Thank you. So next up we have L3Harris, and we have Chris Kubasik, Chairman and CEO, and Kenneth Bedingfield, CFO. Do you have any forward-looking statements, or are we good to go? I think we're good to go. Okay. Great. So I wanted to—we'll start high level. I wanted to ask you about, you know, the budget situation. The clock is ticking, you know. I recall in 2013, I think it was, no one thought we would have a sequester. Then we had a sequester this year. You know, I think the House was out on recess for two weeks now. We've got the Continuing Resolution that's gonna expire here, and then obviously Congress has to pass, somehow pass all 13 appropriations bills. So I guess, what are you hearing with regard to getting this all done, and what happens, what's it mean for you guys if we actually have a sequester? Yeah. Well, first of all, good morning. Thanks for the invite, as always, David. This is a unique, unique situation. As you said, we have to get all the appropriation bills passed by 2023. I don't think they're gonna all be passed on the same day. I think they'll be in a couple different tranches. But it is a unique situation, Speaker Johnson, and all the leaders continue to say their top priority is to get these bills passed. So we're kinda going on that assumption. Now, if we go into a sequester, you know, we'll talk about a 1% cut relative to the 2023 budget. So just using the top line, you know, the President's budget's $842 billion this year. Last year was $816. So with a sequester, the budget for the DOD would be $808. I think the question is what and how does the Department handle that money? I think they'll take care of the troops first. They'll take care of O&M. So I believe the investment accounts will clearly be hit much more than the 1%. So that's the part that we need to figure out and see. Our guidance that we gave in January contemplates a budget in the end of Q1. So it'll be interesting to see how that plays out. Clearly, they'll have to truncate programs or stop new starts and all that. So we kinda have to wait and see. DOD's keeping close to the vest what they would do, but I'm sure they're running scenarios. Right. Yeah. We've seen some stuff around, looks like, F-35 and canceled FARA and some, seems like they're moving in that, or at least preparing for that potential. So absent that, you know, you talked about that, you know, your guidance isn't incorporated. You guided 3%. 3% organic growth. Yeah. I like to think I'm guiding 8%. Go ahead. Right. 3% organic growth. I think, you know, last year was much higher than that. We still have this big, you know, bucket of outlays to come through that, you know, still haven't kinda caught up to where the budget actually even is. So however you wanna take it, why does growth, you know, decelerate that much this year? Yeah. Well, the three things we're focused on is growing the top line organically, which you're doing, improving the margins, which we've committed to not only for this year but through 2026, and increasing free cash flow 10% this year. So when I look at the top line growth, I look at the margins, and I look at the free cash flow growth, I think we've got a pretty good plan and strategy to execute upon. You know, the big areas where we're growing above the 3%—we've talked about this for years—is in the space domain. So we've been very successful with new opportunities as we've executed our space strategy. Our tactical radio business, we had a big catch-up last year as we were impacted by supply chain in 2022. So we're still growing above the 3% in TCOM but less than we did in 2023. And then the Aerojet Rocketdyne organically is above the 3%, obviously inorganically since we bought them in July. And then the last one is our broadband communications, which is where we bought the resilient comm business via SATCOM Tactical Data Link. So those four are outgrowing. Airborne is pretty flat. The FAA business is flat. Very diverse portfolio. Comes out to 3%. Be good to have a budget and get out of a CR, you know, before seven of the 12 months of the year are done. So we gotta factor that in as well. Right. Maybe, Ken, you talked a little bit on the call about kinda the first half versus second half dynamic in terms of the growth. You wanna expand on that a little bit? Yeah. Just as we look at the growth relative to 2023, we do see that, you know, similar to the 2023 profile, it'll kinda build as we, you know, progress through the year. You know, you asked about the growth, and I think Chris, you know, appropriately answered. The only thing I would add to that would be as we look at our, you know, LHX NeXt cost savings program, as we are reducing our costs, that obviously in this, you know, long-term contracting business has an impact on, you know, compressing sales a little bit as well. So that's a little bit of a headwind to growth as well. But we had a, you know, a solid growth early in 2023, and we saw that build in 2024. You know, we see that kinda similar progression through the year. You know, just as we think about the business, again, we do have a complex and diverse portfolio, which I think at a high level means, you know, it's probably harder for us to consistently outgrow the market. You know, we've always got programs that are growing. Chris mentioned some in particular, you know, space and some of the communications businesses that are growing, you know, faster than the market, and we've got some that are a little bit flatter. And I think from a growth perspective, that says, yeah, we may look more like what the market is. But if we can execute on the strategy to increase the margins, really execute on the LHX NeXt cost reduction program, and then create that ultimate, you know, 10% free cash flow growth for 2024 but accelerating towards our $2.8 billion forecast or target for 2026, that's really where we see the value. And I think, you know, as we think about the business, we're prioritizing profitable growth. We're prioritizing the ability to realize the right risk return equations in the bids we're putting forward over just growing the business. And I think that's the discipline that Chris is driving down through the team, and, you know, that's what we see in terms of our growth profile. But I think if you look at us relative to our peers, where we really differentiate is our ability to accelerate the margins and ultimately that margin dollar growth. Yeah. So you touched on this a little bit. I mean, what everyone is concerned about, you know, with regards to the entire industry is, you know, some of these fixed-price development contracts that seem to have been taken on over the last, you know, 5+ years or so that are now coming through. I guess, what have you done to kind of change your process in terms of bidding, reviewing programs that, you know, should make us feel comfortable, I guess, that the worst is kinda behind at this point, at least from your portfolio? Yeah. Let me start. Maybe, Ken, we'll chime in. You know, so we've changed our process over the last couple years. We have multiple reviews. So when the RFPs hit, we immediately meet to try to figure out, you know, can we do this work? Should we do this work? And then do we wanna prime? Do we wanna sub? Do we wanna be a merchant supplier? What is the best business model for L3Harris and, you know, for the customers? So I think we're unique in that position. We do about 62% prime, 38% sub/merchant supplier. So we're kind of, well, we are agnostic, what makes the best business sense. And, you know, in the space world, we've talked about, you know, moving up the food chain and being a prime versus just selling antennas as an example. We've lowered the delegations of authority. So we have, I mean, we literally put in thousands, like 9,000 bids a year, given the size and complexity and diversity of the company. So, you know, my team and I, a small group of four, review probably about 100 a year, and then the segment presidents and sector presidents as well. So we learn from, you know, the past, especially with the pandemic. I think we're all now much more aggressive in getting escalation clauses in the contracts for inflation. The customer realizes and acknowledges it. And on the fixed-price contracts, what I've talked about to clarify is when you get the RFP where at the same time you're bidding development, they also want you to bid low-rate production and fixed-price production. Makes no sense, in my opinion, to bid production when you haven't yet developed. I think there's a long history of people looking at the root cause corrective action as to why they have losses. That kinda pops up more and more. Locking in your sub's fixed price makes you feel good in the near term, but it really doesn't solve the problem because if they can't deliver on a timely basis, it affects you as the prime as well. So, you know, we're pushing back. I think generally the DOD gets it. They understand. I think the whole industry just wants a fair contracting vehicle based on the risks. So we balance the risk-reward potential. I'm not sure that's one of the headwinds, as you might suggest, on the revenue growth, but we're gonna bid profitable growth. We say internally profitable growth is one word, and that's the way we're managing the business. I don't know, Ken, if there's anything you wanna add. Yeah. No. I would agree with that. I think, you know, the only thing I might add to that would be, you know, aligning the incentives for the team. I know Chris has been working hard with making sure that we've got the right short-term and long-term incentives. And then I think consistently messaging to the company, whether that's, you know, on leadership calls about what the strategy is, what the importance is, what we're focused on in terms of bidding and winning new business. And then, you know, as we meet individually with the teams, having those individual discussions about where those businesses are going and how we're trying to get there, you know, with a consistent focus on profitable growth. Chris and I have been traveling around the company, having a chance to visit some of the sites, meeting with not only the leaders but some of the folks kinda at that next level down, depending on the business, whether that's a product line or a program leader, and having those honest discussions about where we wanna go, what our expectations are, how we get there. And, you know, it's not that there's, you know, a line in the sand to say, "This is what we'll do, and this is what we don't." We need to strategically think about each opportunity, figure out, again, as Chris said, can we do this? Do we have the right capabilities? Do we have the right experience? Do we have the right team, whether that's our team or, you know, suppliers that we work with? Should we do it? Does it have the right risk return for us? And then how do we go execute, and how does it align with the incentives that we're setting for the team and the messaging that we're talking to our shareholders about, about our ability to drive that, you know, profitable growth, the margin expansion as we, you know, grow with the market? So I think it's just kinda that constant messaging so the team understands. And when the folks come in, you know, with opportunities, it is, you know, in my view, you know, nine weeks into the company, a very open and honest discussion. And I think that's what, you know, having kinda the smaller team review enables us to do, kinda have that strategic discussion, make some decisions, and then, you know, proceed forward. So for me, it's been very refreshing as I've joined L3Harris to see how we can be, you know, nimble and reactive as we make some of these decisions. I guess I didn't answer the program review question. It's similar, but a lot of this is just the culture. You gotta have a culture of transparency, and you have to encourage people to bring forward problems. We have our early warning metrics, earned value, right? We have program managers that we train. But ultimately, you know, the messaging we say internally, you know, if you have a challenge, you have an issue, raise your hand as a PM because I believe there's not an issue we can't solve if we find out about it early enough in the program, and then we have our oversight and reviews. So I think it may not fully be appreciated, but the culture of transparency and openness, as Ken mentioned, I think makes a big difference. You know, I've been in this industry a long time, and there's war stories of 20 or 30 years ago. People bring bad news, and you fire them. You're probably not gonna get an honest assessment of where these programs are. So we're a kinder, friendlier approach to solving problems, and I think it's making a difference. I, you know, IMS, I think, is where most of this is at least, you know, hourly to us, manifests itself, some of the issues there around the ISR business. I think you talked about a profile there that, you know, most of this fixed-price development work should be behind or, you know, kind of reined in through the first half of this year. Is that still the trajectory that that business is on? You still feel comfortable with that, that the kinda biggest issues are behind from a fixed-price, you know, development standpoint? Yeah. I do. In fact, Ken and I were there the last couple days doing classified/unclassified program reviews. That was a longer-cycle business. So, you know, the hit on the inflation and the attrition, you know, is lagging a little more than the quick-term business. So, yeah, I think we feel pretty confident that we have those bound. And then as we're bidding and winning new business, especially in the international, you know, we're looking at double-digit+ margins, which is gonna help us with the growth in ISR. So anything you wanna add? Yeah. I would just say, you know, we were just in Greenville and Waco this week visiting with that ISR business. As I have a chance to get, you know, more familiar with, you know, the specific sectors that we operate in, it really is a great business down there. We have seen a little bit of margin compression as we've seen the mix move from, you know, more international to, you know, more domestic. Then ISR a bit got hit, not really as much during the pandemic but a little bit of post-pandemic as we saw some competitors in the area, maybe not business competitors but labor market competitors as the airlines were expanding post-pandemic. We saw some labor, you know, moving, and we had to train up some new folks, and that, you know, took a little bit of time. These are longer-term programs, but we've got now, I think, a great employee base that's been trained up. The work is, you know, complex and, you know, requires a fair amount of precision, as I've learned more and more over the last couple days. But I do think we've got a good mix now of ability to perform, as well as we're starting to see some international opportunities in front of us that should help us expand the margin. LHX NeXt will obviously have an impact, and I think that impact will be enduring in that business, but it takes a little more time to see that cut in in some of these longer-term programs. So I do think there's opportunity at ISR. First of all, I think, you know, getting, you know, some of the program challenges that we've seen, as you mentioned, kinda behind us, and then an ability to expand margins, you know, both on kinda the business mix as well as the benefits of LHX NeXt as we look forward in that business. Yeah. I'll just say lots of new leaders down there over the last 12 months. So you both touched on LHX NeXt, you know, $400 million in kinda net cost savings you're targeting. You've given us a high-level view of kinda what you're doing, but how does that break out? You know, and you've also talked about each business having the ability to expand margins by over 100 basis points, and we've all tried to dig in a little bit. You know, I guess by business, how would you rank the LHX NeXt opportunity? I think I answered this question in January, so now I gotta remember what I said, but. You kind of answered it. That's why I'm asking it again. All right. I didn't do a very good job. All right. I'll try to do a little better job. Now, so this is starting at the it's really in addition to our E3 Program, which is the continuous improvement. And that's why we've set a corporate target. All the compensation for all of our executives in 2024, assuming the compensation committee approves it tomorrow, will be focused to achieve this $400 million run rate because a lot of what we're talking about is doing what is best for the entire enterprise. So trying to divvy it up at this point is not always that obvious. So we're looking supply chain is a big driver, both direct and indirect cost, getting long-term agreements, changing the way we approach our supply chain from being way too tactical and transactional to, in certain cases, being more strategic, sharing the technology roadmap and negotiating LTAs, long-term agreements. And we've had some early success in that regard. We're taking a fresh look at our whole IT organization and how to skip a generation and accelerate some of the technologies in that regard. And then we're looking at each and every function, you know, to figure out how to optimize it. And, you know, in this industry or in my business experience, people will tactically look and say, "Well, I think there's too many we'll pick on HR, too many HR people at corporate," or too many you gotta look at it in total. How many total human resource people do we have at L3Harris? What is the right, they're probably listening and getting nervous. What is the right number? Whether they all are charging corporate or dispersed really doesn't matter. We wanna get the total number right, where they fit on any given day is interesting but irrelevant to me, and that's what we're going through. So when you I think IMS has the greatest opportunity, given the fact that there's currently 100 entities, you know, 26, I think, different ERP systems. We just combined 10-one on January 1st. You know, most of that was legacy L3 businesses that had not been integrated, like we've talked about. So I think that has the greatest opportunity. I also think communication systems, you know, which has the commercial business models probably in second place, and everybody immediately jumps to, "Well, they already have 24% margins." You know. How much higher can they go? How much higher you can go. You know, nobody has a pass, and you can actually go higher. I've said it's a heck of a lot easier to add 100 basis points from 24-25 than going from eight-nine or 11-12. With the commercial business model, we keep a lot more of the savings rather than giving it back to the customer. Nobody gets a free pass. We've looked at that. We were focused on the cost improvement quality and reducing that, improving the Rolled Throughput Yield. We made some investments for the SIOP systems. Instead of having manual spreadsheets, it's now automated for demand management, all these things that, you know, make them a better company. You know, I think that's been the mindset. You know, our margin target is 15%. We have 16 sectors. There's not one of them that's making 15. You're either making more than 15 or less than 15, and everybody has to go up, and that's the plan we've put in place. And then probably put Aerojet third and SAS fourth just because SAS is already. Cost-plus. Cost-p lus. And, you know, we've been able to consolidate the disclosure statements and such. So, yeah, we'll be reporting, and you'll start to see some of the benefits, but I'm excited about it. It's one of Ken's main responsibilities. We meet monthly reviewing the progress, and I think it's gonna be a game changer for us. And it's not only the cost takeout. It's just the agility and the speed, eliminating layers and spans and building a world-class organization that moves quicker and faster and lower cost than our competitors. One issue about, you know, working capital improvement was a big focus here. Then we got to the pandemic. You had to take on, you know, additional inventory, all that. Now that you've been in the seat for a little bit, how do you, you know, you came from an organization that I think did a very good job from a working capital perspective. How do you kind of, you know, now that you're into it a little bit more, how do you view the working capital opportunity and what potentially you could do here and how that could contribute to the cash flow growth that you're projecting? Yeah. Look, I think at the end of the day, what we're focused on is, you know, really disciplined balance sheet management at the end of the day. And, you know, Chris and I are probably both, you know, kind of at the end of the day, balance sheet guys that really, you know, everything kinda flows through there. And, you know, different ways to kinda, you know, maximize the benefit, you know, whether in, you know, a more traditional product-based business might be more, you know, kinda inventory management. Although I think we learned through the pandemic, you know, you don't wanna push it too hard, you know, in case there are, you know, supply chain, you know, issues. How do you make sure that you can still deliver product and grow the business? You know, radios aren't something that you can deliver if you're missing a part. So, you know, thinking strategically about making sure that we've got the right kinda risk relationship of, you know, a good and disciplined, you know, supply chain inventory management strategy along with, in some of the other businesses, how do we negotiate with the customers for the right, you know, cash flow profile in our businesses, performance-based payments? If we have to take, you know, progress payments, what impact does that have? You know, timing of where we, you know, can try to get opportunities to monetize some of our, you know, receivables and things like that. So very much a focus. I do see opportunity, you know, in particular as we integrate Aerojet. I think there's some opportunity there. But as I slice and dice across the segments within the company, there's slightly different strategies as to how we get there. But certainly, disciplined balance sheet management will be a big part of how we generate our free cash flow growth. But at the end of the day, it's a mix. I think, you know, more than anything, it'll come from our growing margin dollars. But as we turn those growing margin dollars into disciplined, you know, not only working capital but also, I think we talked about CapEx, you know, staying around, you know, 2% of revenue, I think that yields, you know, this growing free cash flow that we've talked about. And I have a lot of confidence that, you know, between, you know, those couple dynamics, again, growing the dollars, managing the working capital, and managing the CapEx, that we've got a really solid path towards that nice free cash flow trajectory. Yeah. In terms of the balance sheet and the leverage and delevering, what is, you know, you still have the CAS divestiture to close. What is the opportunity? You've talked about the potential for additional divestitures. What is the potential there? Yeah. I've thrown out the number of about $2 billion of revenue that. Incremental to CAS. Incremental to CAS that would be on the list of potential divestitures that don't meet our focus, which is really to be a national security company focused on technology. So, you know, divestitures have been tough the last few years with the rising interest rates and the regulatory environment, to be candid. So, you know, the businesses are profitable and, you know, performing, and we just have to figure out the right time as to when we wanna monetize them. We get lots of inbound calls, usually when I say what I just said, but we'll run the right process at the right time. And, you know, as we've said, we wanna get to 3.0 leverage and then, of course, start returning cash to shareholders through modest dividend increases and mainly share repurchases. And that's tracking. If we can close CAS here in the second half of 2024, pay the debt down, keep the free cash flow coming, we could be in a position late 2024, early 2025 to accelerate the share repos. Okay. Any key upcoming big competitions from your standpoint that we should watch out for? You're keenly focused on. Yeah. I focus on all of them, but we're up to a good start this year, actually, already here in February. The SDA tracking tranche two for 18 satellites. So, you know, we're proud of the team, and they're the only company to win tranche zero, tranche one, tranche two, four, eight, 18 satellites. So that was a big win early in the year. In fact, we just launched on Valentine's Day five satellites. Four of them were the tranche zero satellites. So that strategy is working well. We talk about ISR and business jets. We have an undisclosed European country where we secured two aircraft in January to missionize their business jets. So that continues the trend of business jet ISR aircraft. So that's a pretty good opportunity. We have a bunch in, you know, the radios, HMS, a lot of international. We still have Ukraine. You know, didn't talk about the supplemental, but once the appropriation bills are passed, I've been told they'll focus on the supplemental. But, you know, a Ukraine supplemental would be helpful to our tactical communication radio business. We've already delivered 15,000 radios. So, you know, another $100 million or so probably tied up in the supplemental that we could use there. And Aerojet, you know, we have a lot of proposals outstanding, some PAC-3 solid rocket motors, GMLRS, and such. So those are progressing through the system. And then there's always the classified stuff that we can't talk about, but we're doing quite well in that regard. And probably not a day goes by where we're not hanging out in a SCIF for a meeting or a Zoom or something. So a lot of good stuff going in that world as well. Any update you wanna give on Aerojet, how things are progressing there in terms of you know, you talked about attrition. Attrition has improved since you've taken over. But how things are progressing in terms of getting production ramping up? Yeah. The The issue, you know, the issue we look at is really one of capacity. We have more than enough work to do, and there's just certain choke points relative to, you know, the equipment in the facilities, which is what we're investing in, mainly using the Defense Production Act money that you've heard us talk about in the past. You know, at the date of closure, there was a certain number of they call it backlog, but that's confusing. I'll just call it delinquencies. These are rocket motors that we have not delivered to our contractual obligation, basically late. So we've been able to in the five months that we own the business, we brought that number down by 10%, and we have a plan to reduce that throughout 2024 and 2025. Some of that's a result of capacity. So we're doing quite well. This will probably have, of the four segments, the second highest margins of the four. You know, we're glad we made the acquisition. We have a good team, a lot of talent that are familiar with rocket motors and missiles, both internal and external, that we've put in there. We've already hit our synergy goals of $50 million. So, you know, we know how to do that. We did it quickly, but the focus is clearly on the production. And we've made good progress, but, you know, a heck of a lot more to do, but got the right team and the right strategy, and we're working on it. And the customer relations are all positive. Can we start the audience response system? It's coming, I think. This is the fun part of the conference. Exactly. I I know you look forward to this. We can get it to work. It's not coming up here. We can go old school and raise hands. What was your first question? Do you own the stock, I believe? That's fair enough. I do. Oh. The working? Maybe restart it? Are you thinking about it? Oh, there we go. There we go. Okay. Stop. Oh. There's the clock. Great opportunity. Thank you for joining. Yeah. Next question, please. The balance. Next question, please. No, you kinda talked about that, some things growing faster or some things not, so kind of in line. Next question. I kinda have a sense where this one's gonna go. No, no, no. We'll see. The first two will be zero, but we'll see. There you go. I think that's it. Is that it? All right. Chris, Ken, thanks again for coming this year. All right. Thank you. Appreciate it. All right. Thank you all for joining today. I'll see you. I'll see you. I'm you. I'm gonna come up to your meeting. Okay. Good. Good to see you.