Myles Walton: Just a quick follow-up. Is that 19 number in 2025 of MRO shops different than your target earlier this year, I think it’s the same. And so maybe just what has changed in terms of MRO network expansion?
Christopher Calio: Yeah. Fair enough. It is the same, but we’ve accelerated as best we can. Some of these investments, I mean, they were in our plan. We’ve accelerated as much of that spend as we can. And again, it’s bringing on the inspection capacity into the MRO shops. That’s a key to unlocking, sort of the MRO throughput that I talked about. And then just, beyond that for a second Myles, you heard us talk earlier about the 35 or so day turnaround times on those project visits. And again, we know those aren’t preponderance of the visits we’re going to get. But there’s a lot of learning’s that go on and a lot of learning curve that gets tackled when we’re doing these things. So it’s how quickly can we tear down? Inspection limits, repairs, test sell time, literally every part through every gate and MRO, taking time out and being more efficient and putting more resources in those areas.
Myles Walton: Thanks, Chris.
Operator: Thank you. Our next question comes from the line of Robert Stallard of Vertical Research.
Robert Stallard: Thanks so much. Good morning.
Gregory J. Hayes: Good morning.
Robert Stallard: This might be a question for Chris. I’m following up on the powdered metal issue. When you spoke about this in September, you seemed pretty convinced that the issue would not be a problem on the A220, the E2 and the V2500, but it does sound like, there is something going on there now, although you said it’s not significant. So I was wondering if you could elaborate on how the inspections have progressed on those engines. Thank you.
Christopher Calio: Sure. Yeah, thanks for the question. So I think we had telegraphed on the last calls, we’re going through our analysis is that those fleets would be far more manageable in terms of the impact. And while we will have, inspections and life limits on the 1500 in 1900. As we said, they will largely fall within the shop visit forecast we have today. The maintenance intervals on those frankly, are shorter than on the 1100. And so that’s why many of these life limits and inspections fit within those plans. On the V2500, again, we’ve continued down that, inspection, accelerated inspection path we’ve had in place for about two years now. We’re about halfway through that, through that fleet. And as we continue to do those inspections and learn more and analyze the data from those inspections.
We’re able to pinpoint, certain engines based on sort of their profile. Parts they’ve got in them thrust, you know, other characteristics that we’ve targeted for accelerated, you know, inspections. But again, think that’s very manageable. That’s a total of about a 100 or less shop visits stretched out over four years. And again, those are largely going to be project visit work scopes. And we’ve got a lot of experience on project visit work scope on the V2500. Those are in a 40 to 45 day turnaround time. We’ve become very, very proficient at those. So again, that’s why we’re calling those very manageable and will not have significant financial or operational impact.
Robert Stallard: Thanks, Chris.
Operator: Thank you. Our next question comes from the line of Sheila Kahyaoglu of Jefferies.
Sheila Kahyaoglu: Thanks. Good morning, guys. Maybe if you could just walk us through cash, $1.6 billion generated year-to-date, $4.8 billion for the year. How do you think about the biggest drivers on a segment basis, as you head into the final quarter of 2023. And then just given stepped up GTF payments next year, what are the puts and takes there? And then if you don’t mind, I just have to ask on the $10 billion ASR you know, why announce it now and not, you know, derisk some of the MRO output risk on the GTF?
Christopher Calio: All right. Thanks, Sheila. Let me start with, what we need to do on free cash flow. So we were pleased to see $2.8 billion of free cash flow for the quarter, clearly strong and in line with the trajectory we need to see for the full year. And as you look at the fourth quarter, there’s really two major parts that are going to drive, getting to the $4.8 billion. The first is clearly operating profit and we feel comfortable with that given the ranges we just put out there. And we need to see about $2 billion and a little over $2 billion of working capital improve in the fourth quarter. And I would break that down into about three buckets, about $500 million of inventory improvement Again, I think given the demand signals we’re seeing and the growth we’ll see in sales in the fourth quarter, we see that as achievable and manageable.
We are expecting some significant advances and achievement of milestones on the defense side. So when you think about net liabilities and advances on contractual, long term contracts, that’s about $1.2 billion. So that’s a big piece of the fourth quarter. And then the rest really is the timing of disbursements that I would call normal in the course of business here. So a lot to do but we have good line of sight to those things as we look to the closing out the year. I’m not going to get into specifics about next year or the year after other than to say, we do see free cash flow growth in 2024. And we’ll come back in January and provide more of a roadmap as to how you get there. And Greg, do you want to talk about the ASR?
Gregory J. Hayes: Yes, sure. Sheila, the question around the ASR timing, I think it’s a relevant question. And I would tell you we had a fulsome discussion with the board, about the timing of the ASR. And what convinced the management team and the board that it was the right time is our confidence in the powdered metal resolution. And having bound the financial impact of that, we saw this as an opportune time to double down on the stock. And again, if you think about it, we bought $2.6 billion back year to date. This is another $10 billion at what I believe to be a significant discount to intrinsic value. And this is the time to buy. And I think we’re doubling down in terms of our confidence, confidence in the future of RTX, but also confidence that we really do have our arms around the powered metal issue.
Sheila Kahyaoglu: Great. Thank you.
Gregory J. Hayes: Thanks, Sheila.
Operator: Thank you. Our next question comes from the line of Ronald Epstein of Bank of America.
Ronald Epstein: Hey, good morning, guys.
Gregory J. Hayes : Good morning, Ron.
