Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 Huntington Ingalls Industries Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please be advised that today's conference is being recorded. If you need further assistance, you can press star zero at any time to reach an operator. I would now like to hand the call over to Dwayne Blake, Vice President of Investor Relations. Mr. Blake, you may begin. Thanks. Good morning and welcome to the Huntington Ingalls Industries Q4 2020 Earnings Conference Call. With us today are Mike Petters, President and Chief Executive Officer, and Chris Kastner, Executive Vice President and Chief Financial Officer. As a reminder, statements made in today's call that are not historical fact are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Actual results may differ. Please refer to our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results. Also, in their remarks today, Mike and Chris will refer to certain non-GAAP measures. Reconciliations of these metrics to the comparable GAAP measures are included in the appendix of our earnings presentation that's posted on our website. We plan to address the posted presentation slides during the call to supplement our comments. Please access our website at huntingtoningalls.com and click on the investor relations link to view the presentation as well as our earnings release. With that, I'll turn the call over to our President and CEO, Mike Petters. Mike. Thanks, Dwayne. Good morning, everyone, and thanks for joining us on today's call. I trust that everyone is staying healthy and safe. So before getting into the results for the quarter and the full year, let me take a few moments to reflect on last year. 2020 will be remembered as one of the most challenging business environments that we have ever had to navigate. Throughout the COVID-19 pandemic, we have made decisions that are focused on the safety and well-being of our employees, and I could not be more proud of the way our team responded to the challenges. While enduring the difficulties and uncertainties of the pandemic, we demonstrated an uncompromising commitment to safety, quality, cost, and schedule that allowed us to achieve significant milestones on our programs and continue making meaningful contributions to national security. Specifically, during 2020, we delivered three ships: the amphibious assault ship, USS Tripoli, the guided missile destroyer, USS Delbert D. Black, and the national security cutter, Stone. We also christened Virginia-class attack submarine, Montana, and we laid the keel for Massachusetts. Now, consistent with the strategy outlined during our investor day meeting last February, we continue to invest in unmanned and autonomy capabilities. We acquired Hydroid and established a strategic alliance with Kongsberg Maritime. We broke ground on the Unmanned Systems Center of Excellence in Hampton and closed the year by acquiring the autonomy business of Spatial Integrated Systems, an industry leader in unmanned surface vessel solutions. Now, let me share some highlights from the quarter and the full year, starting on slide three of the presentation. Sales of $2.8 billion for the quarter and $9.4 billion for the full year were approximately 14% and 5% higher than 2019, respectively, and they represent record highs for the company. The diluted EPS was $6.15 for the quarter and $17.14 for the full year. New contract awards during the quarter were approximately $3.5 billion, resulting in backlog of approximately $46 billion at the end of the year, of which approximately $20 billion is funded. Now, shifting to activities in Washington for a moment, we were very pleased that the fiscal year 2021 budget cycle ultimately concluded with the passage and enactment of defense authorization and defense appropriations measures. Both pieces of legislation strongly supported shipbuilding, including funding and authority for an additional Virginia-class submarine, the bundled purchase of LHA-9 with LPD-32 and 33, and long lead material for an additional DDG-51 class destroyer. The final bills also continue support for the dual purchase of CVN-80 Enterprise and CVN-81 Doris Miller, as well as the refueling and complex overhaul of CVN-74 USS John C. Stennis. Regarding the fiscal year 2022 budget cycle, we look forward to working closely with the new administration and Congress to best maintain the current fleet and build the future fleet that our nation requires. Now, let me share a few business segment highlights from the quarter. At Ingalls, NSC-9 Stone was delivered and sailed away from the shipyard in December. The DDG program remains focused on completion of production and test activities planned for this year, including sea trials for DDG-121 Frank E. Peterson Jr., major machinery layoff events for DDG-123 Lenah Sutcliffe Higbee, and the launch of DDG-125 Jack H. Lucas, the first Flight III destroyer. In addition, LPD-28 USS Fort Lauderdale is on track to complete sea trials later this year, while LPD-29 USS Richard M. McCool Jr. and LPD-30 USS Harrisburg continue to achieve their planned production milestones. In Newport News, CVN-79 USS John F. Kennedy is approximately 78% complete, and the team is aligning plans with the single-phase delivery requirements while continuing to focus on compartment completion and key propulsion plant milestones. CVN-73 USS George Washington is approximately 85% complete, and the team remains focused on final outfitting and test activities to support redelivery to the Navy planned for next year. On the VCS program, both SSN-794 USS Montana and SSN-796 USS New Jersey achieved key milestones this week. Montana achieved the float-off milestone and will continue its test program activities at the pier. This submarine is approximately 91% complete and still expected to deliver to the Navy in late 2021. New Jersey achieved the pressure hull complete milestone and is approximately 72% complete. The next significant milestone scheduled for this submarine is float-off in the second half of this year. In our Technical Solutions business, this was another busy quarter. As I mentioned earlier, we acquired the autonomy business of Spatial Integrated Systems at the end of the year. This acquisition complements our current unmanned capabilities with proven autonomy, sensor fusion, and perception capabilities, including multi-vehicle control. These combined capabilities will help us serve our customers' growing needs for unmanned undersea and surface autonomy solutions. Now, other significant milestones in unmanned systems included the delivery of new REMUS 100 unmanned underwater vehicles to the German Navy and opening of the first of two planned buildings on the 20-acre unmanned system center of excellence campus. These facilities will be used to assemble hull structures for the US Navy's Orca extra-large unmanned undersea vehicle program. Our nuclear and environmental business continues to leverage HII's nuclear operations DNA to take advantage of opportunities within the DOE and commercial nuclear decontamination and decommissioning markets. And finally, our defense and federal solutions business continues to receive very positive customer feedback under our persistent multi-role operations contract. Under this contract vehicle, we provide support for US Air Force intelligence, surveillance, and reconnaissance requirements in the European and the African theaters of operation. Now, as I prepare to close, let me thank our more than 42,000 employees for their sacrifices, hard work, creativity, and determination during a very difficult year. From the very beginning, we viewed COVID-19 as a human capital crisis, and we made the decision to give our workforce the flexibility they needed to deal with the disruption in their personal lives. This, in turn, allowed us to preserve the significant investment we have made over the past five years, hiring, training, and qualifying our workforce so that they would be available to execute our record backlog as we emerge from the pandemic. After finishing 2020 with two consecutive strong quarters, I am convinced more than ever that we have a very solid foundation and a bright future for our business. The key attributes that support this foundation include a historic $46 billion backlog, a strong management team, a well-trained workforce, significantly recapitalized and more efficient shipyards, expanded unmanned capabilities, and a very strong balance sheet. We enter 2021 as a stronger and more agile company with positive momentum and an enormous opportunity to leverage our historic backlog to generate strong free cash flow and create long-term sustainable value for our shareholders, our customers, and our employees. Now, before I turn the call over to Chris, let me make a few comments about his transition to the newly created role of Chief Operating Officer. Chris will oversee the company's three operating divisions and work closely with the division presidents to drive execution on our historic backlog. And I see this as the next step in the maturation of HII. Our governance model has typically been very federated, pushing as many decisions as far away from the center of the company as possible. But what we are hearing from our customers is that they are looking for us to be able to bring different parts of our business together in order to solve their complex problems. They actually see us as more of an integrated whole than as a collection of businesses, and it's up to us to find ways to create value from this opportunity set by smartly collaborating across our shipbuilding and Technical Solutions segments. And let me also welcome Tom Stiehle to the role of CFO. Tom has done a fantastic job as the CFO at Ingalls, and I am confident that his strong financial and operational background makes him the right choice for this position. And now I will turn the call over to Chris for some remarks on the financials. Chris. Thanks, Mike, and good morning. Today, I will briefly review our Q4 and full year results and also provide some additional information on how we view 2021 and our longer-term outlook. Beginning with our consolidated fourth quarter results on slide four of the presentation, our fourth quarter revenues are $2.8 billion, increased 14.3% compared to the same period last year, primarily due to growth at Newport News, driven by increased material volume for CVN-80 and CVN-81 and higher volumes for the planning effort for the RCOH of CVN-74, as well as higher volumes for the Columbia and Virginia-class submarine programs. Operating income for the quarter of $305 million increased by $119 million from the Q4 of 2019, and operating margin of 11.1% increased 335 basis points. These increases were primarily driven by higher risk retirement across numerous Ingalls programs and improved performance in Technical Solutions, primarily due to Q4 2019 results that included an asset impairment related to our oil and gas business, as well as a loss on a fleet support contract. Q4 2020 results also included a more favorable operating FASTCAS adjustment. Moving on to consolidated results for the full year on slide five, revenues were $9.4 billion for the year, an increase of 5.2% from 2019. The increase was driven by growth across all segments, including higher aircraft carrier, submarine, and fleet support revenues at Newport News, higher surface combatant and amphibious assault ship revenues at Ingalls, and the inclusion of Hydroid in technical solution results. Operating income for the year was $799 million, and operating margin was 8.5%. This compares to operating income of $736 million and operating margin of 8.3% in 2019. The increases were primarily due to a more favorable operating FASTCAS adjustment compared to 2019, partially offset by lower segment operating income, including the impacts of the second quarter reset to the Virginia-class submarine program cost and schedule expectations. Our effective income tax rate was 17.8% for the quarter and 14.1% for the full year. This compares to 13.4% and 19.6% for the Q4 and full year 2019, respectively. Turning to cash flow on slide six of the presentation, we ended the year with a cash balance of $512 million. During the Q4, as previously noted, we did delever by redeeming $600 million of our senior notes that were due in 2025. As a reminder, that call premium added approximately $15 million of incremental interest expense in 2020. Cash from operations was $602 million in the quarter, and free cash flow was $469 million. For the full year, cash from operations was $1.1 billion, and free cash flow was $757 million. 2020 free cash flow benefited significantly from the receipt of approximately $160 million of net accelerated progress payments and the deferral of approximately $130 million for the employer portion of payroll taxes in 2021 and 2022. Cash contributions to our pension and post-retirement benefit plans were $246 million in the year, of which $205 million were discretionary contributions to our qualified pension plans. During the Q4, we paid dividends of $1.14 per share, or $46 million, bringing total dividends paid for the year to $172 million. Prior to pausing share repurchases in mid-March, we had repurchased 391,000 shares at a cost of $84 million. While we did not repurchase any shares during the fourth quarter of 2020, we did reinitiate repurchases earlier this year and continue to view share repurchases as an integral part of our capital allocation strategy over the long term. On slide seven, we have provided an updated five-year pension outlook, and on slide eight of our presentation, we have provided details on our 2021 outlook. In that regard, we expect 2021 shipbuilding revenue to be between $8.2-$8.4 billion, and shipbuilding operating margin to be between 7%-8%. Additionally, in 2022, we expect shipbuilding operating margin to be in the low 8% range, with steady improvement in subsequent years as Newport News programs mature. For Technical Solutions, we expect 2021 revenue to be approximately $1 billion. We expect operating margin to be between 3%-5%, and EBITDA margin to be between 7%-9%, with the expected year-over-year improvement driven by improved performance and our portfolio shaping actions. Following the normal cadence for Technical Solutions, we expect that first quarter operating and EBITDA margin will be below the low end of the annual guidance range. Next, I'd like to provide some additional context on our long-term free cash flow outlook, which you'll find on slide nine. We expect that 2020 and 2021 will generate between $900 million-$1 billion in free cash flow cumulatively, and that over the five-year window from 2020 through 2024, we continue to expect to generate approximately $3 billion of free cash flow. As indicated on slide nine, our 2020 through 2024 free cash flow forecast is supported by long-term average annual revenue growth in shipbuilding of approximately 3%, as well as Technical Solutions top-line growth of 4%-5% annually, combined with margin expansion in both shipbuilding and Technical Solutions. Additionally, we expect capital expenditures to decline from approximately 3.5% of sales in 2021 to approximately 2.5% of sales in 2022 and beyond, and we expect continued strong working capital management. Finally, on slide 10, we have provided an updated view of anticipated major shipbuilding program milestones for 2021 and 2022. As you can see, 2022 includes more deliveries than 2021 and supports our expectation for incremental margin expansion and free cash flow generation in 2022. Now I'll turn the call back over to Dwayne for Q&A. Thanks, Chris. As a reminder to everyone on the call, please limit yourself to one initial question and one follow-up so we can get as many people through the queue as possible. Operator, I'll turn it over to you to manage the Q&A. So we'll now begin our question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Our first question today will come from Jon Raviv with Citi. Thanks and good morning. Good morning. Hey, and also congrats to Chris and to Tom. Looking forward to it. Can you clarify, Chris, just on the 7%-8% in 2021, how much net negative is in there from COVID-type impacts? And you mentioned, I think, in the slide that you're not expecting much in terms of reimbursement. And then also just thinking about kind of like the improvement thereafter, the low teens, is that assuming no reimbursement? So yeah, just the first question on that net COVID impact. Yeah, so we don't expect any reimbursement within our guidance related to the COVID impact. Again, I split that kind of into two buckets. One is immaterial, which is the cleaning sort of expense that we'll eventually get through, and there'll be some upside to that, but I don't think it's material, and then delay and disruption. So there's really no negative performance impact assumed in the 7%-8%. Okay. And then just turning to capital deployment, you're resuming repo in 1Q. You've done a couple of things in TS over the years, mostly smaller items. There's a lot that was, I mean, but also a year ago you talked about expanding TS and the real focus being there. Lots of activity in that TS-type market. What kind of things are you looking for in terms of capability or size, and to what extent has the pandemic or what your Navy customer is saying, or quite frankly, your stock price changed the math around what option you find more attractive than another when it comes to capital deployment? Yeah, so first of all, starting with where we think the opportunities are, we continue to see opportunity in the unmanned space. Whether that's a technology capture or portfolio expansion, we're just kind of keeping our eyes open on how do we make sure that we've got the right footprint of capabilities and the right portfolio to go support where we think the Navy might be going. We believe that our energy business, our Department of Energy business, and our nuclear operations business is finding its stride very well, and we think that there's great opportunity there, especially in environmental management moving forward. So we're kind of watching that very closely right now. And the support for the federal government across all the rest of our solutions with cyber and IT, we've demonstrated now that we know how to run that business, and so we're watching that. That's a pretty dynamic space right now, and valuations are kind of challenging, and so we're still going to continue to think about what are the capability sets that we need as opposed to how big do we need to be. And that's kind of the way we're thinking about it going forward. Yeah, Jonathan, I could add. I consider it really kind of a back to normalcy from a capital deployment standpoint. We're finishing our capital program that we think has been very successful over the last few years. The dividend will be increased, but more modestly going forward, and then we're going to be very opportunistic in share buyback and then evaluate the markets and opportunities, as Mike indicated. Thank you. Our next question comes from Carter Copeland with Melius Research. Hey, good morning, gentlemen, and congrats on the moves, the promotion, Chris, and welcome, Tom. Thanks, Carter. Good morning. Just a couple. Could you tell us the anticipated timing on the delivery of New Jersey? Is that a second-half 2022 event? And then just with respect to the various programs, outside of Montana and New Jersey, are there any other boats that you would consider significantly below the company average margin at this point? Yeah, so Carter, I really don't want to comment on individual ship margins, but New Jersey is mid to late in 2022. Okay. And then, Chris, just as a clarification, as always, can you give us the EACs, favorable and unfavorable, for the quarter? Sure. Positive was 88, negative 42 for a net, 46. Over 90% of that net was Ingalls. Ingalls had a very good Q4 with delivery of NSC9, and then LPD 28 and 29 are performing very well down there at Ingalls. Okay, great. Thank you for the color. I'll let somebody else ask. Sure. Thanks. Our next question will come from Myles Walton with UBS. Thanks, good morning. Two quick ones. One is on the volume side. Obviously, we baseline them higher since the summer for both 2020, which achieved in 2021, and just curious where the upside you're seeing most pronounced. And then secondly, Chris, I know that your challenge you were anticipating was being able to walk people down in 2021 cash flow and then back up the hill in 2022. Can you give us a sense? We can add all the other items, but give us a sense of the swing in working capital that's embedded sort of in your expectation over those couple of years. Thanks. Yeah, so let's start with the volume. '80 and '81 had some material volume that showed up in 2020 that we were planning around the end of the year, so we had some upside there. And then 2021 is just simply a function of our plans getting complete, our labor showing up, and being confident in our labor forecast for 2021 and working through the backlog. From a cash standpoint, you're right. We gave you pretty much all the information going from 2020 to 2021 and then 2020 to 2022, actually. So I'll start with 2020 to 2021. It's pension and the CARES Act working capital. Capital is about the same. And then when you go to 2021 to 2022, it just simply reverses. The pension actually is a bit of a tailwind, and then you get some working capital help. I don't want to cite a specific number, but we've done very well in working capital and we'll continue to do that. Remember, we do have significant deliveries in 2022. We have four ships that are going to deliver, so it'll be helped there. So we think it's a natural lift from 2021 to 2022 based on the information that we provided, our ship deliveries, which will drive working capital, and then our natural lift in our top and bottom line. So I think that'll get you there from a free cash standpoint. We think it's pretty logical and pretty obvious when you go through the modeling. One clarification. The footnote on slide six talks about the advances you got from the progress payments, but it talks about the suppliers being accelerated as well. Was that a net push or a net positive to the 2020's one? It's a net positive. Okay, thanks. Our next question comes from Seth Seifman with JPMorgan. Thanks very much, and Good morning. Good morning. Wondering about, if you look at it and the growth, and you talked about the sort of 3% annually over the course of the plan in shipbuilding, and with the higher 2020 and the midpoint of the 2021 guidance, that's a lower number for 2021. I guess, is the implication that it's 3-ish% in the remaining years of the plan? Is it the implication that the CAGR would be sort of 3%, including the sub-3% year in 2021? How do we think about that kind of growth forecast? Yeah, so remember, we did have that material acceleration from 2021 to 2020. So net net, it doesn't really impact our total outlook. We think long-term, next 5 to 7 to 10 years, actually, we're a 3% growth business in shipbuilding. It's going to be lumpy from year to year, but long-term, it's 3%. Okay, even up to 10 years or so? Sure. Yeah, I mean, think about the backlog we have. There were discussions that potentially, because of the budget increases that the Navy had, that we would be growing in excess of what we are now. We've consistently said that 3% is probably the right way to think about the business. Okay. And then following up on that, I think the headcount for the year seemed like it was about flattish. If we think about that 3% growth rate over kind of the long term, how do you think about headcount growth over that period? I think the first thing is you almost have to go back to the previous universe. We hired almost 25,000 people before the pandemic in an environment where there was as low as 3% unemployment. So we know how to create workforce. It's frankly probably the most significant core competency of our shipbuilding enterprises is getting workforce created. Since the pandemic started, I guess, in March, we've still hired about 3,000 people. And so we believe and have a lot of confidence in our ability to expand our workforce where we need to. We're pretty good at throttling the pace of that, and we're actually exceptional, I believe, at training that workforce. So I think that there will be workforce expansion that coincides with the growth in the business, but we think that's well within our capacity to do that. Frankly, we're probably ahead of many folks in the industry right now in terms of having already hired a lot of those folks. We're on our way. Great. Thank you very much. You bet. Our next question comes from George Shapiro with Shapiro Research. Yes, good morning. Chris. Morning. You guided to $7.9 billion for shipbuilding revenues in Q3, and obviously, it wound up a lot higher than that. In a business that's pretty predictable, can you tell us what happened to give you that much stronger growth than what you expected? Yeah. Thanks, George. As I mentioned previously, CVN-80 and '81 had some material that would do right around the end of the year and accelerate it into 2020. So unfortunately, we can be a bit lumpy at times. We're pretty good at forecasting our labor and our labor demand and how we're going to end up from a labor standpoint. But material can catch you a bit. You got large items that can deliver towards the end of the year, and it just showed up in December, which had us higher than our expectations. Okay, and then one for you, Mike. The Senate just approved Hicks for the Deputy Secretary. I mean, she's been kind of outspoken and not being a big fan of carriers. Can you just give us your color as to how you think this will shake out with the new administration? I think leading towards a great question, and we could probably talk about this all day, but I think we're starting from a place where the previous administration was looking at what's going on in the world and had come to the conclusion that the Navy needed some priority in terms of budget allocation and resources. If anything, I think what's going on in the world since the election probably just reinforces that view. New players will look at that differently, and they may have a different set of priorities, but at the end of the day, our principal role here is to support the Navy in whatever it is that they need to go to deal and support our national security. That's what we'll do. Particularly around aircraft carriers, I think the value of the carrier and the capability of the carrier is well understood by everybody in the industry, and we'll see how that all plays out. But we like the work that we're doing. We're very proud of the ships that we're producing. Ford is a tremendous ship right now where it's been providing training support and demonstrating all the new technologies. I believe the Navy could tell you that it's been at sea as much as any other ship in the Navy last year. And so I think the carrier's in a good place right now relative to how the Navy's thinking about what they need for our national security needs going forward. But that doesn't mean anything about the rest of our portfolio. I mean, we really have strong offerings and strong parts of our portfolio that support the broad range of Navy requirements, whether it's submarines or amphibs or destroyers. If the Navy is going to be a priority in our national security posture going forward, then we're going to be right in there with them. Okay, thanks very much. You bet. Our next question comes from Doug Harned with Bernstein. Thank you. Good morning. Good morning, Doug. At Ingalls, you're right in the transition to flight three on the DDGs and flight two on the LPDs. Can you describe the differences when you're with DDG-125, LPD-30? I mean, should we expect any pressure on performance as you move to these new ships? Yeah, I think it's a good question, Doug, but the whole point of the way the Navy worked with us to make those transitions has been to try to do that as gracefully as possible. Yes, DDG-125 is the first flight three ship, but they've been actually incrementally inserting flight three technologies into the ships ahead of that. And so trying to make that as graceful as possible has, I think, will pay big dividends. And as far as the LPDs go into flight two, I mean, just the fact that we're doing LPD flight two is a punctuation on that statement that they made it graceful. Instead of going off and doing a whole new class design and starting all over, you just basically took the LPD flight one and then you rescoped it to do flight two, and that's definitely in our wheelhouse. And so we feel pretty good about both of those. We actually think it was very thoughtful on the Navy's part to do it that way with the LPDs. It was the Navy and the Marine Corps that did that. And we think that's the advantage of that's the Navy's understanding of taking advantage of serial production as opposed to going back to the blackboard and starting all over and trying to redesign it from the ground up. In both of those cases, you're going to get significantly improved capability at significantly better affordability in a lot faster timeframe. I mean, I think that's the wave of the future, and in some ways, it's a throwback to the past because that's how we used to do it. If you look at Newport News, and if we go back early in the year when you faced the complexity of the fight going on there, over the course of the year, can you talk about how you stand right now as you look forward? I'm not sure I know where to start. I would start with the pandemic itself really put us in a place in both of our shipyards to rethink the way that we do not just crisis management, but management overall, and we started thinking through how do leadership teams rally the team to support priorities, how do we allocate resources to the things that need to be done, and I mean, a lot of us have messed around with youth soccer, and when the kids are young, all the kids chase the ball. What the shipyards have really gotten very good at is making sure that folks play their positions, stay in their lanes, focus on what's in front of them, meet their milestones, and drive through the gates that we've set up in front of them. I have to say that the pandemic has brought that to a much clearer focus for us because we had to do that with people. I'm actually very excited about the way ahead because of the fact that this team is now well tested over the last year of doing exactly the kinds of things that we need to get done to support all this broad array of programs that we have. So, you see the Virginia-class is pretty on track now after the challenges from last year? I mean, I just want to make sure how we think about that. Yeah, I mean, I think we had to reset the risk register in Q2, but now that it's been reset, the milestones that we've set for ourselves, the pace that we have, not just on the first ship or the second ship, but all the way through the class, I think we're meeting all those milestones, and we're meeting them with some gusto, and I'm pretty happy about that. Okay, great. Thank you. You bet. Our next question comes from Pete Skibitski with Alembic Global. Hey, good morning, guys. Nice quarter. Nice to see you. Hey, Mike, on the creation of the COO role, was there any particular existing programs or future programs that kind of drove the need to create that role? If so, I'd love to understand which ones. You talked about it kind of at the beginning in terms of integration, and I just thought about pie in the sky if they go towards this kind of light aircraft carrier model for distributed firepower. Maybe that would be a key integration project in terms of Newport News with the nuclear and the big decks at Mississippi. So just wanted to get your thoughts. Yeah, it's an interesting question. I'm not sure I could say that it was one particular item. What we were seeing and what we were hearing from our customers is this capability in this part of your business is something that we could use in this part of your business, whether it was the way we were buying material or technology that we were looking at, additive manufacturing, maybe some artificial intelligence, our information management systems, those kinds of things. It's more like there were several of those that when they added together, it made more sense for us to start thinking about it in terms of an integration and not as a straight-up customer directly facing the particular customers. I actually kind of been leaning towards this for the past couple of years as we've kind of evolved. So this was not a "I woke up one morning and we just need to go do this." This has been something that we've been kicking around because we've had great success with governance that said, "Push and delegate as much authority and accountability as far away from the center of the organization as you can." And that creates business units that are very focused on their particular customers. What we're seeing, though, is that our customers are starting to become a little bit more integrated, and the problems they're facing are becoming more complex. And so as a result, we need to bring a more integrated approach to solving that. And I look forward to having Chris in that role because I think it's going to be we were doing some of it, but we were probably missing some of it. And so I think that I'm looking forward to seeing us capture more of that opportunity. Great. Thanks, guys. You bet. Our next question comes from Noah Poponak with Goldman Sachs. Hi, good morning, everybody. Morning. Hey, Chris, could you just itemize and quantify everything on the cash flow statement that was non-recurring in nature or a pull forward in 2020, and then also the reversal of them in 2021 just to get level set on that? Yeah, so in my script, I called out the two main things, which was the progress payments, which I think was about $160 and then $130 for the CARES Act payroll tax. Those are the two main things on the balance sheet. Did those completely reverse in 2021, or is it partially 2021 and partially 2022? We're estimating that the progress payments reverse in 2021, but obviously only half reverses for the payroll tax. Half 2021, half 2022. Yes, yes. Okay. And then in the slides, you itemized continued strong working capital management. Can you give us a sense or quantify how much positive change in working capital you're looking to extract over the next few years? Yeah, I don't want to give a specific number for that, Noah, but I will point you to the deliveries that start to show up in 2022, and that'll get us around the low end of our range or potentially even better in some years from a working capital standpoint. Are the deliveries in 2022 front-loaded, back-loaded, or fairly evenly spread through the year? Pretty balanced. '21 and '28 should happen right at the beginning of 2022, actually, and then '73 is more Q2-ish, and '96 is later in the year. Okay, and Mike, just kind of bigger picture and longer term, what is a realistic percentage of the United States Navy that is unmanned and autonomous down the road? And how are you thinking through the different competitive landscape in that versus manned? Yeah, the first question, I don't know how to answer that because you could answer that in terms of numbers of platforms. You could answer that in terms of capability and regions that you can handle from an unmanned. So there's sort of a mission kind of thing. So I'm not exactly sure how to answer that directly. The way we think about it is really about the capability set, where the technology is, what are the kinds of things that we think are going to be useful and applicable to the mission of the Navy. And at this point, if you kind of look at the timeline, I think if you go back to before we acquired the Columbia Group down in Panama City, our presence in the unmanned space, the Huntington Ingalls presence in the unmanned space was zero. We were cold-ironed in that space. We started with acquiring a little bit of capability and a little bit of technology. We got to know the customers. We got to understand who they were and what they were trying to get done. And fast forward to where we are today, we have strong offerings in every size and capacity and capability in the unmanned undersea space today. That includes the work that Hydroid does. That includes the work that we're doing in support of Boeing on the Orca program. And we've done that in, say, five or six years. That shows that the business itself is accelerating, and that shows our commitment to it. So we're going to remain committed to it. We think that the unmanned undersea space is conceptually ahead. It's a challenging space, but from a CONOPS perspective, I think it's conceptually ahead of the surface, the unmanned surface space. We do have a contract to work with the Navy in that area as do several other companies. But we're going to continue to invest in the autonomy and build the capability. And frankly, I think this is going to be one of those where it's a bit of a self-fulfilling prophecy. As we demonstrate more capability and capacity in this space, it's going to become, as we, Huntington Ingalls, and as we, the industry, demonstrate that, it's going to become a bigger and bigger part of the Navy's plan. What's the limit of that? I don't know. Where does it go? I don't know. But that's the mission in front of us right now is to mature that. Hey, Noah, I'd like also to add that unlike our manned platforms and unmanned, especially unmanned undersea, it opens up international markets for us. There's significant international customers that are interested in those products. That's also very interesting for us. Right. That is. Yeah. Okay. Okay. Thanks so much. I appreciate it. Thank you. Thanks, Noah. Our next question comes from Richard Safran with Seaport Global. Hey, good morning, everybody. Thank you. Mike, this may be a bit of a question for you considering you were just referencing it. On the chatter about the Navy looking for a smaller and conventional carrier, I seem to remember reading about this same idea back in the early days at Nimitz. What I wanted to know from you is if you could comment if you think this is a serious proposal by the Navy or maybe an idea that's possibly been floated in reaction to some early issues that you had with the Ford class. First of all, I think let's give the Navy some credit. They're always looking for ways to accomplish their mission. They're always looking at trying to figure out ways to do that in a more affordable way. And so the question of once we decided 50 years ago, almost 60 years ago now, to create a nuclear-powered aircraft carrier, you always had to kind of compete. That always was in a competition with the conventional carrier in terms of affordability. And on the one hand, the budget folks can look at it and say, "Well, it's cheaper to build a ship without reactors in it." But on the other hand, you look at the set of capabilities that that brings to the carrier. And over the last several decades, this analysis has been done. You're right. It was done back when Nimitz happened. It was done, frankly, when Enterprise was done. And it's done all the time. But what it comes down to, essentially, and kind of, again, this is a conversation going on for a week, but what it usually comes down to is that can you get 80% of the capability for 80% of the cost? And the answer is almost always no. Because it turns out that the cheapest thing that we do in the carrier business is build volume. And so if you want to take a carrier that's 100,000 tons and you want to drop it to pick a number, 60,000 or 70,000 tons, and you want to take the reactors off of it, you've just completely changed the capability set. And you're still going to spend a lot of money building that 60,000-ton ship. So I think that it's a serious look. I think every look is serious. We stand ready to support the Navy in whatever their mission is and wherever they need to go. We're very proud of the Ford. And I would tell you that as a lead ship, the Ford cost was too high. We made significant capital investment to drive that cost down inside the shipyard. And we've taken 15% of the man hours out of the Kennedy, and between Ford and Kennedy. And we've streamlined the supply chain. And so we're taking cost out of that ship. The next two ships were bought on a single contract. And the Navy advertised that not just including our savings, but all of their savings when they bought it smarter, they saved $4 billion. So as the Ford becomes more affordable, that makes that comparison even tougher. Having said that, if the Navy chooses to go down that path and they think that's the way that they can meet their mission requirements most affordably, we're their partner. And we're going to support them all the way. Thanks for that. And just one other strategic question for you. The focus at Huntington is always very large, low production rate, high-valuated content ships. Unmanned systems, however, generally have much lower valuated content, but I'm thinking higher production rates. So just kind of curious if you could comment about what that says about long-term margins at TS versus traditional shipbuilding. Yeah. I mean, well, so let me start, Mike. Did you want to add in that the long-term margins in TS will float up? We're at 3% or 5% return on sales now. We like to think about it as even as a percent of sales because we have intangibles flowing through the income statement there. But we do think there's opportunity in unmanned from a margin standpoint, especially with international content. Traditionally, you earn more on international products. So yeah, we do think there's opportunity there. But remember, TS is a blended margin story. So we think that 3%-5% return on sales right now is the right way to think about it. But it could grow from here. I would just make two points. First, that you touched on a key issue is that we are keeping the unmanned business separate from shipbuilding for almost exactly the reason that you said. The unmanned customers are very different than the shipbuilding customers. And so we want to have customer-facing organizations that respond appropriately. And so that's been very successful for every business inside of TS, including unmanned. When we created TS, we've seen significant improvement in terms of being able to respond to customers and understand what their capabilities are by either acquiring that business or getting it out of shipbuilding. The second thing is that I would argue that the TS story is it is about margin, but it's also about growth. I think the unmanned area for growth is going to be pretty significant. Pick your multiple, but over the next five years, I think that what we're spending in unmanned today as a nation is going to be small compared to what we're spending five years from now. And so that's at least as much relative to unmanned. That's as much an important part of the story as it is about the margin. Thanks very much for that. That was terrific. You bet. Our next question comes from Robert Spingarn with Credit Suisse. Hey, good morning. I want to follow up on what you just talked about. Just going to slide nine, a couple of comments here. I don't know, Mike, if this is you or Chris, but on the unmanned side, if this is going to grow and the spending is going to rise, might we not see CapEx not drop to 2.5% of sales? I mean, maybe magnitude doesn't compare to the core shipbuilding business, but wanted to ask about that as unmanned grows. And then also your comment about the shipbuilding margin in the low 8% range with steady improvement subsequently. I just wanted to marry that to what you just talked about with the carrier deal. With these double-contracted carriers, should we not see the kind of volatility? I think you were just suggesting this, that we've seen on 79. Let me try the first one, Mike. Yeah, that's, we've already, from a capital standpoint on unmanned, we've made the significant investment, we think, with the center of excellence. We don't see any additional capital investment at this time in the unmanned space. If you want to talk about everything. Yeah, I just add, and that does depend on the rate of growth in the unmanned space. I mean, we stand ready to make investment if we need to, but there's nothing there that we see right now. Relative to the carrier business, absolutely. The two-carrier ship contract was by far the most effective way and most affordable way to buy the ships. And it does bring a chance for it to be much more predictable going forward. It is a pretty heavy contract to have on the beginning side of your business, which is you know well how we are very conservative at the beginning of our programs. And these two ships, the second one doesn't deliver until 2032. But I think it's going to play out very well for us and could definitely go a lot better. Even better, it will certainly be better than what happened on Ford and will be even better, I believe, than what we've seen so far on 79. Okay. Thank you, Mike. Thanks, Chris. Bye. Our next question comes from Joseph DeNardi with Stifel. Hi, thanks, guys. Good morning. Good morning. Chris, now that you've got the 79 contract modification done, can you just talk a little bit about what that means? Is it lower risk, or does the risk just get pushed to the right, or is it neither? And then does the low 8% margins at Newport assume improvement on carriers that just primarily have Virginia-class? Yeah. So it absolutely pushes the delivery, excuse me, the test program, to the right. And when you do that, you're moving your risk registers to the right, and it delays the margin expectations for CVN-79. I don't want to make any specific comments on programs' contribution to the low 8%, but you'll see a general lift in Newport News across all their programs, actually, as they have stabilized this year and into next year. Okay. That's helpful. And then, Mike, in response to Richard's question, you mentioned that the Navy gets $4 billion in savings from the block buy. Can you talk a little bit about kind of what your shareholders get from that? Why isn't what they get the potential for higher margins in the future if you all can execute effectively? And then can you talk about the degree to which that block buy ensures more serial production and less maybe technology or requirements change ship to ship, if at all? Thank you. Yeah. So I'd say, first of all, the $4 billion is a Navy number. And while it's sometimes hard to remember, we're only a part of the total carrier cost. There's a significant government-furnished equipment set that goes on the ships, including the reactors and the radars and all that sort of stuff. And so when the Navy added it all up, it was the savings associated with our contract, which we took from the efficiencies of learning curve in labor and the efficiencies of economic order quantities in the supply chain. And we believe that those are pretty well understood. And that's what drove our piece of that contract. And now what do the shareholders get from that? They get a workforce that's not building the last carrier. They're moving from one to the next. And so you're not having to go retrain them and get all of that sort of stuff. So it allows for, over time, better performance on the program. And that's where we're headed. It's not better performance in 2020 or 2021 because that's the very beginning of the program. But we see these as they mature. They're going to become very important to us. Okay. Thank you. You bet. Our next question comes from Gautam Khanna with Cowen. Hi. This is Scott on for Gautam. Hi, Scott. In a similar vein to Robert's question, just looking at the CapEx, is the 2.5% number the right way to look at the long-term CapEx number for the business, or is that more of just a FY 2022 to 2024 type number? And is the longer-term CapEx more of a 3%-4%? I think we've made significant capital investment over the last few years. That's about $2 billion we've invested in both shipyards. That's about complete. So I think that that 2.5% lasts for quite a while, actually. Now, as Mike indicated, if we see opportunities to invest for future programs, we could potentially do that. But for our current backlog, we're pretty comfortable where we're at for a pretty long time. Okay. That's the only question I had. Thank you. All right. Thanks. At this time, I'm not showing any further questions, and I would like to turn the call back over to Mr. Petters for any closing remarks. Thank you all for joining us today. We really appreciate your interest in what we're doing and appreciate the work that you all do. We hope that everyone out there will continue to stay safe in this dynamic environment. We look forward to that time when we can all get back together again. Hope everybody has a great day. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.