Let the mic go live. There we go. Okay, good morning, everybody. Welcome back to day three, the final day of the conference here. Jason Gursky, Citi's Aerospace and Defense Analyst. I have the pleasure today of welcoming Lockheed Martin to the stage. We've got both Jim, CEO, and Jay, the CFO of the company. I really appreciate both of you, gentlemen, joining us this morning for what I hope is going to be an informative and exciting discussion. Jay, I think you've got some obligatory things to say. Yeah, I'm going to start off some real exciting statements here, Jason. But again, thank you for having Lockheed Martin here. We're excited to be here at the Citi conference. 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 2024 10-K for description of some of the factors that may cause actual results to differ materially from those in the forward-looking statements. All right, Jason. Nicely done. Ready to go. Yeah. Appreciate it. Okay, so Jim, why don't we kick it off with goings on in DC? And we've got a new president in town, transition that's going on. We're wondering if you could just spend a few minutes talking about how this transition compares to things you've seen in the past, how it's different, and maybe how it's the same, and what Lockheed is doing differently this time around than maybe you've done in the past few transitions. Sure, Jason. Every administration incoming takes a fresh look at the entire government apparatus, operations, policies. Of course, that's what they're elected to do. This is no different. It may be a little more vocal and in the open while it's being done, and that's fine. What we've done with every administration is, first of all, our company maintains really strong relationships with both major political parties all the time. So whether it's congressional leadership or others, administration, incoming, outgoing, think tanks, wherever those folks reside, we're always engaged with them. And the role of industry to me in all of this is to inform decision makers, legislative or administrative, in or out of office, inform them with the latest information about the technology we can bring to bear, partnerships that we can create outside of our industry and the economy, regulatory relief, which would be helpful, and the industrial capacity of the industry. That's our obligation. We provide information, data, perspective to all those decision makers. So when someone's coming in or out of office, hopefully they do have some baseline of that really important kind of detailed information. And if they don't, we'll provide it to them. And we've got the access to do that. I think we're a respected company. And therefore, we do and will and have had hearing within both the incoming and outgoing administration. So this is not that much different than the reality of prior changeovers. It just might be a little more out in the open. Right. Okay. It's more fun. Well, maybe it's more fun for us to see it all out in the open. I don't know. It's a little stressful, to be honest with you. But it's good to know that this is always going on, I guess, right? Well, let me add one other thing, Jason. Sure. I'll speak from our company and our cohorts and the new entrants coming in. They're investing in this space. These companies, and I just came back from the Munich Security Conference, we visualize, design, and build the most effective national defense systems in the world. The U.S. defense and aerospace industry is the clear leader in all of this. And so we will be able to have the ability, first of all, to have demand for what we do. And secondly, to pivot when we need to. We have that capability too. So coming back from Munich, every defense minister, every prime minister I talked to asked us, "How can we get what you make faster because it's the best in the world?" And that demand is going to be there. And again, administrations change policies, priorities, etc. But in the aggregate, our industry is the best in the world. Everybody kind of acknowledges that. And our products and services, not just at Lockheed Martin, but across the industry, are going to be in high demand. Right. You know, one other thing, Jason, what maybe on the surface appeared different is this whole emphasis on efficiency across the entire government, including DOD. We've seen all the headlines, but a lot of the things that are being looked at are things that we've advocated for for quite some time, whether it's streamlining the acquisition process, the administration of contracts and programs to make them more seamless, to just provide the capability to the customers as quickly as possible, and so we've been advocating for a number of years ways that can streamline the entire process from the way you define requirements all the way to the delivery and sustainment of a capability, and so it's something that we're very excited and actually are advocating for to be part of in driving just a quicker method of delivering capability to the end customer. Just to put a finer point on that, I am actually personally really optimistic about our ability to help drive and advocate for systemic change in the way the Department of Defense and government operates with industry, not just our segment of the industry, but across tech, telecom, others that could contribute to this. So we had made progress over the last four years. I think there's a chance with new folks coming with a fresh perspective that we can make significant progress in the things that we've been advocating for since I started at this company four or five years ago. I really am optimistic about that. DOGE is what, again, we've been asking for, as Jay already said. We need to take the administrative costs and burden out of our relationship with the government so that we, as industry, can be more efficient and more inclusive. We want to participate with DOGE. We have plenty of ideas on how to streamline processes. I've been advocating for, again, three or four years. If we want to get the tech industry involved in national defense in a meaningful way, we have to have a different parallel acquisition path that aligns with the tech industry's way of doing business. Now we don't have that yet. Now we might get it. That's one of many initiatives that I really think we're going to get some traction on. I'm optimistic. I think our company is optimistic about this. Yeah. And it's a very consistent message that we've been hearing all week from people at other companies in similar roles as yours. One of the things, though, as I reflect on hearing that message, though, is that in some ways, as I read the press and I hear the industrial base, I feel like there's a chance we're talking past each other because you've got industrial base saying the government has got to get more efficient. They got to change. And what I think I'm hearing from DOGE is industry has got to change. And I want to reflect back on to that period from, let's say, 2010 through 2015, when industry got out ahead of a lot of the slackening demand that was in front of them and cut costs a lot. And we saw periods, sustained periods of EAC expansion on the positive side of things. So the question is, and Boeing's cutting 10% of their heads just across the board. Right? So what is it that industry can do? So we all, I think, understand what the building needs to do. What can industry do? I'll start off with a couple of points and then turn it over to Jay. Jay has been really driving an ongoing constant efficiency effort in the company, and again, from an informational point of view, we want to let the DOGE team and the incoming administration know what we've been doing. So, for one example of this, we want to take on our own internal investment, a transition from sort of the 20th century infrastructure of at least Lockheed Martin to the 21st century infrastructure, meaning a digital transformation of everything, as you pointed out, Jay, from conceptual design to interaction with the customer, all the way through production and sustainment, and have a digital twin of everything that we're making and everything we're building that will reflect that and take time, which is the biggest cost factor of all, out of our processes, take cost out of our processes, take the steps out of our workflows that really don't add a lot of value, and use the digitization that's now available to do that. Maybe this is certainly in my career, the first time I ever asked for an eight-year, $6 billion board approval to do a digital transformation program because that's what it costs to do. That's how long it takes to do it. We are in the midst of that. Efficiencies will come from that, but internal investment is required to take upfront. You cannot be shy about this or incremental. You have to make that kind of decision. We made that decision two and a half years ago, and we're on that road now. That's just one example, Jay. Yeah. I don't think that. I'm not sure that we're necessarily talking past each other. I think there's actually a connection there, and what our point is that if we can ease the administrative burden, that will reduce costs. We can do one of two things with that. We can pass it through to the customer at a lower price, which enables them to buy more capability, or we can take those cost savings and invest in more IRAD, which builds a future capability for the customer, so I view them as connected, not necessarily mutually exclusive. The other thing I'd say is that we're already doing a lot of those things here. You hear more from the customer base over the last few years in terms of we need industry to invest more. We continue to increase our CapEx, and that includes the digital investments that Jim was referring to. We also continue to increase our IRAD, and so all of these things that, again, if we can take more costs out by easing administrative burden, we can increase that investment even more, and so when you look at it in terms of competitive types of situations where you don't really need the protection of all this regulatory framework if you're going to be submitting a competitive fixed price proposal because it becomes somewhat irrelevant, and so, but I have to have because I'm covered by cost accounting standards, I still have to have that system in place, even though it may not apply to this particular contract here. And so while this contract, you can argue, a proposal, you can argue, says that shouldn't be relevant, I still have to apply those systems to it because I can't disconnect one by one on a case-by-case basis. So, if we can just eliminate a lot of those requirements upfront, I'm going to reduce costs, and we can have that dialogue with the customer. Either we pass it through and lower costs to you, or we invest more on your behalf. And another joint change between government and industry. To me, this is not, well, what does government need to be better at? What does industry need to be better at? But what is the relationship? What is the optimal relationship between government and industry when it comes to a monopsony situation, which is national defense? There's one buyer for the product. There are many suppliers, but there's one buyer. One way to get to a better outcome there is to make fixed price really fixed price. So if you say fixed price, I came from the telecom industry about 20 years building telecom networks for three, four, and 5G. The price was fixed, and it was $1 below the inflection point of the customer doing something else. Right? It was a value-price system, and fixed price was fixed price. And so is commercial aviation, by the way. So if I have a 10-year contract to deliver on a fixed price, truly fixed price, and I'll tell you what the difference is in a minute, then any efficiency I invest in, like Jay talked about, I get to keep that for either my investors or more reinvestment in the business. Fixed price in most government contracts is a year or two, maybe three if you're really lucky. And you have to submit the cost data every year. And if the cost data goes down and the fixed price contract says, well, you get a 10% margin, it's really not fixed price. They'll take the cost that you reduced out of the basis and still give you your 10%, which is still lower in absolute values. So there are disincentives to invest in efficiency. We do it anyway because we know it's the right thing to do for long-term competitiveness. But this relationship between government, how contracts are structured, how they're reevaluated, their length. I mean, we used to do 10-year long-term contracts for telecom transmission sites. And then we could build them and go to the capital markets and finance them and bundle them. We can't do that with government contracts in the United States because they tend to be one or two years. We're actually working with a couple of financial institutions now to say, look, I don't have a 10-year contract, but look at the demand for, let's say, spare parts for F-35. The demand's going to be there. I don't have the paper to show you that I can securitize like I could in the telecom industry. We need to fix these disconnects because the way that the industry relationship to government is structured by government, because it's the only buyer, it really disables our ability to drive great performance improvement. There's ways to be incredibly more effective at this, but that relationship has to change, and there's things that some in government will not like, multi-year contracts versus the one-year appropriations that Congress appreciates having the ability to adjudicate. You sign up for a five or 10-year contract with performance parameters that you can get out of it if the supplier is not performing. That's how we do things in commercial industry. It's not how government does things. They need to change, so do we. They have to take the lead. Yeah. Okay, great. Appreciate the thoughts there. Maybe we can shift a little bit to the evolving ecosystem. We had Andrew in here yesterday. So many of the people here in the room got a little flavor of what some of these evolving players look like. Some of these guys are winning some decent contracts, right? Some at least high-profile contracts, the CCA in particular, right? I'm just kind of curious your general view of these evolving players, whether they represent a competitive threat, future partners, and whether that has informed or changed the way that you're approaching capital deployment. I know you have a venture arm, for example. If you gotten more aggressive. I think you've gotten more aggressive over the last few years on that, right? The first week as the CEO of the company, I doubled venture fund. So yeah, this is all in line with what we've been advocating for the last four or five years, again, which is if you look at the government-industry relationship in general, it essentially excludes the most vibrant, most investable parts of our economy, right? Tech, digital, AI, all of that. They're all based on subscription, value-based pricing models, and true fixed price, by the way, continuous improvement, and a vibrant commercial market where there's a lot of industries that they serve versus the one customers that we serve. So we have a whole different industry structure and relationship to our customer, our sort of sole customer, than that industry does. What I've been saying since I got in this role off the board in 2020 now is that we want to include all of those sectors of the economy. We also want to include the capital markets flow of funds that goes to that sector and not extract, but partner with those sectors to get the relevant technologies and capabilities into the national defense enterprise. So it could be Anduril, it could be a startup in Lockheed Martin Ventures, it could be, and it is, it's Verizon and IBM and NVIDIA who are partners with us. But those partnerships, even today, they're difficult. We use the Lattice system made by Anduril on one of our legacy radars in the CENTCOM region to make it a faster ability to figure out the improvements based on AI that we want in the radar. So we will partner with them, just like we do with Northrop Grumman, who makes a third of our airplane, the F-35, BAE. We partner with other companies by necessity because not any one company has all the investment, all the skill sets, et cetera. Even in our own industry, we certainly don't have as much technical talent and as much access to capital as the commercial tech world and telecom world has. And we need those skill sets. So I have been begging for this and advocating for it for years. The difference is there are some investors largely on the West Coast that said, well, let's give this a shot. But if that system that I talked about before doesn't change, that at-risk investment capital will wane. So all the new entrants, as you might call them, they're off to a good start on the technology S-curve or on the growth S-curve. But when they start to scale, unless the government changes its contracting policy, they will be in the same regime that we'll be in. And I think that's not what the investors are going to hope for. So we want them in. We want the big tech companies, and we want the startups to apply their research to what we do. And we are all for this. And so I want to advocate with them to make these changes. You know, what's interesting is that if there's ever going to be a moment where it's going to happen, it seems like it's going to be now, right? Because of this administration. That's the optimism piece. Look, this is crass. I want to use other people's money and other people's people, talented people, to make our ability to provide national defense systems and equipment to the government better. That's the goal of Lockheed Martin. And we want them in. Now, they may be a supplier to us. We may be a supplier to them. That's how this industry works. So let's bring the best technology. Let's set up a standards body. You figure that out like we have in telecom, the 3GPP. Let's have an accelerated differentiated acquisition process for digital services from the government to us. And we will play just like we play with our cohorts right now. Let's just dream for a minute. Okay. All of this happens. All this procurement reform happens, and we become more like a normal commercial industry, for lack of a better word, right? Three, four, five years down the road from now, with that in the rearview mirror, how does that change the financial model of Lockheed and legacy companies in the industry that have been restricted on their ability to go engage in M&A, right? A good chunk of the research and development that you work on today is funded, right? You do have IRAD, but a lot of it is funded. And you have been returning cash to shareholders through a combination of dividends and share repurchases. Let's talk maybe just about all of those aspects of the financial model and what might change to fund an R&D go into IRAD. We both want to reinvest more in the company, and Jay can explain how that works. Yeah. In the big picture, both Jim and I worked in commercial aerospace. So we're very familiar with that model where most of the investment is borne by the players, and then they make a margin of production. And in most cases, and sometimes they don't, but then they make a higher margin than sustainment element of a phase. At the end of the day, the economics, it just shifts from one area to another. But to have an acceptable, call it IRR or discounted cash flow model, you are going to have to see that recovery, that investment recovery at some point in the life cycle of a program. And so what it would become is more commercial-like. You would probably have the industry do more of the investment upfront. It would be probably less funding from the customer, but then the margin profile and production and sustainment would be higher. And you would have to have just an enterprise that would have to get themselves comfortable with that in order to make the economic model work and have entrants continue to, back to Jim's point, want to stay in the industry. Because if you just put more investment on the industry upfront and stick the industry with, just call it 10% margins, the economic model is really never going to work. Yeah. And so it's truly adopting the true kind of what you see in commercial. Now, what that does is, you know, Jason, it does increase risk upfront on the investment side, whether you can manage the development cycle and all of that, but that's going to inform what your margin profile is going to look downstream. So in many respects, it's something that, again, both Jim and I are pretty comfortable with because we've got experience in that. It would be a transition for the industry. There's no question about it. But I think the industry is very capable. I mean, I think that the industry as a whole gets maligned unfairly. Very good people, very strong processes. And I think it can make the pivot to a more commercial model. Yeah, and there's going to be more risk and less control on both sides, the industry and the government side, if you implement some of these changes. One area of this is, in my last company, we were building telecom transmission sites for these networks. The first customer that we'd utilize the site was like 3% IRR. 3%. That's not even the cost of capital. When the second customer came on to the site, it went up to 15%. When the third customer came on the site, it came up to 22%. So there was risk there. If you didn't get all the wireless carriers or the majority of them on most of your sites, you're going to not have a successful business model, right? The carriers basically said, wow, this is way more expensive than I want it to be. But if I put in my own site for myself, it's going to even be more expensive. So you value price it. You take risk. The boards and the government and Congress are going to have to be willing to accept those risks and uncertainties because we haven't always operated that way together. But we need to start marching down the road and picking whether it's digital services first or Iron Dome first or some other, just let's show it works in stages. Because this industry government relationship needs to change to draw in capital, to draw in more companies to participate, and to really show that if you invest in an Anduril or Palantir or somebody early, that you will get those greater than 10% margins when that S-curve flattened out. That point is an important one in terms of value-based pricing versus cost-based pricing. Because that's the only way you can really make a model work where you're doing all the investment or much of the investment upfront. It's more value-based what you see in commercial today. And the enterprise itself would have to be comfortable with just higher industry having higher run rate margins. But they can't forget the fact that you have to recover the initial investment that you made. It's just math at the end of the day. Yeah. So speaking of investment, and you mentioned Lattice as being incorporated into one of your radars, some of the most successful of these VC backed companies, and I'll throw Palantir in there. I mean, they're just simply because they've kind of come out and are successful now, but they're all software. Most of them are leading with software. I find it interesting that you're incorporating Lattice into some of your hardware. I'm just kind of curious if you think about, I don't know what the right metric is, but if you think about percentage of your headcount that's dedicated to software development, or do you have a software center of excellence? Do you have something out in the Silicon Valley where you're setting up shop there and attracting people to come work at a Lockheed office? This is really an interesting point. Sunnyvale, California, it's in Silicon Valley. It's right next to old Navy dirigible base, believe it or not. Silicon Valley started right there because Lockheed at the time was building the first generation satellites in the '50s and '60s in that location beside an old Navy base. Again, for dirigibles, where the Navy wanted to develop those systems. Lockheed Martin came in and said, well, we need microprocessors. We need software development and started building up that little ecosystem around it. Like I said, one company can't do all of this itself. Even in the '50s and '60s, it couldn't. That helped generate the venture and startup world. That's the seed of Silicon Valley: Lockheed Martin's plant. It's still at Sunnyvale, still doing incredible things, believe me. So yes, we have a significant proportion of our people in the software space there and other places. There are 70,000 engineers and scientists and IT specialists in Lockheed Martin. There are 120,000 total people. 70,000 of them are in those categories. About a third of the 70,000 are software aligned. The really other important part of your question, which is indirect, but I'll answer it now, is that you cannot do anything at theater level effect, right? Theater, not like a movie theater, but a theater of operations, the Pacific, the South China Sea, the eastern flank of NATO. You can't do anything in our arena, the military's arena, unless it's worthwhile, unless you have theater scale effects. And we use a lot of synonyms and things. We are in the business of deterring warfare by being in a position to demonstrate that you will lose if you start something with us. That's called deterrence, and I want to look at this whole problem. How do you create deterrence from great power conflict? You just keep getting better and better and better at all the missions that you need to do, like surface warfare. That's a euphemism for sinking ships, or air superiority, which is a euphemism for shooting down planes. Those are our apps. We have to get better at those apps all the time at a level of scale that will be effective in a theater to deter someone like Iran, China, or Russia from taking action against us or our allies, that's the engineering problem you have. The way we've laid it out in our company is not to just build a better airplane because we're going to try to do that for the air superiority mission, but it's to start like we would in building a telecom network or designing a new 5G system back in the telecom or technology space, which is like, what is the hardware I have now? What is the software that's out there now? What are the edge devices people use? Let's start with T equals zero and then have what we call it here a mission capability roadmap for technology that while the airplane is getting better and the new one comes in six years from now, we're using digital technology, AI, 5G, distributed cloud, et cetera, autonomy to get better at that mission all the time, even with the equipment I have today. Because you have to have an aircraft, for example, for air superiority that's supersonic, that's stealth, that can carry between four and eight air-to-air missiles, which are about as long as this stage, and fight the peer level fight. So if you have the software, that's interesting. If the software doesn't help the hardware become more effective, it's useless, essentially. So we have to integrate just like we do in commercial tech, right? If you want to have autonomous cars, which I thought we'd have by now, and so did Elon and other people when we were designing these networks, they're not here yet. Because you have to get to the hardware of the car through the firmware of the vehicle and then into the cloud, and then the apps and software and all the AI and development can then control the vehicle. Well, we have the same issue here. Unless you can get to the F-35 hardware or the Aegis screen on the destroyer, it's interesting. You have to go all the way through the cloud, the software, the AI, the firmware into the equipment, and this is heavy equipment that you've got to have hundreds or thousands of, like Black Hawk helicopters. I think the Army has like thousands of them. The Air Force has hundreds and hundreds of fighter jets. You can't just not use them. You can't just not make them better because the adversary is trying to get better all the time too, so this is moving the deterrence goalpost five yards down the field every year with software, hardware, upgrades, new aircraft, new ship, whatever it's going to be on a continuous basis, and that's the way to look at this. The tech world looks at what they deliver as services that get better all the time. What the Department of Defense looks at is we need things to defend the country. We want more things. We want different things. We want better things. It's the whole wrong way to look at it. I think our company can be the pathfinder in changing this, and you'll get efficiency out of it, and you'll also get effectiveness out of it. Because we are still operating in a 20th-century paradigm between government and industry with these cost-based contracts, all this oversight that precludes the country from bringing in, again, its most vibrant sectors of the economy to help the national defense. I think there's a huge opportunity for our company to lead this, and this administration is the most optimistic time for us to actually drive this kind of system. Right. And our model is, I'd say, an optimized hybrid model in terms of software development because we have a lot of our software development embedded in our mission systems. And so one of the things, one of the many things that makes Lockheed Martin a special company is our decades of mission experience. And so a lot of the software development is with the people that have that mission experience so they can develop the best software. Having said that, what we do is also have software libraries so that we can share across the entire company different software development. And we also have our artificial intelligence center, which we call a lake. It's called Lockheed Martin Artificial Intelligence Center. It is a centralized group that does provide support and algorithm for algorithm development to all of the businesses across the company. So we think right now it's the best optimized model for us. We continue to evaluate it. So there's a shared model in terms of you can reuse software, but we also believe the fact that we have such embedded knowledge and such deep knowledge of the mission system, we don't want to totally disconnect it from the people that don't have the understanding of those mission requirements. Right. Okay. Great. If it's okay with you, I'd like to go rapid fire around the world. So I think we've got eight and a half minutes left, and I got a few things more that I'd like to cover. You're just back from the Munich conference. The message, I think, was pretty clear from the United States that the Europeans are maybe going to be a little bit more on their own than they have been in the past, which is going to drive higher budgets in Europe. So there's two questions related to Europe. One, what is it that you're doing today in Europe to support your U.S. customer? So what missions are you on over there? And then secondly, what are you selling into the countries in Europe directly today that you think have an opportunity to grow as this transition happens? I mean, there's a litany of programs and services that we provide to the European customer base. And the other piece of this, which I'll embellish a little bit more in a minute, Jason, is the co-production aspect of this. So we provide goods and services. The F-35 has basically run the table in Europe as far as fighter competitions over the last 10 years. We won, I think, almost every one of them because it's the best aircraft in the world. It's the only fifth generation in production. Those countries know they need that to stave off the Russian threat to deter it. That's just one example, but everything from HIMARS to F-35, we're actually starting to win satellite contracts in Europe and things like that. So our traditional business is pervasive in Europe. And part of the benefit of us being pervasive in Europe is the scope of our company, whether it's helicopters, ships, fire control systems, satellites. It creates an interoperability web, if you will. So when you've got 30-some countries in NATO, if they buy equipment from us or Northrop or Boeing, they're going to get automatic interoperability, right? The F-35 itself has a data link that it instantly shares with all other F-35s, and it allows for something we didn't really do much when I was in the Air Force, which is mixed country formation. So four planes go out, eight planes go out. Usually, it's all U.S. or it's all Dutch or whatever. There's now these flights going out with two Dutch and two American or in the Pacific, four Japanese, four Australian. And the data links are all shared automatically. So there's a benefit to that. And then if we can get this mission roadmap laid out and start connecting things that are made by Northrop Grumman or made by Boeing, that's even going to be better. So the goal we have is to take our big platform position across all the defense people call domains, so space, air, sea, undersea, land, et cetera, cyber, and interconnect as much of that as possible to get efficiency increased while you get capability rising. So that's the goal that we have. And in Europe, it's actually the most relevant because it's such a fragmented defense market. So that's what we do today. What I want to do more of is co-production. So we have co-production agreements or operations in Poland, Germany, UK, Italy, just in Europe alone. We want to expand that. And there's some reasons that are doubly worthwhile to do that expansion. One is the fragility of the production system will be reduced if you have more than one location that you're actually performing tasks, operations, manufacturing, whatever. So that's just industrial-based resilience that will come with this co-production. The second piece of it is a lot of countries want industrial participation in their selection process for what airplane to buy or what fire control radar to buy, what missile launcher that they want to have in their services. And you've got to show up often with industrial participation. We're good at that, and we want to do it. The real reason to go through more co-production is, first of all, there will be more jobs in the U.S. because of it and some jobs somewhere else versus losing a competition to a Korean company, for example. So we want to bolster those U.S. jobs in our supply chain. 80% plus of the value added of a HIMARS vehicle or an F-35 or whatever is going to come from the U.S. The other piece of this is just like airlines where we used to work with, they want operational capability where their planes are, not where our factory is necessarily, right? So rather than have certain tasks done in Fort Worth, Texas, we should have them done somewhere in Asia, somewhere in Europe, and maybe even somewhere in the Middle East where we don't have to send equipment all the way back to the U.S., for example, for repair or upgrade. We can do it in the region. When there's contested logistics potentially, which we've never in probably 80 years had to deal with, where you can't rely on shipments across the ocean, you can't rely on airlift. You have to do more things in the region because the contested logistics on top of everything else. This is really worth doing, so our relationship with the European partners is really strong. Again, when I was there last week, I want more of what you make, and I want to get it faster. How do we do that, and part of it will be co-production. Right. Okay. Great. It's a win-win-win. We think about that. We develop a long-term strategic relationship with the country. You help develop the local supply chain and develop relationships with them. And at the same time, we're improving supply chain resiliency. Yeah. There's two other regions of the world that we need to get to, but I do want to ask something about the F-35 because that's been in the news and in the tweet world here of late. So I want to give you an opportunity now to talk about the future of the F-35 program in a world in which drones are proliferating. You have the leader of DOGE that believes that the future of warfare is autonomous and drone. It's not manned. And I guess I saw a podcast where he was sitting down with the commandant of West Point. And he said that if a manned fighter goes into a fight in the future war, it's going to have to be analog because we're going to have to flood the theater with electromagnetic forces that will hopefully defeat the drones, but you won't be able to have an F-35 survive in that environment. So I'd love to get your longer-term take on the role of the F-35 in the future fight. Not because I work at Lockheed Martin, because I used to be in this business. It is essential at this point in time, right? So think about your mission capability roadmap, air superiority and two examples. When you don't have air superiority, you get long-distance trench warfare with drones in Ukraine. So the trench warfare from World War I was about 200 yards between trenches. It's 20 kilometers now between trenches because they're drones. So rather than run over and throw a hand grenade in the trench or come in with your machine gun and try to shoot somebody, you can send a drone out 20 kilometers, control it, one person, one drone, and chase someone down, which you've seen in the videos, and it's scary and horrible, but you've basically got drone warfare, high attrition, lots of casualties versus what Israel did to Iran with air superiority. They went in. I'm not supposed to say what kind of plane, but they had fifth-generation planes go into Iranian airspace, probably the second, third, or fourth best protected airspace in the world, take out the whole air defense system, bomb all the missile factories in one night with no losses, and wiped out their entire ability to defend themselves. You haven't heard much from Iran since that night. Yeah, that's air superiority. The only way to get it in the next 10 or 20 or 30 years is to have fifth-generation manned aircraft because the tech isn't there, the network isn't there, the drones aren't capable enough to do that mission. They're not stealth. They will not survive. And frankly, and I've spoken to pretty high levels of government on this personally, there are missions where it's essential to have a human involved. One of them would be tactical strike, tactical nuclear strike. F-35, for example, not the only one, but F-35 is a nuclear-certified delivery platform. Cybersecurity is always a question, but if you've got a trusted pilot in the cockpit and you get instructions like we used to get to say, "Jay will be the guy in my squadron. I know his voice, and he will tell me, 'Here's the code for turning around or keeping going.' If you don't get it by a certain point in time, you keep going. And it's only going to come from me. You'll hear my voice. I'll read the code out of a book that is printed like this by hand. And the only four or five people in the world that know what those codes are are the ones in this room right here. And you go. Everything can be ultimately potentially spoofed. It can be cyber-attacked. It can be electronic warfare disabled, potentially. The human, at least with a survivable airplane, can get through and do the mission no matter what the EW environment's going to be. So there's a plus and minus down with the commandant's thinking that in the Air Force, human pilots will always have a role. It'll be a diminishing role as time goes on, but it's going to take two to three decades. Look, as I said, I was in the telecom industry in 2010, and Elon said the same thing about the same time. We thought by 2020, there would be proliferation of fully autonomous cars in the United States. The investment in the network is unsupportable to do that. The technology's not ready. The regulatory regime isn't ready. It takes decades to get from one system to another at that scale. You're talking about hundreds of millions of vehicles, a couple hundred million vehicles in the United States. You're talking about 1,000 airplanes or 5,000 drones. The tech and the network is not there. And right now, it's not economically or technically supportable to get there in any near-term timeframe. Yeah, you have to have the assets at scale to do those kinds of missions, those superiority missions. We want to win decisively and not get a lot of casualties. And what drones will do, first of all, they won't survive in large part. Second of all, they can't even reach the altitudes that the fighters are going to be flying supersonic at to come and bomb Taiwan or whatever they're going to do. There's nothing that can be done today with drones, to my knowledge, against fifth-gen aircraft and to disable and destroy them in flight. I don't see it. Maybe it's out there, but I don't see it. So this is a really huge risk to the country. Yeah, if we create a period of vulnerability between now and whatever that day is, 20 or 30 years from now, because of deterrence. If nothing else, think of the deterrence factor. If the Chinese, because they're building 100-plus J-20s a year, that's public information. And we're building for the United States about 80 F-35s a year. Just that alone. Yeah, and guess what? Of those 80 F-35s, only a fraction of them go to the Pacific theater. The Europeans get some. Some of our European or Pacific allies get a few too. But from a deterrence perspective, if your leadership in China and you see your 5th-gen aircraft deployed in the region, 1.5x, 2x versus what the others have, our deterrence factor just went down. And that's the thing that I'm trying to maintain is what's the deterrence factor? What do we have to do as industry and government to keep it as high as possible for as long as possible? And creating a period of vulnerability, hoping for the next technology that isn't ready for prime time yet is a real risk to the country. Yeah. Perfect. I see we've gone nearly four minutes over. I told you I was going to give you a drop-the-mic question. I think that ended up being it. That was great. I really appreciate everybody sticking with us. I appreciate both of you being here today. And I wish you guys the best of luck with everything over the next few months.