Good morning, everybody, in the room and on the webcast. I'm very happy to be opening our UBS Global Industrials and Transportation Conference here in beautiful West Palm Beach. My name is Amit Mehrotra. I'm the Electrical Equipment and Multi-Industry Analyst here at UBS. I'm joined on the stage by Steve Fisher, Gavin Parsons, and obviously our introductory keynote, Lockheed Martin. As Steve will kind of note momentarily, we are really proud of the size and scale of the conference, which is really made possible by our valued clients and as well as corporates. We sincerely hope you make this kind of a staple in your post-Thanksgiving, early December, I think, next year, December 1st through 4th, right here at the same location. So please, please save the date. We'll be kicking off the conference today with Lockheed Martin, led by Gavin Parsons. One programming note before I hand it over to Steve. We will be having our second keynote today at 4:15 P.M. right here, and that will be the director of MIT's Artificial Intelligence Lab, which will be followed by a reception on the lawn. That'll be obviously interesting in terms of AI's impact to industrial trends and energy infrastructure demand. I'm gonna hand it over to Steve to give you some quick stats on the scale and breadth of this conference, and then we'll hand it over to Gavin to lead our first keynote with Lockheed Martin. Thanks again for coming. Good morning. Thanks, Amit. Appreciate that. So I'm Steve Fisher, UBS Machinery, Engineering Construction and Building Materials Analyst. So just for some historical context, I've been part of this UBS industrial research team for over 20 years, and I'm never been more excited about a lot of things as I am today. Certainly excited for this conference. I think it's one of the biggest and best and most robust that we've ever had, certainly the only one that we've had golf at, and even a Lawrence Taylor sighting for those that were there yesterday. But other things that I'm really excited about is basically the team that we have here now. We have the long-running talent that we've had in the group for a long time, including Tom Wadewitz, Josh Spector, Damian Karas, and Allison Gordon, both on the trading and now sector sales side. I'm really excited about the new team members we have, with Amit, with Gavin Parsons, John Lovallo, Josh Chan, and Joe Spak. This is a lot of talent, and really excited for that. Also wanna point out, really excited about the Evidence Lab offerings that we have, giving you great proprietary data analytics, and then more recently, the UBS ARC, which is our network of privately held companies, providing unique insights run by Darren Pope. We really are appreciative of having everybody here, excited to work with you all. With that, I'm gonna turn it over to Gavin Parsons. Thanks, Steve. All right. Are we on for the webcast? Thank you. Hey, thanks so much for joining. Gavin, thank you for having Lockheed Martin here. Happy to be here. Perfect. Do you have any prepared remarks or? I do. I've got our Safe Harbor statement, so give me a second to make it. Statements made today that are not historical facts 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 our 2023 Form 10-K, for a description of some of the factors that may cause actual results to differ materially from those in the forward-looking statements. Okay. With that out of the way, all yours. Awesome. Well, I think maybe I'll start with a high-level question since we're the keynote here in terms of national security just becoming much more relevant for all industries. I guess, can you talk a little bit about how you're seeing the battlefield evolve both internationally and, you know, within the U.S.? Yeah. I mean, over the past few years, there's certainly been a number of learnings. And, you know, I'll start maybe with small, cheap, autonomous or maybe not autonomous, but vehicles. And, you know, in where the battlespace allows for, those have an appeal because of the disruptive effects that they can deliver. So it's difficult to defend against a lot of things. Think of drone swarms and the like. As the battlespace becomes more contested and more difficult, you need to augment that capability with more sophisticated effects and/or capabilities. So, you know, for example, things like, when you're dealing in a battlespace where you've got significant electronic warfare, cyber, in addition to other kinetic effects that have become more sophisticated, you need other defensive measures and other offensive measures. Things like electronic countermeasures, things like other autonomous types of vehicles, more secure communications and networking that allow for greater bandwidth as well as lower latency, things like stealth. And so there's just a number of things that have to be brought to the table fairly quickly. And when you look at the DoD's priorities over the last few years anyway, you see really an investment in both areas, the small, lower-cost vehicles, things like the Replicator Initiative, which provide you know numbers. And then you see other things like CCA Collaborative Combat Aircraft, which are intended to pair with manned platforms to provide a multiplier effect. And so those are capabilities and investments that the customer's making. Of course, there are things like additional stealth capabilities, additional like sensor capabilities such as converged sensors where RF converged sensors, where you can do multiple mission capabilities with one aperture, as an example. Those are all areas that the customer is investing in. It's not only small and lower cost, but it's also higher-end exquisite type of capability that can be brought together and paired together ultimately over a contested environment. That's what we see. Our internal investments are really geared towards that exact capability. While we may not be a low-cost provider, say, on small unmanned vehicles, we can provide command-and-control type of capability to those types of vehicles. By the same token, as you know, we've also had the stealth capability. We can do converged sensors. Jim talked about in the third-quarter call our ability to introduce AI capabilities into real space. And so, you know, again, Lockheed Martin, you think about what we are. We are an exquisite systems integrator, which enables us to really work in every domain, whether it's land, air, sea, space, cyber. We're able to provide those capabilities and integrate different systems and capabilities to our customers. So we have a new administration. Mm-hmm. Sounds like those are pretty clear national security priorities, but the budget's not infinite. Mm-hmm. That's right. So what are your thoughts on kind of the spending priorities, both programmatically but also for the overall defense budget level? Yeah. You know, it's a little hard to say really at the moment. You know, we're expecting right now, we're working under for 2025, a continuing resolution, as you know, Gavin, through, I think it's December 20th, that we expect that to get extended, but a final budget probably not to be concluded until probably sometime in the first quarter. We expect as a result that the 2026 budget, at least the presidential, presidential request, will come out probably short time thereafter, which is could be the second quarter. So we're gonna be living, I think, under a little bit of an area of uncertainty, related to budgets. What we know, what's, you know, kind of what's funded under continuing resolution, we have to operate under that. But I would expect over time that there will be different priorities in this administration. It, it typically happens. New administrations will prioritize things that maybe the prior one didn't. I think the good thing about Lockheed Martin is that we're accustomed to that. We know how to operate in that environment and how to adjust quickly. So, as I mentioned, you know, there are a lot of key capabilities. I would expect some of these key capabilities to continue. But again, that it's really gotta be, we really have to see what their projections will be and what they're requesting. Do you on the fiscal 2026 budget request when I think the Fiscal Responsibility Act is no longer in place? Yeah. I mean, I think that that's something that they may or may not decide they want to comply with. We'll see. I mean, that's you know, deterrence is certainly a key capability that the administration, every administration wants to maintain, obviously. You know, where you could see, and you see these things with government efficiency, where you could see elements of addition by subtraction. So ultimately, you could see a higher budget request than what we've seen in the prior from the prior administration. But it could be as a result of some things either being curtailed or canceled and other things being prioritized. So it's there's really I think a level that we just until we get that visibility, it's really hard to speculate on what we'll see. You know, as I mentioned, again, we operate in pretty much every domain, and we're ready for changes. We're accustomed to seeing these changes, and we adjust quickly. Maybe pivoting to the F-35, the press has reported you have a handshake deal on Lots 18 and 19. Yep. What can we expect for, you know, timing of an award? Could you receive that this year? And I believe you already have a placeholder in your guide for some financial impact of the timing. Right. If you could refresh us on that. Yeah. Sure. So, yes, we, you know, we have a handshake. That handshake has to, though, get, you know, put itself into a memorialized fashion. So it's unlikely between now and the end of the year that we'll have a definitized contract. What is more likely is that we would be operating under what is referred to as an undefinitized contract action, but that will enable the funding to be applied to the program and enable for us to operate and incur cost and record revenue, in, under that contract. And that would be then fully definitized at a later date. There's still, you know, we still don't have that undefinitized contract action finalized yet, and so we're still working with our customer to do that. And the impacts will remain the same. If we're unable to do that by the end of the year, you know, you're looking at a couple of billion dollars of revenue, associated profit, and, you know, a billion dollars plus of cash flow. But again, you know, as we said in the third-quarter call, it's timing. We're doing everything that we can with our customer to get this undefinitized contract action completed here in the year. But it's possible where, even in the case where we do get it, the undefinitized contract action, that will enable us to record revenue and profit for the cost that we've incurred to date. It's possible it may become so late in the year that our billing won't convert to cash until January. So, I mean, there's still, you know, some things that we need to work through. I think we're on a very good path. I think having the handshake is a very positive sign. And we're getting close. I'm bullish that we'll get there by the end of the year. And if we don't, it's really a timing impact. Is there any single long pole in the tent to getting that done in the negotiations? No. You know, now it's in the detail of the T's and C's. Even an undefinitized contract action doesn't have every single term, fully defined, but there's still, you know, outside of price and general terms, things that need to be finalized. And so, the teams are working through that. You know, they have their, the Joint Program Office has to go through the review process. They have to get approvals, as do we internally. And sometimes those could be delayed even though there's a meeting of the minds in terms of the general critical terms. I think I also saw you got Lot 20 long lead funding. How much visibility or how many years of kind of locked-in pricing and terms do 18 and 19 and then 20 give you? The long lead for 20, again, it's exactly that. When you think about the cycle time to deliver an aircraft, you're looking at two and a half to three years. And so what this does just keeps the program moving along. We won't deliver those aircraft until sometime, I believe in 2027, and so 2028. And so this just helps us order the material, bring it in. The profitability of that is really to TBD because we really haven't really gotten into firm negotiations on Lot 20 with the customer. That'll go through its own separate process. And so you have some initial funding here to keep the program on track. We will, once we conclude 18 and 19, then we'll start at a later time to negotiate Lot 20. And you know, it could be one lot. It could be multiple lots. We'll see what that is. That's the dialogue we'll have with the customer. So there's more to come on that one. Lot 18 and 19 is the one that we'll have pretty definitized pricing here, and that should be, you know, hopefully, done here this month. That includes an inflation catch-up. Yeah. I mean, there's certainly going to be, you know, aspects of incremental costs related to inflation. What I would say about our managing of this program and collaboration and partnership with the Joint Program Office is that by and large, we've been able to keep the cost increases on that program lower than the rate of inflation. So I think that we've done what we could. We're driving productivity to the extent that we can. We're working with our suppliers to keep a lid on cost. So, you know, I think that's the way to look at how we're managing that program. Yes, it's going to be a higher cost for two reasons. One is because of inflationary effects. Also, because of the technology new modernization that's gonna be inserted has a comes with a higher cost as well. But even so, you know, we're doing a good job of managing the cost increases, as I mentioned, lower than the rate of inflation. International demand there is still pretty strong. Like I just saw Romania. Mm-hmm. You know, what other countries are in the pipeline, and is there upward pressure on the production rate at some point? Yeah. Well, we're first of all proud of Romania being the 20th international customer to the program. We're very excited to welcome them to the family. There continues to be significant international demand. I would say Europe and the Middle East are two areas where we see it. As As you know, we have to collaborate with the U.S. government. Certain countries can take the aircraft. Certain countries cannot. But the demand cycle is pretty strong for it. You know, besides the fact that it's the most advanced fifth-generation platform, it's also interoperable. So it allows our countries to work together, and it also works with the U.S. when you have a common platform and operating system. As far as the production rate, you know, we're pretty, I think, locked into 156 per year in terms of the build rate as well as the delivery rate is what we're, you know, trying to get to, and I don't see that changing anytime soon. It, the investment necessary across the entire value chain, it's pretty substantial to take it up, even into, let's say, the 160-170. It's a pretty big number. And so, you know, we had a handshake a few years ago with our Joint Program Office partners on 156 being the number, and I believe that that will be the number for the foreseeable future. What's the latest on the PBL or services contract potential? Yeah. On the PBL, and so this is just for those that don't know, it's a performance-based logistics program for the F-35 program, the sustainment of the aircraft. The customer had decided that they were gonna take a pause on that type of program, and so the manner of contracting and transacting with our U.S. customer right now and over the next few years is likely to be more transactional. It'll be similar to what we've had before where we work together to try to drive down the operating cost of the aircraft, and we, you know, transactional. Basically the way they'll purchase the parts and repairs will be on a transactional basis. We're okay with that because we've done that before. You guys have given some great detail on production rates and MFC, but I wanted to ask higher level, you know, we're obviously expending a lot of munitions. We need to restockpile, probably reconsidering where stockpiles or levels need to be. You know, how do we think about what that balance is when we do restock? It's hard to say. You know, a lot of the information in terms of stockpiles are all classified information. But what I could say based on our discussions, based on the contracts that we have, you know, MFC alone has a $40 billion backlog, and it's my belief that the demand cycle for MFC will stay pretty strong through the rest of the decade because of the replenishment in addition to increasing stockpiles, not just in the U.S., but internationally as well. Whether you're talking things like GMLRS, HIMARS, PAC-3, all those systems, Javelin, all of those systems, we see a pretty enduring demand through the rest of the decade there, and so, you know, a lot of the, we've had a lot of dialogue with international countries, not just selling them equipment in, in certain, in systems, but also developing co-production capabilities. So countries like Poland, Australia, Germany are areas and countries where we're developing relationships where we'll co-coproduce and increase our capacity at the same time in those areas. And so, you know, we've talked about MFC being a high single-digit grower for Lockheed Martin. You know, we've got a pretty good runway there, pretty good visibility there. And even if you, you know, you see conflicts come to an end, which quite frankly, we would like to see them come to an end, we still see that demand cycle being pretty strong. If I come to that low- to mid-single-digit growth framework, you've talked about supply chain being one of the determining factors of whether you can get to mid-single-digit or not. How de-risked is that within the low single-digit band? Yeah. When you think about low single-digit, you know, maybe it'd be a bit more specific there. You're talking in the range of like 3%. It's not really going from one, one-and-a-half to five. It's really going three to four, three to five type of thing. And, you know, if you look at where we are, and I don't wanna just sit there and say it's all supply chain because, you know, there've been areas just in our own facilities and operations that have been challenged as well. So I refer to it as the entire value chain, supply chain as well as Lockheed Martin's internal operations. I think what we've seen over the past year is pretty solid stability. We know that the amount of supply chain issues, I'll start with supply chain, and even I'll call it really our internal operations as well, have narrowed. So we know exactly where they are. Unfortunately, they've been stubborn because they've been the same for the last three to four years, but at least they have narrowed. Really the question is not being able to keep up with the current volume requirements. It's really stepping it up at a 5% compounded rate is really the question. We were comfortable with a low single-digit rate around this 3%. To the extent that we can continue to have a synchronized operation both internally and with our value chain and with our supply chain, then we can see it go up. You know, I've been a little bit more conservative on that because, you know, it's a pretty big step up given what we've seen over the last three to four years. What I would say, though, is if you look at 2024 as a good example, we came into the year thinking that our sales growth would be around 2.5%. We updated that in mid-year to 5% once we got the visibility that the whole value chain could produce at a higher level. So I think that's the way we'll approach it, going into the year a little bit more conservative as events occur and as time passes. If we see the whole value chain manufacturing being able to maintain a higher level of throughput, then we'll, you know, increase our expectations accordingly. It's really more of a wait-and-see, and it's a little bit more of a show-me story. But you know, the opportunity set is certainly there. I mean, given our backlog, again, at the end of the third quarter, a record backlog, and that wasn't even including the backlog associated with the Lot 18, 19 negotiation. We think about that, that's another, say, $10 billion or so that would be added to our backlog. And so, the visibility is solid. The visibility is there. And you know, we're just trying to make sure the entire value chain can keep up with that demand. So it sounds like low single-digit, pretty high confidence. The supply chain's not going backward. It's just. Right. How much growth can it support? Right. Exactly right. Yeah. Any quantification you can put around supply chain improvement, any metrics that can help us track that? What I would say is that we have seen performance improve generally to a level that before COVID hit. You know, you're talking 2018, 2019 timeframe. And when I refer to that, it's really on-time delivery type of metrics have generally recovered to those levels. And you know, now we're stepping up with higher volumes, and they've kept pace with that. Now, what I would say is those on-time delivery rates weren't fantastic to begin with. There's a lot of opportunity there. But at least we're back to that same level of performance now. Now it's a question of working with all of our partners on how we improve those rates from here. And it's you know, the most important things are on-time delivery and quality. So they could be at a 95% rate in on-time delivery, but if the quality's poor, it disrupts our production flow. And so you have to get those things together, and that's what we're working on. And as I mentioned, the issues are a little bit more narrow. So we've got our resources working, whether it's internally or with our suppliers, to really beat those down. In terms of the biggest growth drivers, you mentioned MFC being one, but. Mm-hmm. What are some of the other big contributors, you know, whether it be CH-53K, hypersonics? Sure. You know, as I mentioned, you know, MFC, we do kind of, you look at over the next few years here, you're looking at high single digits. You know, probably the next highest grower would be RMS, which is say 3%-4% over the next few years. And again, you know, look at, you break them down in their $17 billion-$18 billion segment. Sikorsky's about $6 billion of that. Over the next couple of years, Sikorsky's actually gonna projected to grow pretty nicely. CH-53 is certainly going to drive growth over the next two years, but CH-53K's gonna drive growth over the next five years. This year, we're gonna deliver about four aircraft. We're expecting that to double next year and continue to double until we get to between 20-24 aircraft a year of full rate production. So we still have got a continued ramp there. Over the next year or so, we've got, we've got volume growth on the Black Hawk Multi-Year X contract. We've also got growth on the MH-60 Romeo model there over the next two years. Those, after the next two years, will come back down a little bit. So that over a five-year period, Sikorsky will grow kind of real low single digit, think maybe 1-2%. And again, that's gonna be on the back of CH-53K. But what you have in RMS, which is, I don't think is fully appreciated, they have other businesses, lines of business in there besides the Sikorsky. They've got what we refer to as our Integrated Warfare Sensors and Systems business. Think about Aegis systems. Think about radar systems, both naval and ground-based radar systems. They've gone through a pretty significant upgrade and modernization of our, of their radar systems. And we are seeing recapitalization cycles related to radars. As I mentioned, Aegis continuously updating that system for the Navy. And then we've got our other business, which is a C6ISR business, which is where we have our JADC2, our Joint All-Domain Command and Control type of systems there. We've got a contract with the Australian government, referred to as AIR6500, which will provide really this whole command and control situational awareness system for the entire country. We have a similar contract for defense of Guam. So again, as I talked about before in your first question, you know, the connected space, the ability to communicate and having assets, systems and platforms be able to connect more easily, exchange information, stronger data links is exactly what these systems provide. We're in the front and center on that. You know, that'll drive growth for RMS as well. That's why I feel confident a little bit more that 3%-4% besides, you know, Sikorsky, over the longer term. Sikorsky's starting to come back down a little bit. When you look at the rest of the portfolio, Aeronautics, you know, Aeronautics will, even though the F-35 production is kind of flattened out, we still expect there to be strong growth on the sustainment side. You know, as we mentioned, whether it's a performance-based logistics program or transactional, the demand is going to be there because there's more aircraft in service. They're as they age, they'll have to go get sustainment work. In addition, the aircraft is going through a modernization cycle at the same time. Equipment has to be replaced. And so we feel pretty comfortable. You know, back in 2021, we talked about F-35 sustainment growing at a 6% clip on a five-year CAGR. It's gonna be at least, I would say, 6% to high single digit growth on that over the next three to five years. So that'll be a growth driver for Aeronautics. F-16 over the next few years will also grow as we continue to increase our rates there. We're going from two a month to four a month by 2026. We'll get to three a month next year as we deliver out on that backlog. So that'll be the two, you know, areas of source of growth. C-130 generally pretty much flattish. And we'll see what happens in our ADP Skunk Works business. You know, what happens? There's a lot of classified activity that happens there. You can't really speak much about it. But we're projecting some growth there as well. So when you put it all together for Aeronautics, you know, you're talking low single digit growth there 'cause the F-35 production is so large. And then lastly, at Space, you know, Space, the areas that are gonna drive growth that Space will be their strategic and missile defense area. So think things like Next Generation Interceptor. Think about their hypersonics programs, Long-Range Hypersonic Weapon, their Conventional Prompt Strike weapon. And then Fleet Ballistic Missile is gonna be going through a life extension too, so a modernization of that for the Navy. And so that'll be the growth driver. That line of business will be the growth driver for Space. The traditional space business, while we're seeing growth in the small satellite constellations, things like SDA Transport Layer, Tracking Layer, those types of programs and contracts, some of the exquisite programs because of where they are in the life cycle, OPIR, NextGen Geo as an example, will come down, so as these exquisite systems come down, you've got these newer small sats going up, but they kind of cancel each other out, so in the end, space all in would probably be a low single digit grower over the next three to five years, so all in, it kind of forms the basis of, you know, we talked about low single digit starting point for 2025, but it's kind of the same formula going forward over a three-year basis. That's a great round the horn. Thanks. In space, when do some of those exquisite programs fully lap? When do they roll off so we can see the underlying growth? Yeah. There's still probably another three, four years there. And it's not just kind of the exquisite space. You've got Orion as another one that will start to cycle down while we've under contract for a number of capsules there. It'll start to cycle down as well. So we've probably still got, you know, at least five years of a little bit of a tail down on those just based on the life cycle of those programs. And then on F-35, production flat. You talked about sustainment growth. Is modernization growing as well, or is that steady? Absolutely. No, no. At 35, we'll grow in modernization, and that will. It'll come through sustainment revenues is where we'll see it. So that's why I said that, you know, 6% is probably the floor. With the modernization, it'll probably be high single digit. Okay. Appreciate the clarification. So how do we translate that all back to margins, the 10 to 20, or I guess 10 bps base case, 20 bp s opportunity framework? Right. Yeah. So the 10-20 basis points of margin expansion, let's just baseline where we are today. This year, we're expecting about 10.5% margins. You know, we on the same basis, historically, we've been 11% + in our margins. So, there's certainly runway for us to claw back and get to what I would refer to as more of a 11% run rate starting in 2027. And we've talked about that being, you know, a steady increase of 10-20 basis points per year, over that period of time. And for a number of factors. Number one, we should get a mixed benefit just from MFC as they're the highest grower in our business. They're the most profitable as well. So that we should get a mixed benefit from MFC driving us over the next few years. We'll also should get a benefit from lower losses from the MFC classified program that we're under, you know, we're delivering out now. And so that will give us a little bit of tailwind. And so you kind of do this in the context of 2025. That's 20 basis points of benefit. The one thing that I mentioned on the third quarter earnings call is that we have just general across the rest of the portfolio, our EAC adjustments or profit adjustments, we're at least at that point in time, we're projected to come down. And so that was a 10 basis points headwind. So it was kind of pointing towards 10% of expansion in 2025. We'll see. We're going through that now. It's not. I think it's fairly typical where, you know, earlier with lower visibility, you're a little bit more conservative on the profit adjustments. People have asked, well, you know, shouldn't it just be a run rate of 20% of profit every year? You know, we'd like that to be the case, certainly, but you can't really look at it that way. It's really program schedule specific. It's really when you have scheduled a risk retirement to occur. So you may have a risk retirement, say, in 2024, but not another one on a particular program or a contract. That next risk retirement opportunity may not occur again until 2026. It just really depends on the schedule of that. That's what we need to go through the detail of understanding where our programs are, where we see the opportunities for risk retirements and other productivity gains that can deliver higher profit adjustments. To the extent that we can hold that flat, then your 20 basis points would drop through. The other thing I would say is that there is a little bit of variability as well. You kind of maybe have to go back to 2024. You know, as I kind of laid out kind of in the context of 2025, the 10, 10, and maybe - 10, on the classified program at MFC, you know, we're still evaluating that program. So it's still possible, even here in the fourth quarter, that we can take a forward loss on that particular program. And that would really change the whole profile, our margin profile. You think about that. If we recorded all the losses here in the fourth quarter, then the forward margins would automatically pop closer to, say, closer to 11%. So we're still going through that analysis. We have to go through that every quarter. And we'll do that again this quarter to the extent that we have a triggering event from an accounting perspective, we'd record all the forward loss there. And the other program that we have to just keep an eye on is the classified program at Aeronautics. You know, we've taken some charges this year, year- to- date on that program. And you know, we're not out of the woods from a risk perspective. And that's something we have to just keep an eye on. So the 10-20 basis points, not necessarily perfectly linear, but that's the average over the time? Yeah. I'm pretty comfortable with 10-20 per year. You know, again, people ask, why isn't that 30-40? You know, maybe. It depends. I think for us to do to we could snap back to 11% next year if we took the charge on all 600. But, so there's still more to come on that. We just need to complete our, you know, our evaluation of these contracts. The trigger on front-loading that charge is based on the customer award profile or your accounting of the probability? Yes. It's more of an analysis of probability, you know. It's certainly a judgment call. But there are things like, you know, our conversations with the customer, their commitment to the program, any visibility we may have to funding, our performance under the program. Are we tracking to performance requirements and schedule requirements and meeting all those milestones? So there are a number of things that go into the mix. We bring those all together and have to make a determination on whether or not there is a triggering event as a result. Is the 10-20 basis points still the right framework even if you get that step function next year on MFC? When you say the step function, if you're able to front-load the charge? Well, if we front, if we front-load, yeah, I think we could still do 10 to 20 basis points. So 10 basis points from the lower losses on that program would go away. So what we would still need is, you know, right now we've got the reduction in profit adjustments canceling out the mixed benefit from MFC. But to the extent that we have clarity on, at least a flat profit adjustment profile, then you could see margins on an apples to apples to apples basis still step up. So say, for example, if you recorded all the losses this year and you say you adjusted those out. You said my run rate, my run rate margins this year. If I adjusted out the losses, the big losses from that program would be closer to like, say, 10.9% or so. Can I get to 11% next year? I think the answer to that is yes. Just to kind of keep it a little simple. Makes sense. One thing in terms of, you know, the fixed price versus cost plus discussion that's been ongoing for some time, which has, I guess, come to the fore again with the discussion of maybe government efficiency. You know, are there still contracts lapping that were fixed price that you've absorbed a lot of inflation impact over the last few years? You guys have spoken at length about not wanting to take on high-risk fixed price contracts. But just if you could kind of wrap that up into what the margin impact has been and how you're bidding those going forward. Yeah. Yeah. We, you know, the number of contracts remaining, I think that may expose us to risk related to inflation is fairly limited now. We've adjusted for those. What you may have seen is, you know, unlike maybe other companies where they were taking, you know, negative EAC adjustments, in our case, because of the way we're just conservative accounting, what it did is prevent us from taking actual positive adjustments. So we had to hold profit booking rates rather than stepping them up because of the impact of inflation. We still have some lingering impacts. We're still a couple contracts sitting at Missiles and Fire Control. But if you look at their performance this year, they've more than offset that in their portfolio. They've done quite well. We've got some fixed price. You know, the classified program at Aeronautics is a fixed price contract. That again, it's more of our ability to contain the risk versus necessarily inflation in terms of just learnings, technology learnings. We've got a couple of fixed price contracts sitting in space, which are fairly large. But those again are in classified areas, and we're performing quite well under those contracts. So I'd say the exposure is limited under fixed price contracting really to these two classified programs that we talk about often, the MFC classified program and the Aeronautics classified program. Okay, maybe come into cash flow, and then I'll open it up if anybody has questions in the room. Translating all that down to the cash flow guide, a couple moving pieces, you know, with the working cap and the timing of the F-35 payment. Yep. You know, what are kind of the bridge items from this year to next year? They're kind of the major moving pieces. Sure. When you look at, say, this year, and you know, our guide was $6.2 billion, is what we timed it up to, in the third quarter. And there's a couple. Let me just talk about that. Like, what's in that? And so we had, related to, you know, our agreement on the F-35 to deliver aircraft, about $600 million of headwind related to that program, which will be, you know, we'll get that. It's timing. We'll get that cash back over the next few years. We offset that entirely by really some international advances, which enabled us to really continue to deliver the guidance that we had coming into the year. Into the year, we had our guidance was $6 billion-$6.3 billion in our $6.2 billion. So we pretty much offset that headwind. As you go into next year, right now we've got a required pension contribution of about $1 billion we've talked about. You do get a tailwind on F-35 of about $1 billion. You know, it's a pretty big number, given that we're delivering aircraft, we'll deliver more than the 156 rate next year, in addition to achieving the milestones of the agreement that we had laid out. And so some of those withholds will start coming to us as well next year. That's partially offset by, you know, these advances that occurred in 2024 of $600 million. So net-net, the F-35, I'll call it net impact, there's about $400 million of a benefit. You've got $1 billion of a headwind related to pension. And that's what we've been working on, in terms of trying to drive out through improved working capital. You know, a day of working capital Lockheed Martin's about $200 million. So you need a couple days to really kind of work that out. It's possible. And that's what we continue to drive, organically. As I mentioned before, to the extent that, you know, we're unable to get there all the way through working capital, there's other opportunities, use of the balance sheet to reduce that headwind. You know, as I mentioned, or the way to think about it as well is that when you make a pension contribution and a payment, that actually hits free cash flow. So reported free cash flow could come down. But when you augment it with other opportunity potentially, if we were to augment it with debt, then your capacity, your cash, available cash to maintain deployment to investors remains the same. So we've talked about in the past, you know, dividend of around $3.1 billion and a placeholder of share repurchase around $3 billion. Our ability to, with pension, will enable that. We'll continue to enable that cash deployment program. What are the considerations of, you know, using the balance sheet or other methods to fund pension and whether or not you do a one-year or a multi-year? Yeah. You know, there's a number of things there. You know, it could be we could have a range of outcomes there. It could be we just do it year by year. It could be you do multiple years. You know, the good thing about just looking at it maybe year by year is the fact that you continue to drive the internal operations to offset it organically. So by driving just more working capital improvements is really our goal rather than just kind of wiping out three years. So, you know, it's possible we may be looking at this on a year-to-year basis versus a multi-year. But the approach will be the same, whether it's individual year versus a multi-year takeout. You know, again, I think when you look at our working capital performance, it's among the best in the industry, but it's not at a level that we've been able to achieve in the past. We've been better, and the opportunity set is there. I've talked with the management team often that, you know, our goal is just to get back to where we were before. It's not like a goal that we've never achieved before. To the extent that we're able to do that within the time period that we need to, we can make a lot of headway to mitigate these pension headwinds. Great. Any questions in the room for Jay? Not clear, huh? All right. Well, maybe one or two final ones for. Sure. While I have you, that working cap, how much of that is ex F-35? Say that again? The working capital capture opportunity. Oh. How much of that is ex F-35? A lot of it is in, well, yeah, a lot of the opportunity. There's yeah, all of the opportunity we're looking at is ex this F-35 kind of tailwind that we're going to see. But the F-35 program itself still has a lot of opportunity, both in production and sustainment. That's certainly an area of focus for us, to drive out, you know, just more efficient productivity in the program and also better contracting there. That's certainly an area of focus for us. We'll get a tailwind on F-35, not by just because of the timing of our achievement of milestones and because we'll deliver a higher aircraft. There's still certainly opportunity on that program. Same with the F-16. Sikorsky has opportunity as well. You think about it, the platform businesses is where a lot of our opportunity exists. When you look at our missiles and fire control and our space businesses, and those two segments have very strong working capital performance. And so, you know, where do we focus on? Really the platform businesses at RMS as well as at Aeronautics. Great. And maybe last one, you guys are committed to buybacks. You've got a dividend. What about thoughts on M&A? You know, M&A, we're open-minded on M&A. We take a look at opportunities as they present themselves. There's been a pretty robust pipeline of review. You know, our threshold for M&A is fairly high, but we look at opportunities and we look at them from a strategic lens. You think about what we are, as I mentioned before. It's an exquisite systems integrator. In those areas that makes us, you know, somewhat exposed, if you will, to a strong supply chain. There are areas where we may see strategic vulnerabilities where we think we need to thicken our capability, and we would approach that. Or there may be areas where the performance of supply chain is not as strong as we would like it to be, and we decide we want to take that in-house. It varies. You know, that's kind of looking at it vertically. I wouldn't expect us to go wide afar of any type of capability. We've got a core capability in our defense portfolio. We do a lot of different things within that portfolio. It's a matter of just making it stronger. We're open-minded. You know, we kind of take it as it comes. You know, the threshold for returns has to be there. The cost synergies, the revenue synergies have to be there. The strategic fit has to be there. But we'll, you know, take them as it comes. Makes sense. Perfect. I think we can leave it there. Thank you very much for the time. Thank you very much, Gavin. Appreciate you having me here. Happy to be here. Thanks, Jay. All right.