“What that would mean for MFC margins in the coming years is some possible dilution, but probably no more than 20 to 30 basis points at max.”

In context

“ome additional complexity there given the nature of the program. But there's no reason we couldn't get to the goal line should the government be interested in pursuing any of or all of those elements of the F-35. And I'll address your question, Rich, on the MFC margins. So we, in our guidance this year, have contemplated the PAC-3 and THAAD multiyear agreements getting awarded this year with initial sales starting this year. So I think, first of all, it's encouraging to see margins holding despite growth beginning this year. I think as you know, the way we do our profit recognition is we start typically at a lower profit recognition point on a program and build it up over time as we make progress on deliveries and risk. So think of this as a seven-year program that will step up over time. What that would mean for MFC margins in the coming years is some possible dilution, but probably no more than 20 to 30 basis points at max. But that's gonna then create over time an opportunity to exceed MFC margins beyond where they have historically been with the opportunity to perform that is presented to us with these multiyear agreements. Yeah. And that margin pressure because of the start-up nature of this production ramping will be in an environment where sales should be double-digit growth in MFC and maybe even mid-teens sales growth in MFC? We'll take that trade, and then margins will, as Evan just said, will catch up. This is a very, very good arrangement for Lockheed Martin. Operator: The next question comes from Kristine Liwag with Morgan Stanley. Your line is open. Kristine Liwag: Hey. Good morning, Jim, Evan, and Maria. Jim, thank you for your earlier comments on R&D and capital priority. There's been growing in”