impact on the overall profitability. That probably — excluding that inventory reduction or charge that we took; aftermarket margins would have been in excess of 20%.
Unidentified Analyst: All right. Great. Thank you, Mark. And then just you mentioned there’s going to be a pension charge in the first quarter, any way to guess size that as well?
Mark Suchinski: At this point in time, we’re finalizing that with our actuaries. We’re probably thinking somewhere between $70 million and $100 million, but we’re working through the final impacts of that. Again, that is the non-cash component of it. And then we’ll also have some tax and excise that we’ll have to deal with as part of that closure.
Unidentified Analyst: Okay, great. And then just last one, I guess with all the talk about the cash impact and the margins going forward, I believe you guys have an IAM agreement that expires in June. How, if at all, are you taking that into account for the guidance for this year? And just how do we think about that going forward, given potential cost increases on that?
Tom Gentile: Right. Well, our IAM agreement does expire on June 23rd and we have taken into account any potential impact in our projections that we’ve provided today. So, we naturally have seen several other agreements that the IAM has concluded with Boeing in St. Louis with Lockheed; with Pratt & Whitney; ULA, and so forth. So, we’ve taken into account that potential impact in our projections today.
Unidentified Analyst: Thank you.
Operator: Thank you. Our next question comes from Michael Ciarmoli from Truist Securities. Michael, your line is now open.
Michael Ciarmoli: Hey, good morning guys. Thanks for taking the question. So, I guess just thinking about the production versus deliveries. It sounds like at 400, the implied rate’s 33%, but I thought you said there were going to be potentially two rate breaks. It doesn’t really imply too much of a step function increase in production. I mean, is that how we should look at that? Or are you guys anticipating higher monthly production rates in the second half of the year?
