Kobi Kagan: Hi, good morning. This is Kobi, actually the $62 million is the difference between the numbers that we saw on 2021 and 2022. So this is actually a onetime expense, which is higher in that all totality from the numbers in 2021. And in addition, we had some, we had some mostly for engineers, some retention, retention linked price programs that cost us additional one times $10 million. So it’s — $72 million of additional expenses, that we are not expecting to have similar expenses during 2023.
Pete Skibitski: Right. Okay. So I imagine there are people out there thinking that 2022 is probably a trough margin year for Elbit. And that given, hopefully, the likelihood that employee linked comp will decline in 2023. And I don’t know if there are other mix issues or if net pricing has improved, but is it reasonable for us to expect margins to improve in 2023 by some amount? I don’t know if you want to put any kind of a range around it or not put red color, but I guess I’ll stop there.
Yossi Gaspar: Again, Pete, we do not give you exact numbers, but definitely the numbers that Kobi mentioned earlier will not repeat themselves in 2023.
Pete Skibitski: Okay, okay. And then any — just on net pricing, just in terms of base labor rates, are €“ are you guys able to cover the inflation from base labor rates in your pricing in 2023? Or are you expecting improvements or deterioration of that situation? Can you add some color in there?
Kobi Kagan: Well you know Pete that about, I would say 75% of our labor force is in Israel. The compensation of these people is done in local currency, of course, the shekel. During 2022, we had currency exchange rate between the shekel and the U.S. dollar off roughly about 3.3 shekels to the dollar. In general, on an average, this number is going to improve in 2023. It is still to be calculated, but we expect an improvement in the in this cost, labor in dollar currency.
Pete Skibitski: Okay, okay. I appreciate it. Okay, yes, I’ll stop there. Thanks so much, guys.
Kobi Kagan: Thank you. Thank you, Pete.
Operator: The next question is from Atinc Ozkan of WOOD & Company. Please go ahead.
Atinc Ozkan: Thank you. Perfect pronunciation of my name. This is Atinc Ozkan from WOOD & Company. Sorry if my questions are repetitive. I was not able to join earlier part of the conference. But two questions for you, please. The first one is regarding your recent strategic MOU in Japan. You signed it with twice localized space companies. And we know that Japan is rearming, they will be spending roughly I guess $300 billion over the next five years. Why do you see the specific opportunities for your products in Japan? Should we assume that you will start with the needs of Japanese air defense force given that they are an operator of F-15 and F-35? That’s the first question. And second one is could you please provide some updates regarding person to completion of your on-going investment programs whether it’s the one ERP, the on-going production line in South Carolina and the state of the art plant in Southern Israel for IMI? Thank you.
Butzi Machlis: With regard to it’s Butzi, hello. With regard to the first question. We all see the on-going investment in Japan in defense. We find that our portfolio is very relevant to the growing needs is going to grind in this market. We see there is a lot of interest for our portfolio and I’m talking about training solutions, I’m talking about the earnings. I’m talking about these and others. For that we have teamed with several companies in the country. And as you noticed, we are we presented in the last exhibition, two weeks back, and it’s not the first time we are in this market. And we certainly see a growing opportunity in these areas as well as in others in the Japanese market. It’s a new market for us. We, we feel very welcome in this market.
