Michael Ciarmoli: Okay. Okay. And then was — I know you recently broke even at the EBITDA level in medical. Were you EBITDA positive for the full quarter?
Robb LeMasters: We were. We do model of that business out on a quarterly basis. We’re not going to be guiding that. But yes from this point forward I see that business is making money at the EBITDA level and then we put out that targets, we still stand by that $200 million and $75 million of EBITDA. So when we look out a couple of years the line to get there is still staggered but we’ll get.
Michael Ciarmoli: Got it. Perfect. And then Rex, I got on a few minutes late. I may have missed this. Just on AUKUS and what’s been going on with the supplemental support for the industrial base? I mean, I know maybe more over the summer you guys weren’t as overly optimistic on that being a big growth driver. But it would seem like if Virginia class is going to get produced and delivered to Australia in 2032. I mean, it would have to start flowing through your facilities pretty early here. I mean what’s the latest thinking on kind of AUKUS?
Rex Geveden: Yeah. I think Michael that’s shaping up a little better than maybe we had had been speaking about it earlier. It looks to us like based on the $3 billion investment from Australia into the US submarine industrial base. And then obviously there’s another $3 billion in the supplemental that came from the White House over to Congress. It looks like the industrial base and the decision-makers are preparing for incremental demand here. And that’s certainly the way it’s being discussed. And so we’re certainly hopeful that it’s incremental. So that 3% to 5% would be layered in on top of our normal Virginia production and the industrial base will need to produce let’s call it 2.3 submarines a year. We also by the way anticipate having content although we can’t provide any details here but we do expect to have content on the SSN Augus boat that would go to both the UK and Australia.
So there’s a tail on that for us that’s — it’s certainly well out into the future. But that’s all shaping up to be incremental demand and that’s good for our business clearly.
Michael Ciarmoli: Got it. Would you have to – would that require any — ?
Rex Geveden: Michael you cut out on us. So I think you were asking — I think Michael you were asking whether or not it would require incremental CapEx. I guess it depends on the acquisition tempo for one thing. But I would say that of that $6 billion that I alluded to earlier from both US and Australia appropriation sources, some of that will come into the industrial. I mean all of that will come into the industrial base we’d expect to get some of that potentially. And so we’ll have to see where the capital needs to lay out, but I think it’s shaping up nicely for us.
Operator: Your next question comes from the line of Scott Deuschle with Deutsche Bank. Your line is now open.
Scott Deuschle: Hi. Good afternoon.
Rex Geveden: Hi, Scott.
Robb LeMasters: Hi, Scott.
Scott Deuschle: Robb, it looks like the EACs got a lot better this quarter at least relative to the first half. So maybe you could just talk about if there are any non-recurring elements that drove that or if that was just broad-based performance.
Robb LeMasters: Yes. No that was in our government segment. In general, we’ve been grinding through as we’ve had the sort of labor inefficiencies relative to probably how we sold. We had inflation headwinds. We had all frankly all of that in the past couple of years. And you’re exactly right in the third quarter we did have better performance and so we saw better EACs. And I think all the efforts that we have and now that we’ve sort of gotten better at onboarding I see the prospects for continued positive EACs going forward.
Scott Deuschle: Okay. Great. And then Robb you talked a bit about in the prepared remarks there, but maybe you can just level set us on where you’re at in the missile tube recovery negotiations? How much you expect to recover in the confidence center you have in getting that here in the fourth quarter?
Robb LeMasters: Yes. I think the communications are quite good. We’re obviously negotiating with our customer and they have to interact with the Navy. I think those discussions are quite good. I think we’ve made a good case. And so we have not actually gotten to a number yet which is why we’re trying to guide with all that in mind for the fourth quarter. I think we’ve talked about in the past that we had a pretty chunky negative item last year. So we’re hoping to recover that and then some. So that’s the way we’re thinking. We’re not really at liberty yet because we haven’t actually settled on a true number at this point. But the communication is great. And, yes, we’re looking forward to getting that behind us in the fourth quarter.
Scott Deuschle: Okay. And then last question just an accounting question. The depreciation for the technetium-99 product line does that kick in on a straight-line basis once you get the FDA approval? And if you’re slow to ramp up sales then you take the depreciation hit is there a risk to EBIT margins at commercial operations obviously EBITDA won’t be affected. Just trying to think about the EBIT margin impact and what it means for EPS if that treatment gets.
Robb LeMasters: Yes, it’s a good question. I mean, in general really it’s more on your — when you put assets into commercial use if you will — so it’s not necessary oh there’s the FDA. So that’s the first trigger you should be thinking about. The second is it’s not all in one dose. So there’s different assets that get deployed whether it be the target delivery system versus the assets that are at the facility. So it’s not all at once but pretty close. So there is some layering in. But you’re right. As we go to market, we want to be able to really service the market in a quick manner that’s a little bit what I alluded to with one of the questions earlier. It’s not like we’re going to have a full run rate of revenue that is not going to be an immediately super profitable product.
