Good morning, welcome to the General Dynamics first quarter 2023 earnings conference call. All participants will be in listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by 1 on your telephone keypad. Please note this event is being recorded. I would now like to turn the conference call over to Howard Rubel, Vice President of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone. Welcome to the General Dynamics first quarter 2023 earnings conference call. Any forward-looking statements made today represent our estimates regarding the company's outlook. These estimates are subject to some risks and uncertainties. Additional information regarding these factors is contained in the company's 10-K, 10-Q, and 8-K filings. We will also refer to certain non-GAAP financial measures. For additional disclosures about these non-GAAP measures, including the reconciliations to comparable GAAP measures, please see the press release and slides that accompany this webcast, which are available on the investor relations page of our website, investorrelations.gd.com. On the call today are Phebe Novakovic, our Chairman and Chief Executive Officer, and Jason Aiken, Executive Vice President, Technologies and Chief Financial Officer. With the introductions complete, I turn the call over to Phebe. Thank you, Howard. Good morning, everyone, and thanks for being with us. As you can discern from our press release, we reported earnings of $2.64 per diluted share on revenue of $9.9 billion, operating earnings of $938 million, and net earnings of $730 million. Revenue is up $489 million or 5.2% against the first quarter last year. Operating earnings are up $30 million, and net earnings are flat against the year ago quarter. This increase in operating earnings was offset by a $31 million increase in the tax provision. Recall that the first quarter 2022 tax provision was only 14%. Nevertheless, earnings per share are up $0.03 as a result of the stronger operating earnings and a lower share count. The operating margin for the entire company was 9.5%, 20 basis points lower than a year-ago quarter. This reflected lower operating margins in Aerospace and Marine, which I will address in some detail later in these remarks. Revenue was $489 million better than first quarter 2022. All of the defense units were up and Aerospace down slightly, less than 1% on fewer aircraft deliveries. We beat consensus by $0.05 per share. We have roughly $550 million more in revenue than anticipated by the sell side and lower than anticipated margins, leading to operating earnings basically consistent with expectations. The earnings per share beat was largely attributable to below-the-line items. As Jason will amplify, cash from operating activities and cash after CapEx was very strong. This is particularly impressive following a very strong cash performance in 2022 and not at all typical for us in the first quarter. Obviously, we are off to a very good start from a cash perspective. This is, in important respects, a strong quarter, a good foundation for the year, subject to some supply chain issues that I will try to illuminate as we discuss the business segments. At this point, let me ask Jason to provide detail on our order activity, solid backlog, and very strong cash performance, as well as commentary about the Technologies group in the quarter. Thank you, Phebe, and good morning. We had a solid quarter from an orders perspective with an overall book-to-bill ratio of 0.9x to 1x for the company. Order activity was particularly strong in the Combat Systems, which had a book-to-bill of 1.5 x. We ended the quarter with total backlog of $89.8 billion, off 1.4% from the end of last year, but up 3% from a year ago. Our total estimated contract value, which includes options and IDIQ contracts, ended the quarter at more than $128 billion. Turning to our cash performance for the quarter, it was another exceptional start to the year with operating cash flow of $1.46 billion, representing 200% of net income. This very strong cash flow was heavily loaded in the last few weeks of the quarter. After capital expenditures, our free cash flow for the quarter was $1.3 billion, a cash conversion rate of 178%. While we continued to enjoy strong cash performance in aerospace and Technologies, the Combat Systems Group in particular delivered outstanding free cash flow this quarter. As expected, the U.K. resumed payments on the AJAX program. This, coupled with the ongoing progress payments on our other large international vehicle program, drove the group's cash performance. This is consistent with our expectation for the year of a cash conversion rate in excess of 100%. Now turning to capital deployment. Capital expenditures were $161 million or 1.6% of sales in the quarter. Similar to last year, you should expect capital expenditures to increase in subsequent quarters throughout the year. Also in the quarter, we paid $345 million in dividends and repurchased approximately 400,000 shares of stock for $90 million at just over $220 per share. We ended the quarter with a cash balance of over $2 billion and a net debt position of $8.5 billion, down nearly $800 million from year-end. As a reminder, we have $750 million of debt maturing in the second quarter, and we're in a position to pay that down with the cash on hand following the receipts at the end of the first quarter. Our net interest expense in the quarter was $91 million compared to $98 million last year, benefiting from the debt repayment in the fourth quarter of 2022. We had a 17% effective tax rate in the quarter, consistent with our full-year guidance. Turning to operating performance and Technologies. We're off to a solid start. Revenue in the quarter of $3.2 billion was up 2.5% over the prior year, modestly ahead of our expectations for the start of the year. The measures implemented at Mission Systems to overcome what seems to be the new normal in the supply chain are taking effect, which gives us confidence about their outlook for the balance of the year. GDIT had their highest quarterly revenue and earnings in four years as they continue to deliver on their year-over-year growth trajectory. Operating earnings of $299 million were consistent with last year, yielding a margin of 9.2%. As we discussed in January, margins will continue to be driven by the mix of IT service activity and hardware volume. Backlog grew during the quarter with the group achieving a book-to-bill ratio of 1:1 on strong order activity in IT services that included some important wins not yet factored into the backlog. This includes the Army's Flight Test School Training Support Services contract valued at $1.7 billion, an Air Force IDIQ with a total potential value of $4.5 billion between two awardees for security support services, and a pair of IDIQ contracts with the EPA with a potential value of $380 million to support the agency's environmental and climate initiatives. GDIT booked the highest orders they've seen since the second quarter of 2019, and their pipeline remains robust with $19 billion in submitted bids awaiting customer decision and another $84 billion in qualified opportunities identified. Let me turn it back to Phebe to review the other business segments. Thanks, Jason. Now I may review the quarter in the context of the other business segments and provide detailed color as appropriate. First, Aerospace. Aerospace held its own in a very difficult operating environment. It had revenue of $1.9 billion and operating earnings of $229 million with a 12.1% operating margin. Revenue is $11 million less than last year's first quarter, despite the delivery of 4 fewer aircraft. The fewer aircraft deliveries were almost completely offset by higher Gulfstream services, Jet Aviation volume, and special missions work at Gulfstream. The 21 deliveries in the quarter are 3 fewer than planned. Two G280s did not deliver because of late engine deliveries. The other plane, a large cabin for an international customer, didn't deliver because of simple bureaucratic registration delays in the owner's country. This is the first quarter in which we have missed an airplane delivery as a result of supply chain issues. Up until now, we have managed to work around late to scheduled parts deliveries. Operating earnings of $229 million are $14 million behind last year's first quarter as a result of a 70 basis point degradation in operating margin. Operating margin in the quarter was under pressure as a result of fewer new airplane deliveries, a less attractive mix, severe supply chain issues, some modest cost increases from suppliers, and the pre-build of G700s. Let's take a look at some of these elements in greater detail. The shortage of parts to schedule from the supply chain, especially from Honeywell, has created significant out-of-station work, which is inherently less efficient. We have a young, well-trained, and capable workforce. They have, however, never previously been exposed to out-of-station work. They are doing well, I am pleased to report. It had an impact. The other impact of late to scheduled parts deliveries, apart from cost growth, is that we cannot increase our build rate until the supply of parts is more predictable. The good news is that there is light at the end of the tunnel. We see the vast majority of this problem resolving early in the third quarter. For 2 large suppliers, it will take a little longer to resolve. As most of you know, we plan to deliver a considerable number of G700s in the third and fourth quarters. To do that, we must build them now and incur some period costs without the related revenue. This has impacted the first quarter and will impact the second quarter. Relief is in sight as deliveries commence. Aerospace had a decent quarter from an order perspective with a book-to-bill of 0.9x to 1x in dollar terms and 1: 1 in units. The quarter was looking quite good until the two regional bank failures in early March. This created a pause in the market for about three weeks. I am pleased to report that normal activity has resumed. Strong sales activity and customer interest is evident in this quarter. The U.S. has been strong and the Middle East as well. China remains slow. The G700 flight test and certification program continues to progress well. The aircraft design manufacturer and the overall program are very mature. We continue to target certification of the G700 for late summer this year. Gulfstream remains committed to a safe and comprehensive certification test program. Production of customer G700s is well underway, and we are preparing for entry into service. We will deliver a mature, high quality aircraft. Looking forward next quarter, we expect to deliver 26 aircraft with rapid increases in the third and fourth quarter deliveries as we have previously indicated. In short, the aerospace team did a good job under difficult circumstances. Combat Systems. Combat had revenue of $1.76 billion, up 4.8% over the year-ago quarter. Earnings of $245 million are up 7.9%. Margins at 14% represent a 40 basis point improvement over the year-ago quarter. We saw strong operating performance coupled with a nice revenue uptick. At Land Systems, increased revenue came from the MPF ramp up, Stryker SHORAD and new international vehicle programs for Poland and Australia. At European Land Systems, we had higher PIRANHA volume and OTS enjoyed higher artillery program volume. We saw increased revenue performance at each of the businesses. Here's a little additional color on Combat Systems revenue results. Foreign exchange fluctuations negatively impacted Combat's revenue in the quarter due to the strength of the dollar versus the Canadian dollar, euro, and the British pound. For the FX headwind, Combat Systems revenue growth would have been up 7.1% over the last year rather than the 4.8% we have just reported. We also experienced very strong order performance at Combat. Orders in the quarter are at their highest level in more than eight years, evidencing a strong demand for munitions and international combat vehicles. There is clear upward pressure on our forecast for Combat Systems revenue and earnings in the year. Turning to Marine Systems. Once again, our shipbuilding units are demonstrating impressive revenue growth. As an aside, let me repeat a little recent history. The first quarter of 2020 was up 9.1% against the first quarter of 2019. The first quarter of 2021 was up 10.6% over 2020. First quarter of 2022 was up 6.8% over 2021. Finally, this quarter revenue of almost $3 billion is up 12.9% over 2022. This is an impressive growth ramp by any standard. This quarter's growth was led by Columbia class construction and engineering, DDG-51 construction and some T-AO volume. Operating earnings are $211 million in the quarter, exactly the same as a year ago, but with a 90 basis point decrement in operating margin. The primary driver of lower margins during the quarter was a charge on the Virginia program to reflect cost pressure within our supply chain and efficiency impacts at Electric Boat as a result of late material deliveries. This was partially offset by Columbia margin improvement. Other modest margin impacts included an earnings decline at Bath as a result of a one-time pickup in the year-ago quarter and cost inflation reimbursement that does not carry profit. Overall earnings are what we expected, but revenue was higher, resulting in lower margins. We anticipate that this will improve as we progress through the year. As you know, we never update guidance at this time of the year. I would say, however, that our quarterly progression differs from prior years in that the second quarter will be our lowest quarter because of mix and volume across the business. Nonetheless, we look forward to very strong third and fourth quarters. We will give you a comprehensive update at the end of next quarter, as is our custom. This concludes my remarks with respect to what was a challenging, but in many respects, rewarding quarter. Thanks, Phebe. As a reminder, we ask participants to ask one question and one follow-up so that everyone has a chance to participate. Operator, could you please remind participants how to enter the queue? At this time, I would like to remind everyone in order to ask a question, press star, then 1 on your telephone keypad. Your first question comes from line of Seth Seifman from JPMorgan. Your line is open. Yeah, thanks very much, good morning, everyone. Good morning, Seth. Phebe, I wonder to ask a question about Marine and, you know, at the risk of asking the question that you just said that, you know, we never update guidance at this time of year. If you can just give us some color. You know, given what we thought about revenue and margin, at Marine coming in, the revenue is clearly much stronger in Q1, the margin weaker for the obvious reason of the Virginia charge. You know, can you help us from here in terms of how the Virginia contribution changes from Q1 going forward now that the charge is done? You know, it seems Columbia is maybe coming in stronger. If I could tack on one follow-up. There's been a lot of talk about the Columbia schedule, both in congressional testimony, GAO reports, et cetera. If you can give us the latest update on how you view the schedule for Columbia. We think that we plan to have Q1 as our lowest margin quarter, and we'll continue to work to that. Virginia it will stabilize once we get the schedule and supply chain issues resolved. At this point, it's incumbent on Electric Boat to continue to do better to offset those costs. With respect to revenue, there's clearly some upside pressure there, but we're gonna hold any other additional comment for the moment. Let's go to Columbia. I think just the Navy has clearly articulated it and firmly articulated that we are ahead of the contract schedule. The contract schedule is what matters. Let's put a little context on this. We are, on the Columbia, we are 16 years into the 20-year lead ship schedule. I think within that context, it's indicative of the actions we have taken heretofore and those that we will continue to take to keep this program on schedule. Great. Thanks very much. Your next question comes from a line of Robert Stallard from Vertical Research. Your line is open. Thanks so much. Good morning. Morning. Phebe, I may be wrong, but it sounds like these supply chain issues in Q1 got worse. I was wondering if you could comment on that, and also what sort of mitigation plans you're putting in place to correct these problems. Specifically, are you talking about a particular group? Well, it seems like it's aerospace, and the Virginia-class submarine and Marine Systems. Yeah. Let's be clear. We have been dealing with supply chain issues for some time, and we've been able to manage through them. This quarter, we had 2 large suppliers get worse. We have, however, as I noted in my remarks, light at the end of the tunnel through our clear visibility into the 3rd and 4th quarters, where the majority of the supply chain improves. We're working very hard with our all suppliers, both in terms of flyaway teams and additional production help, and to also encourage them to allocate the necessary resources in order to make their contracting schedules. We are pretty comfortable that we can resolve these issues in the 3rd and 4th quarter. Gulfstream has done a magnificent job heretofore and even this quarter in managing through these challenges. With respect to the Virginia Class program, we have been talking about the supply chain challenges for some time. As with all, you know, heavy manufacturing and labor-intensive manufacturing construction projects, manpower is a significant impact. The impact from the ramifications from the pandemic, you know, hit that supply chain pretty hard. We're beginning to see that remedy with the help of the Navy and a lot of support. We'll continue to work, you know, with our supply chain and all elements of that supply chain, as well as our customer, who's very engaged to ensure that we can get that Virginia cadence back on schedule. That's very helpful. Thank you. Your next question comes from the line of Doug Harned from Bernstein. Your line is open. Good morning. Thank you. Hi, Doug. Phebe, on, when we're looking at the situation in Europe right now, I mean, two things seem to stand out to us with respect to Combat. One is, as you mentioned, the demand for munitions. You know, we've seen in the 2024 budget, there was actually a reduction in the budget for munitions, which we found somewhat surprising. How do you think about the trajectory there and your ability to assuming we are going to see significant growth in munitions demand, and your ability to ramp up production over time? We have been working very closely with DOD and the Army to ensure that we increase production and move. Hello? Hello? Hello? Can you hear us? Doug? Operator? Hello? He appears to have lost audio. Hello? Okay. Are we. Well, let me answer, Doug. Can the rest of the call hear us? Yes, we are still live. Okay. Let me answer Doug's question. We've been working very closely with DOD and the Army to increase production and throughput. We've done that in a couple of ways, upgrading existing facilities, increasing the number of shifts, building new facilities with more modern equipment. We have already done so to again accelerate production and are quite confident in our ability to do even more. We've been receiving adequate and completely adequate funding to execute all of this. We are quite confident that we will move throughput much quicker and will expedite the delivery of this critical capability to the Army. Your next question comes from the line of Peter Arment from Baird. Your line is open. Thanks. Good morning, Phebe. Hey, Phebe, thanks for the color on Gulfstream, just on the overall demand, you know, kind of re-strengthening in the quarter post the banks in the Middle East and certainly the U.S. Are you still seeing kind of broad interest across all the models? I know you had mentioned. G650, particularly the last, like, two years, has been very strong. Thanks. Broad interest across all the models. We're doing quite well. You wanna ask another question? Yeah, sure. No, I appreciate that. Thank you. Just staying within Gulfstream, just, I know that you're not gonna update, you know, kind of guidance, but the deliveries that you missed this quarter, are they expected to recover in the second quarter? How are we thinking about that? Is this all kind of second half related? Thanks. Appreciate it. We expect to resolve all of the supply chain issues. What you ought to think about is the third quarter and fourth quarter being quite robust. I think what you're getting at is the sort of the deliveries that we expect to execute for the year at about 145. We're pretty confident we can get there. If we miss, it's just gonna be by a little. Your next question comes from the line of Myles Walton from Wolfe Research. Your line is open. Thanks. Phebe, I was hoping you could talk to how you balance within Marine the higher priority national, you know, at the national level of the Columbia class, which is under a lower financial risk cost plus contract, versus the higher financial pressure Virginia class, which is under fixed price contract, but you might have to pull resources away, and just how you're managing that from a financial risk perspective. Thanks. Implicit in your question is the fact that Columbia enjoys a higher national rating in terms of urgency than Virginia. We had fully contemplated that with the U.S. Navy when we negotiated the most recent block of Virginias that was in concert timing-wise with the Columbia negotiation. We're working with the Navy to ensure that the language that we had incorporated into the Virginia contract to accommodate any such impacts on Virginia from a Columbia prioritization could be addressed. The Navy's been working very closely with us. We were mindful of that and have been for some time. I use this as a clarification, Phebe. Do the current financials reflect that assumption playing out, or would there be a sort of equitable relief in the future if they agree with the position? I'm not gonna speculate on how this will be addressed ultimately with our customer, but this is more of a future issue rather than in the moment issue. That was not the primary driver of the quarter. Your next question comes from the line of George Shapiro from Shapiro Research. Your line is open. Yes, good morning, Phebe. Good, George. If you hadn't had the loss of three weeks from the bank failures, I assume then the book-to-bill would have been above one in the first quarter. Is that likely to continue then in the second quarter, where you're saying we are seeing significant strength now? Our plan going before March 10th was that in fact we had anticipated a full book -to -bill of 1: 1 on, at that point, higher deliveries. On a going forward basis, it's our working assumption that we will continue to see 1: 1, and at the moment, we see no reason why that can't be achieved. Okay. The delivery expectations for next year would still be the same as what you had laid out before? We are holding to what we gave you in terms of out year expectations for aerospace. Your next question comes from the line of Louie DiPalma from William Blair. Your line is open. Phebe, Jason, and Howard, good morning. Morning. Is the lead Columbia approximately one-third complete now? Yes. Great. As a follow-up, you referenced supply chain headwinds with Virginia and aerospace. Is the supply chain for Mission Systems improving at all? It absolutely is. We saw a good trajectory and gaining some traction in the quarter. That's part of the reason why volume was up nicely in the quarter, and they seem to be on a good path to overcoming that bottleneck in their system. Gives us confidence for the opportunities they have in the second half of the year. Your next question comes from a line of Kristine Liwag from Morgan Stanley. Your line is open. Hey, good morning, everyone. Morning, Kristine. Phebe, you know, per new plans unveiled last month under the AUKUS pact, it looks like Australia could buy up to 5 Virginia-class submarines potentially in the early 2030s. With a backlog now of 17 Virginias delivering through 2032, how are you thinking about this opportunity, and what's the production capacity required to meet this demand? We are working with our Navy customer to clarify timing, and capacity and throughput. At the moment, we have no particular insight, and are really deferring to the Navy on AUKUS and the timing and specificity of their long-range planning. If I could sneak another one. Sure. Switching to Combat. look, it seems like the Army is pushing significantly to ramp artillery production, particularly the 155 millimeter shells, and planning to double monthly production to about 24 per month by year-end, and then. Increasing production 6 x over the next 5 years. How are you thinking about this opportunity? Do you see what do you need to do in order to meet this demand should it materialize, and are you seeing the orders come through? We have seen the orders come through. We do not yet have out year clarity on the exact timing of the additional production, we will see additional production. This is because of the priority of the 155. I think, you know, the nation has learned a lot about 155 artillery shells. We've done a lot to increase production already, and we are quite confident that we can go even faster. Your next question comes from the line of Matt Akers from Wells Fargo. Your line is open. Hey, good morning. I wanted to ask kind of a high-level question, on pilots for biz jets and, you know, on the commercial side, you know, lack of kind of staffing like pilots and crews has been a kind of a pacing item. You know, what's your sense for business jets? Are your customers kind of better off in that respect, or could that, you know, potentially be a bottleneck for biz jets as well? I think during the height of COVID, there was so much disruption in all labor markets that we may have seen some issue then, but frankly, it didn't impact us. We're not seeing anything at the moment that is impacting our ability to fly, our customers' ability to fly, or frankly, flying hours. Okay. Thanks. Your next question comes from the line of David Strauss from Barclays. Your line is open. Morning. Thank you. Hi, David. Hey, Phebe. The G700 is in the cert there. Is software validation the pacing item still? If so, how far the way through that are you? No, it is not. We are in pretty good shape here with respect to our certification. Look, this is an extremely mature, safe, and sophisticated aircraft. We're working very closely with the FAA to ensure that they've got the proper resources here to execute the certification, but it is coming. Okay. quick follow-up. Jason, you mentioned the resumption of the AJAX payments. Can you update us on kind of the schedule for the liquidation there, how you expect that to play out, and also on the, on the Canada program? Thanks. Obviously, it was a positive development to see the payments resume here in the first quarter as we expected. The path forward with the customer is an ongoing discussion. We worked through the revised schedule for the program, but some of the other particulars around milestone payments and progress on that schedule are still in the works. It would be probably remiss of me to get out ahead of that. In terms of the Canadian program, things are continuing to proceed well. That customer for the past three-plus years has paid on time as per that schedule we negotiated. A couple more payments to come this year, and then really you can think about it as the entire arrears that we were dealing with some 2, 3 years ago will have been paid down, and we'll be in a normal program cadence and schedule at that point. By the end of this year. Your next question comes from a line of Ken Herbert from RBC Capital Markets. Your line is open. Yeah. Hi, good morning, Phebe. Good morning. I wanted to see if we could put a finer point on the aerospace margins in the second quarter. With supply chain issues and other timing around the certification and pre-build, are second quarter margins expected to be similar to first quarter, or was first quarter expected to be the trough for the year? I think you may need to think about the second quarter being our lowest quarter, and then with a very steep and executable ramp up in third and fourth quarter. I tried to give you guys an awful lot of color in the remarks about the puts and takes on all the margins, on the margins with respect to aerospace. We will get through the second quarter. Frankly, these first two quarters are aberrational in terms of Gulfstream margins, and then we ought to see nice pickup in third and fourth quarter. Okay. Just as a follow-up, you know, just considering the, you know, roughly 100 aircraft, you know, implied in the guidance for the second half deliveries and the supply chain issues, are you having at this point to maybe look at second sources or is there anything else you're doing now? Obviously, it's very late in the game, but to further de-risk the supply chain beyond, you know, beyond just the execution? We've been doing that for some time. As you all know, the supply chain on the aerospace side has been taxed for quite a bit of time. We're not taking any new actions that we haven't already executed, and we're just ramping up some of those actions in the first quarter and then as we go into the second. We have, as I said earlier, very clear line of sight into the third and fourth quarters, and the majority of these suppliers fully anticipate getting better. We'll work with the remaining ones to ensure they've got the resources to execute the contract. Your next question comes from the line of Ron Epstein from Bank of America. Your line is open. Hey, good morning. Hi, Ron. How are you? Maybe just a quick question, maybe two. What are the synergies so far from merging the two businesses in kind of mission tech? How's that gone? Keep in mind, Ron, when we talk about merging those businesses, they still remain two independent and stand-alone operating units within our model. Not really anything to think about from a cost synergy perspective. I think the way to think about that is more of a revenue synergy point of view in that what we talked about is those two businesses are seeing a real convergence on a number of fronts within their markets, what their customers are interested in procuring in terms of end-to-end solutions that include the IT service side, software solutions, as well as hardware, as well as where their competitors are going in the market to address those demands. Bringing those two businesses together has put us on a good footing to address that market and those demands and that's what we're seeing. You're seeing that in the positive order performance in the quarter, and book-to-bill capture rates, win rates, and so on. All of that gives us good confidence in terms of the trajectory of the outlook that we see for each of those businesses. Got it. Got it. Maybe just one quick follow-on. How much of the free cash flow in the quarter can be attributed to AJAX? Yeah. So- We have factored the net of payments to the supply chain, which has been very patient through this whole period, into our estimates for the year. Yeah. I wanna make sure I understood your question correctly. It was a roughly GBP 480 million payment that was received. Okay. To Phebe's point, that, the net impact of that to us after paying out supply chain, elements on the program, all of that's factored into the outlook that we have for the year. That 105-ish% conversion rate for the year that we talked about is now intact and all that much more certain, based on the activity in the first quarter. Your next question comes from a line of Pete Skibitski from Alembic Global. Your line is open. Hey, good morning, Phebe and Jason and Howard. Morning. Hey, guys. The issues on the Virginia supply chain, it seems like it's been a little bit of a black box. Just I was wondering if I can get more detail. Does it relate to multiple suppliers? Can you give us a sense of what parts are involved? Then are we feeling good that as the mix shifts to, you know, the Block Vs, that margins will improve there? It's multiple suppliers, some large and some small. We have, again, continued to work with the Navy to address, you know, the challenges that they all have faced. Even though, you know, you have different sized businesses, many of them have been confronted with the same labor dysfunctions that we saw coming out of COVID. The Navy has been providing, as well as the Congress, been providing funding to address some of the challenges within the submarine industrial base, and we're hopeful that over time, that will resolve. We'll continue to see, I believe, improvement, as we get into Block V and the supply chain stabilizes. We've got a ways to go there. Okay. I think importantly, and this is, the way we certainly think about it, Electric Boat just has to get better faster to overcome any unexpected additional future supply chain challenges that may hit us. Yeah. We're not gonna get into listing parts. This is an enormous supply chain, you can imagine, with thousands of suppliers all over the nation. That's fair. Can I one follow-up, Phebe? How are you judging the pace of hiring and the labor risk kind of through the midterm at EB, just given the kind of the huge increases in volume that are required there? Again, coming out of COVID, I think we all felt a little bit of the labor constraint, but one of the reasons that we saw increased revenue in this quarter was extremely strong throughput coming out of Quonset Point as a result of robust hiring that they have executed and the training of those workers so that they hit the ground running and we're able to execute additional throughput up at Quonset. We consider that a good bellwether for our ability to continue to hire to meet our needs. Your next question comes from a line of Robert Spingarn from Melius Research. Your line is open. Hi, good morning, everybody. Morning. Phebe, Combat's been discussed throughout the call, but just a couple quick things. Is it fair to assume that the book-to-bill will continue to be above 1 for this year and beyond, just given the strength? The second part of this is, as armament and munition sales grow, will they be margin accretive or dilutive to the overall segment? When you look at historically, combat orders, they tend to be pretty lumpy. I think the important way to think about it is the underlying predicate exists that it is an increasingly insecure and threat-driven environment, and that will drive additional orders. When those execute will be a little bit lumpy, but we expect to see continued demand. Including on the munition side. But we have planned in that for our plan this year, we've executed, we've anticipated margins that are pretty consistent with what they've been doing. It's just executing, operating, ensuring that we've got operating leverage, including on these new facilities that we're putting in place. Recall, this is a group that has extremely strong operating leverage and based on their efficiency, and blocking and tackling on the shop floor. We'll expect to see margins continue. Operator, we'll take this one last question, please, and then we'll wrap up the call. Certainly. Your final question comes from a line of Cai von Rumohr from TD Cowen. Your line is open. Thank you so much. Phebe, I'm still a little confused about your statement that Q2 earnings should be the lowest because pretty clearly it looks like Marine should be better absent the EAC charge. Combat usually is a little better, GDIT is stable, and you've highlighted aerospace, but the volume is gonna be higher than it was in the first quarter. Margins, given where the volume was, actually looked pretty good in the first quarter. It would seem to imply a pretty steep drop-off in margins. Could you give us some color in terms of what is creating that situation, and is that something we should be worried about will continue in the third and fourth quarter? I've tried to be pretty clear that we do not anticipate any, at Gulfstream, the margin performance in these 2 first quarters replicating in third and fourth quarter. We see a fairly strong ramp to increase margins. These margins are aberrational, and we do expect some additional perturbations on the supply chain and out-of-station work at Gulfstream, as well as mix issues. With respect to Marine Systems, it's material timing between first and second quarters. In technologies, it's a transition from mature programs that are winding down and being replaced by some follow on new starts. In each one of these groups, we are seeing a convergence of in the quarter, particularly, you know, lower margins and lower earnings and sales than we typically see. We usually have a steady build through the year. This is rather, as I said, aberrational, but we'll get through this. Importantly, we don't see these issues leading into third and fourth quarter. We anticipate a very strong third and fourth quarter, and that is unchanged. Thank you very much. Thank you for joining our call today. As a reminder, please refer to the General Dynamics website for the first quarter earnings release and highlights presentation. If you have additional questions, I can be reached at 703-876-3117. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.