Cai Von Rumohr: So as Sheila mentioned, allegedly, you guys went after AJRD. You did buy Pipistrel. You’ve won FLRAA. So it looks like your business is becoming more A and B. If we kind of look at valuations across the space, it looks like valuations tend to be higher for pure plays, either you’re doing aerospace, you’re doing air conditioning, whatever. So as you think of your business, Scott, are you thinking of any strategic initiatives? At one point, I think you considered spinning off Caltex. How are you thinking about that now?
Scott Donnelly: No, Cai, I don’t think we’re going to talk about portfolio shaping or changes as part of the earnings call. It’s something we’re always looking at. And I think we’ll leave it at that.
Cai Von Rumohr: Okay. Great. And can you give us any help on the — I don’t know, but what Lockheed’s — what the case Lockheed is making as to why they’re protesting because certainly, on paper, it looks like your vehicle is very substantially better than theirs.
Scott Donnelly: Look, I mean, obviously, that process is going on between the Army and Lockheed. So we probably can’t comment too much. I guess I would just say that this — as you all know, this process has been going on for a decade, right? There’s been an enormous amount of work between both suppliers and the Army from design, development, test, prototype, flight. It’s been an unbelievably robust process. And so, I don’t — it’s hard for me to understand what flaw would have been in the process. It’s kind of inconceivable to me, but we’ll leave that to the Army and Lockheed. And needless to say, we think they made the right choice. I’m proud of what our team did, and we’re excited to get this thing behind us and get on with the program as I’m sure the Army is.
Cai Von Rumohr: Terrific. And the last one is cash deployment. I mean, you’ve got good cash flow, even though down year-over-year. You’ve got a good balance sheet. You’ve basically and heavily focused on share repurchase. I mean, really a lot of leverage there. But you also bought Pipistrel. As you think about where the cash is going, maybe give us some thoughts about M&A versus share repurchase, dividends, all of that.
Scott Donnelly: Well, look, I mean we always look at opportunities that are out there, Cai. And I would say relative to your earlier question, comment, yes, we would view our focus in the world to be within the A&D space in terms of most of our capital deployment. Pipistrel has turned out to be a great little business. Bought some great technology into the company and is now kind of important to us in terms of the future of sustainable flight. But if opportunities like that come along, then that’s great. We’ve done some other smaller deals, again, in the A&D space, and we would continue to look at that. But our principal deployment of our capital has been for the last number of years in the share buyback. We’ve been doing kind of 5%, 6%. We did another 5%, 6% this past year, and I would expect that’s probably the track we’re on in 2023 as well.
Cai von Rumohr: Thank you very much.
Operator: Your next question comes from the line of Kristine Liwag from Morgan Stanley. Please go ahead.
Kristine Liwag: Scott, for the demand environment for aviation, can you give us an update in terms of the customer profile that you’re seeing that are placing these aircraft orders? Are they corporate, individual fractionals? Are they — more for growth, replacement? Or are they new buyers? Any additional context would be helpful in understanding the demand environment?
Scott Donnelly: Sure. We haven’t seen much of a change. It continues to be that same mix. There’s still new buyers coming into the marketplace. Fractional is certainly strong. There’s a lot of buyers on the fractional side. That’s a particularly attractive place for I think for new people to go. It’s not easy to necessarily know how to own this asset. The fractionals provide a great option for people that want to get in. That’s doing well but we still see robust whole aircraft sales. It’s a mix of public companies, private companies, family held companies. It really is kind of our usual customer base, I would say. It remains also kind of the same as we’ve seen around jets largely being driven by the North American market, probably 70-30 to 80-20 in that range, which is normal.
Turboprops are more robust internationally. Again, we see stronger activity, again, like 60% plus international versus domestic on King Air for instance. So the trend in terms of that, who is that customer is kind of our traditional buyers.
