Hi, everyone. Welcome to our last session of our Morgan Stanley Eleventh Annual Laguna Industrials Conference. I'm Kristine Liwag, your Head of Aerospace and Defense Research here at Morgan Stanley, and I'm very excited to have Lockheed Martin here with us. Before we kick off with the introduction, standard disclosures. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, I'm very excited to welcome Jim Taiclet, CEO of Lockheed Martin, and Jay Malave, CFO of Lockheed Martin. Welcome, guys. Thank you, Kristine. Great to be here. Can I make just a quick housekeeping statement myself? Yes. Okay, sure. Statements made today 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 materially from those projected in the forward-looking statements. Please see Lockheed Martin's SEC filings, including its 2022 Form 10-K and subsequent 10-Qs and 8-Ks for a description of some of the factors that may cause actual results to differ materially from those in the forward-looking statements. Okay. Great. So we'll dive right into Q&A, and then, you know, we'll have a little time at the end, so if you have any questions, save it and we'll get to you. So maybe starting off, Jim and Jay, on the budget environment. You know, we saw the debt ceiling negotiations be resolved this summer, but we do have fiscal year 2024 budget capped at 3%, the 25 budget capped at 1%, and we're heading into an election cycle. You know, you've both discussed about a return to growth for Lockheed in terms of revenue in 2024. Can you give us an idea what this budgetary framework means for your long-term growth aspirations? Well, I'd say, Kristine, it comports with our growth plan. We can make our growth plan in those kind of budget environments, and what our goal is gonna be is to really capture more of a share of the wallet as we go forward, whether the wallet shrinks at a greater rate with supplementals or other budget opportunities, so be it, but we're gonna try to outperform in the budget environment we face. Yeah, and I'll just add, Kristine, that, if, you know, you take a look at the last, say, two years, we've seen authorizations or appropriations exceed outlays. And so we've got a cycle here with some pent-up demand. And so, and you can see that represented, particularly in our backlog. We had a record backlog at the end of the second quarter, so it'll take some time over a multiple amount of years to really work through that backlog, which is really going to underpin our growth. So we're pretty excited about that. You know, we've heard a lot of news, and particularly MFC programs, ammunitions, replenishment, things like that. And, again, these are in backlogs, and, it's just a matter of cycling through and converting that backlog. Great. And, you know, for long-term growth, you know, it's clear with geopolitical risks that we're in a different era, and we're seeing the demand signals from the government. But at the same time, in the short term, we're seeing some pressure, right? A continuing resolution has been and continued to be the norm in the past 15 years, on average, about 100 days. How are you thinking about the risk of continuing resolution this year? And on top of that, there's an added risk where if Congress isn't able to pass all the spending bills by calendar year end, there's an automatic 1% cut to federal spend. How do you manage that risk, and what's embedded in your outlook? So if you—what's embedded in our outlook, and again, if you took 2024, we've talked about a return to growth, and frankly, a return to growth a little bit earlier here in 2023, versus our expectations previously. We've talked about 2024, accelerating to a low single-digit growth. Now, the demand signal in our backlog would indicate that it wants to grow higher than that next year, but as you know, it's taken us a while, the industry as a whole, the entire enterprise, to really catch up from a conversion standpoint. As far as the continuing resolution, certainly not helpful. You know, you talk about new starts not being able to go on schedule, as well as program levels staying at the same spend levels as the prior year. But in our case, what we have to do, particularly for those programs that we know are gonna be under contract or we're very highly confident, we continue to let them ramp up because it's just, it's too disruptive to whipsaw the entire enterprise of a particular program. And so, we believe that over time, you know, these will, they will get resolved as they typically do, the timing of which is, you know, it's difficult to predict. But we do believe that in, over the period of time next year, at a minimum, they'll get resolved, if not by the end of this year. We're hopeful that cooler heads will prevail and that we will see the funding being restored and at the budget levels that have been approved. Thanks, Jay. The F-35, pivoting to that, last week, you guys published an 8-K, lowering deliveries, expected F-35 deliveries for the year to 97 aircraft versus your previous outlook of 100-120. Can you give us more color about what's going on with the TR-3 refresh? What's taking so long? How does that get resolved? So the history of the Tech Refresh 3 has been late hardware deliveries. This is a hardware replacement for the core processor, which is the brain of the airplane, the data storage device, and the whole panoramic cockpit. So this is a major hardware upgrade. With that will come a major software upgrade, but the fact that much of the hardware was late and some subcomponents to that hardware was also late in front of it, that compressed the software integration and test program dramatically. Both government and industry wanted to try to keep the original schedule as much as we could and we're just not able to do that only because the compression is too aggressive. There's thousands of test points and literally a couple hundred test flights that have to happen. There's only so much resource there, and then every time we do a test flight, there might be some adjustments, either in a component from a supplier's software or the aircraft software. We have to code those in and then retest that point in a future flight. So this is all manageable, doable, knowable. Basically, the, kind of, the F-35 enterprise together really tried to keep an original schedule with a very, very compressed integration for the software, which is just almost extremely difficult to do, let me say, in real life. So we're just living with that now, and I've got high confidence that knowing all the tests that we've done so far, narrowing that funnel down of points that we don't really understand yet, we should be able to hit the target that we've made in our statement last week. Great. That's helpful context, Jim. Thank you. And when you think about deliveries, once you get the TR-3, you know, figured out, how do we think about deliveries in 2024? Do you anticipate a catch-up in delivery? And when do you get to your 156? I mean, you know, 97 to 156 is a pretty steep ramp. Will there be a catch-up where next year could be higher than 156 before you normalize to 156? How do we think about that bridge? Well, let's, let's distinguish between production and deliveries first. You know, we're, we're operating this year, even though we'll deliver 97 aircraft, we're operating at a build rate around 150-156 already, and that will continue. So the, so the input side of the equation will continue at this rate. And as you may recall, we had set a target of 2025 to deliver 156, and so we'll, we'll continue on that path. The deliveries, you know, with our new schedule for TR-3 incorporation, we've talked about between April and June, start deliveries. What that would require, at the highest level, if you say 147-153 is what we were originally anticipating for 2024, then you tack on 50 aircraft that come out of 2023, that'll put you in a range of about 200 aircraft. The ability to fully deliver those aircraft within anywhere between a 6-month or 8-month period of time is a challenge, and so our ability to actually meet that would be under pressure. We're going. Our aeronautics team is really going through the exercise of determining what is the art of what's possible? How can we optimize our test capacity constraints? Because that's where it is. It's really flight test related. Once you, once you're ready to, to start delivering and to be able to deliver, those level of volumes within a shorter period of time will be under challenge. So it's, it's possible, if not likely, that we'll have some deliveries carry over to 2025, and it's really to be determined. I can't really give you a range right now. We're letting the team work through that analysis. They'll come back to us in a few months. We'll be able to, to let you know once we know. Thanks for the color. And following up on the F-35 program, you know, sustainment has always been the added juice. You know, should get the performance-based logistics contract. So, looking at that program, when do we expect to see an announcement on a PBL? And also, should you get, you know, the contract win, what does that margin profile mean for the program? Look, a couple of things. We've already submitted a proposal to the joint program office for sustainment. It you know, originally, we were expecting that we can get under contract by end of the year. It probably will extend out into beginning of next year, is probably most likely scenario. And so we're very excited about that. We think it's just a new way of really delivering value to the, to the aircraft as well as to our, our customer. And when you think about, you know, margin, the way I would describe it, it's really the PBL is a win-win type of proposition. And for the customer, what it does is we're able to provide our, our modeling, the experience that we've had for time on wing, for all of the different LRUs and other subsystems. Being able to provide that, our advanced analytics and predictive models, and do that better than anyone in the enterprise can do on a holistic, integrated way. What that will do is provide the best readiness levels for the customer, we believe, as well as providing opportunity for us to improve our profitability. And so I truly view that as a win-win proposition. We're currently in dialogue with the customer, and again, our hope would be that we can get that under contract in the first quarter of next year. But again, it's going to be an ongoing dialogue. We've had a lot of success in our industry and even our company in these PBLs, power by the hour, however you want to characterize it. The other thing that it, having that data flow helps with, and the analytics behind it, is the smartest investment profile, right? So based on how an individual part performs, well, should we be making new spare parts or standing up a repair facility to repair the, the ones we already have? What's the more economic way to accomplish that task and get better readiness and lower cost? So this is the way that airlines typically do engines and aircraft, major components as well. We want to bring it to DoD, and we have in a number of instances, especially through Sikorsky. So we have a fair amount of experience here, and we're really confident it is a win-win. Yeah. I mean, again, the objective is the same on both sides. It's really to make sure that the aircraft have the best readiness levels that are achievable. Jay, just to follow up on the margin component, like, what's the margin profile? Is it dilutive or accretive to aeronautics? Today? Today, well, today, sustainment is dilutive overall to aeronautics. I think over time, again, with improvement, it could be at par with the profitability of aeronautics. Great. And sticking with the aeronautics theme, you know, Next Generation Air Dominance program, so NGAD, you know, a lot of excitement there. It seems like the Air Force will make its selection in 2024. So a competitor of yours recently announced that they're not going to bid as prime for NGAD. What's your perspective on that, and how does Lockheed look at return on investment on a program like NGAD? So the best way to approach that question is from the perspective of what are the technologies that the various industry participants have been investing in, not for a few months or years, but for decades. So, only the government can speak about the NGAD program itself, so I would refer you to public statements by the Air Force or others that would address what the program is going to be defined as. But some of the technologies that we expect that will be involved in that, we've been investing in for decades, especially through our Skunk Works operations. So those technologies you see resonate in the F-35, many of them, and some of those technologies include advanced stealth, both from a heat signature and a radar signature perspective. We're pretty far along in that. That's going to be, I'm assuming, important for NGAD, however it takes form. Another area that we've been emphasizing and the Air Force has spoken about is autonomy and crewed-uncrewed teaming. There's been a lot of investment and, and R&D done in that arena with our company over the last couple of decades. And a third piece is sensor fusion, what we call 21st Century Security. Sensor fusion, interconnectivity among platforms and domains and services. We've been working on that as well, and we're actually manifesting those both in our air, aerospace business and also in our RMS business, where we just won a program called AIR 6500 in Australia, which is really going to be the first implementation of true JADO, Joint All Domain- I think we'll be competitive. We'll see what comes about, and we're just going to keep investing in those technologies, and we'll see what the Air Force comes out with, but we'll at least be ready to participate in the assessment if we're asked to. Great, and thank you for that color. And maybe following up on that theme, you know, if the theme is, you know, pricing discipline, right? Because, over the years and through different cycles, we've seen the DoD talk about different contract structures that may put more risk in the contractor. How do you think about pricing discipline, and do you have any walkaway points that you want to share with shareholders? There's been a few lessons I think that Jay and I have learned from during our tenures, respectively, and that is that there have been points in time where our industry thinks, or at least maybe one company thinks, it's a must-win program. That's not how we look at anything. We're running a fully integrated business on behalf of the shareholders, and there is no must-win program. And we are going to bid on opportunities to the extent that we think that we can win them, manage the risk, and maintain profitability at the targets that we set for ourselves. And so that's how we're looking at all the future bids that are coming towards us and the investments that we're making in R&D and CapEx. This is all integrated now, and I'd like to think we have an evolved attitude based on some of the lessons we've learned. Sure, and you know, the factors that we consider are those that you would expect us to consider, Kristine. We look at cash flow returns. We look at just the competitive assessment of the technical capabilities of our offering versus our assessment of others, and determining what the technical strengths and weaknesses may be, and what does that mean from a value perspective? And let the pricing really help be informed by that. And then finally, affordability. You know, what type of investments you have to make, whether it's CapEx, whatever the case may be, and how does that affect the plans that you've had over the next five years? So, I think it's pretty holistic, and I think it's pretty balanced, and I, I think that, as Jim mentioned, I think we have got a good process to maintain discipline. Okay, thanks for that. Just switching gears to Ukraine. I mean, in Ukraine, you know, we've seen a premium in many systems where you're actually the market-leading offerings, right? And we're seeing that for missiles and missile defense. And these areas are where the U.S. DoD budget's up 20%, well in excess of the top line of the whole thing of about 3%. So we're seeing that outsized growth, and I think that, you know, ties into what you mentioned earlier, Jim, on the portfolio growing in 2024. But you, you've also noted with that on Ukraine, a $7 billion opportunity in MFC. Can you guys talk about what is in that $7 billion? What's the opportunity? Any context for program, size, timing? Yeah, if you think about it, it's the things that you have seen in the news. And just to clarify, what we have is a visibility to about $10 billion of orders between now and 2028. We see that, you know, what I talked about is $6 billion, that converting to about $6 billion of revenue over that period, same period of time. So there will be growth in revenue upside beyond that period of time as well, to fully fulfill that $10 billion of opportunities. But where you see it is, we've talked about these things, whether it's Javelin, whether it's HIMARS, GMLRS, PAC-3. PAC-3 is a good example. When we talked back in 2021 about our four pillars of growth, PAC-3 was a program that was already going to be driving growth, and that was bringing that, the ramp up to 550 deliveries per year by 2025. We're now seeing that we can take that up to 650 per year by 2027 based on this incremental demand. So that's one example. GMLRS, we were essentially at capacity of about 10,000 units per year. That's now, we're now driving that to 14,000 units per year. And so there's just this, as you mentioned, whether it's, replenishment or certainly, or just capitalization to higher levels, the demand is enduring between, frankly, now to the end of the decade. Thanks, Jim. So thanks, Jay. And so on pricing and margins, right? Fixed price development programs have been quite topical in your industry. And for you guys, you have one significant program in the MFC that's been negative margin. How do you think about the structure of this risk? And it's a classified program at MFC. I know that you can't really share too much about it, but can you size it or when the headwinds go away? And then also, you know, you mentioned about lessons learned about what-- how to bid. Like, how do we think about the lessons learned here from MFC, and are there more contracts like this within the portfolio? Yeah, you know, we view these, it's kind of similar to the conversation we had a little bit about pricing before, but it would... We view them on a case-by-case basis. In certain contracts, and they have just different elements. There may be some that do have fixed-price development that you really have to make an assessment of, is the risk and the return, is there a balance in that? And there are certain contractual structures by which the development is a cost plus, so you've taken the risk off the table, generally speaking, but there are follow-on production options that, they're looking for fixed price on. And so the risk in that type of contractual kind of regime, if you will, is that you're being asked to lock in pricing of production now, based on what you think the development program is going to be. And the risk there is that you have configuration changes between now and the time you get to production, such that you may have missed the cost at what that final solution would be once you start delivering. And so those are all assessments that we have to make. You know, to the extent you have to factor in risk in your pricing, that's a consideration we absolutely make. And again, it really is a case by case. You see areas like in space, where there are fixed price developments. However, the amount of development cost is much lower than you'd see in a larger platform. So it's something, again, you have to make an assessment of that risk profile and determine whether you're going to bid, and if so, do you have it adequately priced? You know, I think in our case, no matter where we are, whether it's Aeronautics, whether it's Space, MFC or RMS, we've got a good feel of the technical requirements of our products. We have just exceptional people, and technically, I think we're without peer. And so I think we do, you know, by and large, we are able to really understand what it's going to take to deliver, to provide a deliverable to our customer, and then figure out what the risk profile is and then price it accordingly, or no bid, if that's the right answer. We've done that as well. And so I think that, again, we've our processes are strong enough to be able to make that case-by-case determination and assessment. And I think we've been doing that over the past year or so. Great. And, thinking about the pressure on some of the existing fixed price development, and also, right, we are in an unusual inflationary period. Some of these contracts were signed before we've seen these macro indicators really increase. When should we see or expect a peak maximum margin pressure pain for some of the things that you signed on before? Yeah, we'll. You know, if you look at us, for the past, really, I'd say year and a half, let's say a year, yeah, about a year and a half, we have seen inflation pressures. I think the company has done an outstanding job of being able to mitigate those through incremental cost reductions that we've seen. Mm-hmm. But that doesn't necessarily, you know, address incremental inflation that we're seeing in future years. So there's pressure that we've got to deal with in 2024 and beyond. I'd say probably the next 2 years are probably the most challenged from a inflation impact in our contracts. It's probably mostly acute in MFC, and that's really separate from the classified program headwind that we're seeing as well. And so they, unfortunately, have got a double headwind that we were trying to work through and balance throughout the entire portfolio. But the fact of the matter is that we've got some gravity that we're trying to deal with in margins, particularly next year, and then we start seeing a little bit of improvement in 2025. Thanks, Jay. And, you know, Jim, you've been driving the 21st Century Security strategy for Lockheed Martin and the future of warfare. What we've seen is with Russia's invasion of Ukraine, we've seen that the tried and true systems like Javelins creating a strategic benefit for the Ukrainians. How do you think about the compatibility of 21st century warfighter versus, you know, the ground-based war that we're seeing on the ground right now in Europe? Yeah, it's fully compatible. So I'll give you an example of what one of our European customers has asked us to do, and this was coming outbound in, and it comports completely with this concept of 21st Century Security, which is using digital technologies to advance the mission capability of our platforms every 3-6 months. And in the meantime, there'll be those new platforms that come down the road every 6-8 years, but we're improving the mission constantly. So one of the requests that we got is very relevant to the European theater right now, is that there's a customer with F-35s in the region. They have HIMARS. They want to send directly sensor data from the F-35 to the HIMARS flight fire control system and use that to help target and defend themselves. That's something we need to be able to do. But to do that, we have to connect systems from, even though they're within our own company's purview, from the Air Force to the Army, original design. Data links that might not be compatible, for example. Data rates that were never thought of for a HIMARS battery that the F-35 actually already has. So we really need to set an architecture as an industry with government, just like we did in the telecom industry, and it goes by the acronym 3GPP. It's a set of standards that you've heard about in 4G and 5G, where it's Huawei and Qualcomm and Apple and others are participating and saying: What are the standard interfaces, protocols, frequency ranges, and things like that, that we're all going to use so that I can connect. The Northrop Grumman battle management system for the Army to the Air Force's ABMS system that we do. And that whole architecture needs to be on an open systems platform that's standards-based. Once we have that, we'll be able to do more than one-off connections like I just described. So what's going on in Europe and what we're preparing for and trying to deter in Asia really demand this kind of digital technology insertion, 'cause we will not be able to spend enough money to build enough platforms without doing this, to really maintain an effective deterrent. That's our approach. As you saw in the telecom industry, those that help lead and guide the standard tend to have the best integration with their products, and that's hopefully, and I expect, will pull through our products if they are most early and most our platforms and our systems that we already have under development. We've just, again, won one of these, called AIR6500 in Australia, which again, is the first real JADO implementation among countries in our alliance. So we're gonna try to pathfind with that. Following up on this, Jim, because what you described is a really compelling capability. So when you talk to customers about this capability, how much of a priority is it? Because to some degree, if you know, budgets are more limited, do you buy hardware or, you know, how do they think about this in terms of must-have or nice to have? Are you seeing that evolve where they're actually allocating more dollars to this integration versus buying just more hardware? So we build our strategy that I've been describing on the National Defense Strategy that comes out of Department of Defense. That strategy is based on this Joint All-Domain Operations concept, where you can connect a Space Force satellite to a Navy Aegis radar to a Marine F-35. That's their strategy. What is difficult in transition for the government is, it's organized by services, and the services do the acquisition, to your point. They tend to be able to historically buy systems that they desire for their missions and their service, own and operate and connect those platforms in ways that will help with their mission. But when you've got, I called it the Z-axis with one of the service chiefs two days ago. You need the Z-axis through the Air Force system, the Navy system, the Space Force systems, so that you can really link those together in an effective way at the speed of decision-making that you're gonna need in 21st century warfare. And if you show you can do that, you're gonna have a much better capability on one hand, but you're also gonna have a much more effective deterrent to conflict on the other hand. We need to start doing and demonstrating this, and there is funding, even out of DoD, going into these programs. Some of it is classified in space or aero or other places in our company, but a lot of it's now out in the open. So there's a project called Defense of Guam, same sort of thing as the Australian program, more or less. There's another effort out in the Indo-Pacific region that's called Joint Fires Network, and that is 21st Century Security, and they're doing it and funding it, and we're participating, and I'd like to think leading industry in that. And what Joint Fires Network means, it's the commanding admiral's desire for his region, is that he can connect all these sensors and target with all the available weapons that either our services have, the allies have, and demonstrate to any potential adversary that you're gonna get the full force of all of our allies, all of our services, in very quick succession, and you won't be able to predict what we can do because we're all networked. And that's, that's the real benefit of this, is deterrent value, and it is starting to get funded in DoD. There's new leadership in Defense Innovation Unit that's catching on to some of these ideas. We're working with them, and we're working with leadership, all the service leadership in both civilian and uniform side. So we're trying to build momentum here. We've got some really great outside our industry partners in this. We've announced a number of them that want to bring their technology to this deterrence effort. You know, they're like companies like Verizon, Microsoft, NVIDIA, Qualcomm, Intel. We're working with these companies on real projects for the DOD right now and demonstrating what we can do if we bring all of industry together for this deterrence mission. Thank you for all that color. On Aerojet Rocketdyne and, you know, L3Harris, Jay, I know you've got some unique perspective there. You said that, you know, at the time, you didn't get reassurances from Aerojet that, they would be a merchant supplier propulsion. Now that the deal closed, do you have any lingering concerns about availability of rocket motors? And how do you think about, your partnership or, you know, it is a partnership because 30% of Aerojet Rocketdyne's historical sales are to Lockheed Martin, in working together, going forward? Well, look, they're obviously. You said 30% of their revenue is an important partner for us. They participate in many of our programs, including programs that we're relying on to ramp up with part of this growth rate and deliver to our customer. So far, you know, we think the partnership has continued unabated really with L3Harris's acquisition of it, and that's what we would expect moving forward. And so we haven't seen any behavior that would be contrary to the partnership that we've had with them. And we expect that to continue. Great. We have time for one question from the audience, if there is one, and if not, I have a last question. I know it's the last session of the day. We're between you and the pool. Just wait for the mic, please. When we hear about AI, we always hear about the bad side, and there's no place where we can really get bad as where AI plus defense. So how are you thinking about that ethical issue in terms of of deploying AI in your business and like, you know, having a human in the loop? Like, what's kind of the ethics discussion that's going on there with the customer? So we have a Lockheed Martin. We have an acronym for everything. Lockheed Martin Artificial Intelligence Center, LAIC, we call that. The number one responsibility of the LAIC is to set, with the DoD's guidance, this ethical standards for how our company is going to employ and deploy artificial intelligence. So every program in our company or every product team that is considering or utilizing an AI tool, software tool, or capability in their program has to go through the ethics committee to make sure that they're comporting with the DoD and Lockheed Martin's integrity and ethical standards for the use of AI. That's one arena. The second piece of it is we're working with the best in the world on this, with the Microsofts, on one hand, IBM, Red Hat on another hand, Verizon and others when it comes to 5G management of this data, those kinds of things. And we're learning and collaborating with them on how their ethical approaches apply to us. We take this really seriously, and we enforce it in our company as strongly as we can. Great. Thank you, Jim. And last question I'll ask you guys is capital deployment. So far, you've returned over 100% of free cash flow, over 100%, actually, of free cash flow to shareholders this year. How do we think about priorities for capital deployment, and how do you think about M&A? Are there any particular areas that are of interest that you're looking at your portfolio that you could bolt onto? Yeah. So if you, you know, if you look at what we've committed to already in 2023, as you mentioned, it's over 100%, $4 billion in share repurchase. When you tack that on to $3 billion of dividend, that's $7 billion in excess of our free cash flow guide for the year. We're on record as saying the same for next year as well, the dividend plus another $4 billion share repurchase. And so we've allocated a little bit more than free cash flow again next year, at least at a call it a $6 billion kind of, you know, estimate, if you will. From an M&A perspective, we're going to view that opportunistically, where we can, close any type of technology gaps, where we find that, the integration of our systems would be enhanced, by a particular capability. That's something that we'll continue to look at. And so tack on to the portfolio. You know, it's hard to talk about anything in any given size. That's not really what we've been focused on, over the past year or so, but we're certainly active in reviewing opportunities. Mm-hmm. It will be opportunistic. As you know, given our most recent experience, the due diligence from an antitrust perspective has to be heightened as we go through, and the filter has to be pretty tight there. But that's not discouraging our view of any opportunities from an M&A perspective. In the absence of that, we'll continue with our robust free cash flow. Over the longer term, you would expect that to be at a minimum, at least, equal to free cash flow beyond 2024. When it comes to technology gaps or opportunities, we don't necessarily have to own a whole company to get to that. So we've created a fully owned subsidiary inside of Lockheed Martin that's outside of the disclosure statement, the Federal Acquisition Regulation, to find dual commercial and defense use cases for technology, where we would contribute what we can develop. A commercial partner can contribute what they develop. It could be a teaming arrangement, it could be a joint venture, it could be a partnership where we will then market that joint technology into DoD and to national defense and to government, and our partner would market it into commercial space. Some of these things are digital, as you can imagine, but the other opportunities are in hardware, things we develop that, for example, we're not incredibly successful at marketing, but we have a great flow battery technology for energy storage, which I know the commercial energy sector needs on a magnitude of probably 20x what the DoD would need. The DoD does need stored electrical power for bases or forward bases, things like that, but the commercial demand for something like that will dwarf the DoD, and we want to make sure we can find partners that can actually work with us on mutual benefit in both markets. And that's something we're doing without having to do M&A, go through an antitrust review, where we can get the technology we need and also can get economic value for the technology we develop outside of our space. We're not going to become a commercial tech company, but we have a lot of IP that those companies want to, want to get access to. And by the way, that's one of the reasons where the big firms that I talked about a minute ago, they're working with us on the come, so to speak, because they know that some of the technologies that the DoD needs, and especially in digital, they're going to need when they do full up 5G autonomy, and that's autonomous cars and commercial drones and things like that. So we have a synergy there that's not been taken advantage of yet in our sector, and we're aiming to take advantage of it. Well, great. Thank you for sharing your thoughts, Jim, and thank you, Jay. Thank both of you for your time, and this concludes our presentation on Lockheed Martin, and this actually concludes our Morgan Stanley Eleventh Annual Laguna Conference. So please enjoy your day. Thanks, everybody.