So we'll get started with our next session. We have Northrop Grumman here. We have Kathy Warden, Chair and CEO, and Dave Keffer, CFO. So Dave's gonna kick it off with some obligatory comments, and then we'll get straight into Q&A. Thanks, David. I'll keep it brief. Good morning, everyone. Today, we're going to make some forward-looking statements, and those statements involve risks and uncertainties, and information about these risks and uncertainties can be found in our SEC filings. With that, hand it back to you. Great. All right. So Kathy, I'll start with you. So I think, you know, we have to start with the budget high level. There's always seems to be a new twist and turn with the budget negotiations. This year's, you know, I've been doing this for a while, and this year's a more unique process. So we don't have a 2024 budget. We have, you know, the potential of sequestration, which gets closer kind of by the day. And then, I guess, in the interim, we're supposed to get a 2025 budget before we finish the 2024 budget. So maybe your thoughts, what you're hearing in D.C., how this potentially could play out. Well, David, within the noise that you just described, what we're seeing in Washington is still strong bipartisan support for defense spending. And while our base case is that we will not have a full year CR or trip sequester, we do expect that the continuing resolution will likely extend into April, just based on the progress that we see in Washington right now. In terms of our portfolio, we see good alignment to the highest priorities within the budget, so we don't see a material impact if sequestration were to occur. But like I said, we don't see that being the base case. We follow the top line, and right now, what we see is strong bipartisan support for the spending. It's just a matter of getting these bills over the finish line. Right. Okay. So last year, I think initially you started out with 4%-5% guidance. You ended up doing 7%, so well ahead. This year you're guiding to 4%-5%. I guess, given what you talked about, your alignment with the priorities, what there still is in terms of outlays to come through, why should we expect things to, I guess, I mean, it's still, you know, 4%-5% is still good. Yes. Tougher comparison, but why- Mm-hmm. Why would growth decelerate to that kind of, kind of level? Well, if you look at our growth over the last several years, it's averaged around 5%. And so to your point, 7% last year was a particularly strong year. We saw some growth accelerate towards the end of the year, even beyond our own expectations, beating our guide for the year. And the 4%-5% that we're now talking about for 2024 is off of that higher delivered sales in 2023. So in real dollar sales growth, we actually end up guiding this year above the outlook that we provided in October. So strong growth continues at our company. We do see that there are some puts and takes within our portfolio. Some areas that are just naturally declining as programs end, but broad-based growth across all four of our segments. And a bit more balanced this year than we've seen in the past. Space has been a really strong growth engine for our company, growing double digits each for the last several years. We expect that sector, in particular, to modulate now off of this much higher starting point, but all four of our business or businesses are projecting solid growth as we head into 2024. Okay. We'll get into some of the kind of puts and takes in terms of the growth in a little bit. First one to ask you: You've talked a lot about, in the past, your ability to hire, you know, retain, attract talent. Talk about how that's progressed, what your hiring plans are for this year as compared to the last couple of years. Well, last year, we netted about 6,500 additional employees into the company. That was a combination of our ability to hire, really strengthening, starting at the end of 2022 and all throughout 2023, and also our attrition rates going back to pre-pandemic levels. As a matter of fact, our attrition in 2023 was the lowest we've seen since 2017. So really solid labor dynamics for us to be able to hire into the company. We're now, as a company, for the first time, over 100,000 employees strong, and we expect to continue to add headcount again in 2024, consistent with the growth expectations we just talked about. Yeah. So we've heard a lot about, you know, fixed price, taking on fixed price development programs, those now kind of coming through. Talk about how you've, based on the lessons learned, from this experience, how you've kind of adapted and changed how you go to market, how you bid, and then also your program review process. How, you know, when there are issues, how those are brought to light and dealt with? Mm-hmm. I'm pleased that our team has remained fairly disciplined in fixed price development. We did, however, enter into the B-21 contract, which was cost-plus development, but the bidding of production lots well in advance of having completed the development phase. And we've talked about the lessons that we've learned from that, and we draw a harder line on that now. But what I would say is that our discipline around bidding has been in place, and we feel good about the backlog growth that we've seen in these recent years, and that we have done that in a way that sets our teams up for success. That the contract type, by and large, matches a risk/reward scenario that's fair for us and our shareholders, but also is in line with creating value for our customers.... We then, once we have the right contract type in place, are able to focus on performing and executing to our commitments. We have a rigorous internal review process around both our bidding and our execution framework. We, of course, involve auditors in our financials, but we involve independent reviewers on a regular basis to come in and test the assumptions that we're making as a team, and it allows us then to have a set of baseline assumptions that the team is able to consistently execute to. You see this in our overall EAC performance, which even through the pandemic and the volatility that we faced there, we're, we're proud of the team, that they've been able to hold margins better than most in the industry. We're sitting now around 11% segment operating margin, with an expectation that we can now start to expand that as some of the macroeconomic pressures subside, our cost efficiency kicks in, and our mix begins to shift in a favorable way. Gotcha. Yeah, we'll, we'll talk a little bit more about that. First, on B-21, so you've, you've taken the charge, I guess probably maybe you high level, and Dave talked about the, the financials. You know, what's the opportunity for it to get better? Mm-hmm. But what's also the risk? You know, there's a lot of concern once you take a charge on something. You know, they, they continue on. Mm-hmm. How do you kind of measure the opportunity and risk from here on B-21? Well, as I said on our last call, I see it is balanced, and we've looked at a lot of opportunities and risks in any estimate at completion assumption that we make on a program. B-21 is no exception. I will say that process I just spoke about, of rigorous review, independent assessment to help test our assumptions, we are certainly bringing that to bear on the B-21, so that we have a baseline that was reflected in the charge that we took last quarter, that now we believe we can perform to. And we will look at those assumptions every quarter, as we do on every program. But it is still my expectation and our team's commitment to be able to deliver within what we have laid out, assuming we don't encounter new events. And so we will keep you posted as we look ahead, but there are both opportunities and risks, as you said, still, as we execute through these first LRIP slots of the program. I think that's a great summary. Clearly, we know more today than we did a year and two years ago, having completed the production and ground tests and entered flight tests for the first aircraft. We have more suppliers under, you know, final contracts for the LRIP phase than we did a year ago, a lot more than we did a year ago. So all of that leads to additional information that we've been able to bake into our latest assumptions. As Kathy noted, though, we'll continue to update those assumptions, as, you know, the phase continues over, you know, the next several years, as we've noted, through approximately the end of the decade, and we'll update those assumptions as appropriate. And I'll just add, you know, the team is incredibly committed, and when I talk about the team, the Air Force and the Northrop Grumman team, to make sure this program continues to deliver well, and that includes cost containment, so that we are able to minimize any impact to our shareholders. So I don't want you to think that we took a charge, and now we aren't as focused on it as we've ever been. We're incredibly focused on delivering within the program estimates. In terms of the growth drivers within the portfolio, I mean, we've all we obviously know about B-21 and Sentinel. They've kind of led the way. But what else beyond B-21 and Sentinel is, you know, contributing significantly to the, you know, to the growth outlook? Mm-hmm. I can touch on that. You want to talk about it? So, you know, we're really happy this year to have a very balanced outlook for sales growth across the portfolio. Across all four of our sectors, we're projecting growth this year. You noted earlier, 4%-5% is the enterprise-level growth rate projection. We put that at or near the top of the defense industry, and that's really driven by a set of opportunities across each of our businesses. In our Defense Systems business, the weapons and munitions market, both as a prime contract director and a supplier of rocket motors and other technologies, is a very active market. That is both in the U.S. and internationally as well, where there's tremendous demand. In our Mission Systems business, right from the, you know, microprocessing up through the technologies they support, through sensors and computing and processing technology, cyber technologies, we have tremendous demand in the Mission Systems portfolio. In Aeronautics, there's a set of new business opportunities on top of the existing large franchise programs, where we talk about B-21, our contributions to F-35, et cetera. And then in the Space business, we continue to expect that to be as fast, if not faster, growing than our other sectors this year. It continues to be a very active market, and we have a tremendous amount of backlog growth that we've built over the last several years that leads to opportunity for programs to go from development to production, others to continue to ramp. And so it's the Sentinels as well as, you know, the SDA portfolio, our Propulsion business, just a tremendous amount of growth opportunity continues in the Space business. You touched on munitions- Mm-hmm ... and the growth you're seeing there. That sits within your DS portfolio. Mm-hmm. The DS growth, I think you've the number you guide to is actually relatively low. Mm-hmm. Kind of, what's going on within the DS portfolio- Mm-hmm both munitions and everything else? ... as you point out, the munitions portfolio and really our broader tactical weapons portfolio that sits within Defense Systems is growing very nicely. What we also have in that portfolio is our command and control, integrated air and missile defense, a product line we call IBCS, and that too is growing double digits. What we are seeing as a bit of a headwind in that business, it's in our sustainment portfolio, significant training program that is coming to a close in 2024. So when I talked at the macro level about a couple of program headwinds, just naturally completing their course, that one of those sits within the Defense System sectors, which is suppressing the top line growth expectation for the segment. We have those two streams that I noted in tactical weapons and integrated air and missile defense that are both growing double digits. We expect those, of course, to be enduring growth opportunities and the sustainment headwind to really dissipate after 2024. So as you go around, you've talked in the past about programs that were, you know, legacy programs that were rolling off. As you go around the horns, you touched on DS, what about the other businesses, you know, AS, MS space, where you've got stuff that are, you know, programs that are a bit of a headwind? Right. So let me start with AS, because for the last couple of years, we've been talking about specific headwinds in AS, the Global Hawk and Joint STARS programs also coming to their natural conclusion. Those have run their course and are not in our year-to-year compares in a meaningful way, and so you start to see the B-21 growth really shine through. F-35, the F-18 are stable for now. F-18, of course, we expect that that program will come to its natural conclusion throughout the course of 2025, and yet we see other new opportunities that our AS sector is pursuing that could easily not only fill that, that, but also increase over time. So for AS, we are projecting that they have returned to growth, and they will stay in a growth posture for the next several years, at least. Within space, as Dave talked about, we are seeing programs that have been significant growth drivers, like Sentinel, like NGI, slowing growth. They're still growing, but at a slower rate, and the other parts of the portfolio also growing, which means the growth rate will come out of that double-digit stratosphere that we've seen and come back into the single digits, but still a healthy growth rate for our Space business. And the Mission Systems really continues with a steady mid-single digit growth, and it's across a wide variety of programs. Particular areas of growth in that portfolio are communications programs, our computing programs, but we're seeing nice growth in sensors as well. So really, a broad-based set of opportunities and continued program growth profiles as programs are ramping in production. So you touched on the opportunity to ask for stuff you're looking at- Mm-hmm. - to kind of fill in these holes. Wanted to ask about NGAD. Mm-hmm. Specifically, you said, you know, very clearly, you're not going to bid on the aircraft portion, but given your portfolio, there are other opportunities to participate in that. What are you looking at? What role could you still play on NGAD, and does that factor in at all in terms of what you're talking about? Or maybe elaborate what you're thinking about when, in terms of possibilities that could fill in that, you know- Mm-hmm. - some of those holes in AS. Right. Well, let me start with the other parts of our business that have important capabilities to provide to platform integrators. Our Mission Systems portfolio is often sought after to complement a platform prime's offering, and with sixth-generation aircraft in particular, we have some of the most capable radars, electronic warfare and communication suites in the world. So I fully expect that we will find a place for those, not just on Northrop Grumman platforms, but other prime platforms as well. And that's true both in air, space, and even shipboard platforms. With our Defense Systems portfolio, we increasingly have prime weapons capabilities that will go on various competitor platforms. Of course, we're the prime on AARGM-ER, which is being qualified for the F-35, already qualified for the F-18. We are building the Stand-in Attack Weapon. These are weapon systems that we see going into other primes' platforms. But when it comes back to AS, you asked about how we're positioned there for new opportunities, and we have shared that we are pursuing the Collaborative Combat Aircraft. That is an opportunity that should be awarded in the near term. Then, of course, we're looking at other 6th-gen aircraft proposals that we would be submitting this year for down select, maybe next. Moving over to margins. Now, there's been a little bit of pressure on margins. Mm-hmm. but you continue to kind of signal a positive trajectory out- Mm-hmm. - into the future. So, one of those, you know, one of the reasons I think, is mix, where you've shifted a lot more to cost from fix. Mm. So talk about how mix could play, you know, play in as a tailwind to margins over the next several years. Mm-hmm. There's really two ways that we think about our mix shifting that can be complementary to our margin expansion plans. The first is our mix of cost plus to a fixed price type contracts. On the right, fixed price contracts that are more mature production tend to have higher margin rates, and we fully expect that and see that as we have programs that are going to progress into production over these next several years and have higher margin rates. And that mix is not a dramatic shift. It, it is somewhat subtle, but it does create a tailwind to margins. And we believe that 2023 was really our high watermark for cost type contracts, a little bit over 50%, 53, to be precise, in 2023, and we see that gradually shifting into more of a 45% ballpark over the next several years. Now, if we were wildly successful in winning a lot of new programs that were cost-type developments, which is the kind of development work we do, to be clear, then that might not shift quite as much over that period of time. But nonetheless, we see mix as a tailwind, and that's just based on the backlog that we have today. We also see international growth being a tailwind to margin expansion because our international portfolio generally has higher margin rates. So as we've talked about the munitions portfolio, for instance, and more of that capacity going to international customers, that too, should create a bit of a tailwind. Yeah. Looking at the margin trajectory by segment, it seems like DS, MS, relatively stable. Mm-hmm. As previously thought about you, thought you could hold the line. Mm-hmm. Margins, you guide the lower margins this year on B-21, you know, higher contribution from B-21. I would assume the B-21 contribution continues to grow. Mm-hmm. So, how do you hold the line from here, and how don't AS margins- Mm-hmm. Go lower from here? Mm-hmm. So as we look at the AS margin profile, the margin dollars are remaining constant, and that's the important thing to keep in mind. As we have lowered the margin rate, we have increased the volume, and so what we really are focused on is the margin dollars that that business is able to generate, and we have remained constant in our outlook for that for this year. So, you know, I think it, we care about margin rate, clearly, as an indicator of performance, but in this case, it's not a performance question, it's just a volume of lower margin business. But if we are getting the volume, we're quite happy to take the earning dollars along with it. Okay. And then from an opportunity standpoint, you know, Space margins have been most impacted, I think, by additional costs, you know- Mm-hmm. Low-cost development-type work. Space margins are well below where they've been in the past. Yeah. You know, what's the opportunity there? What's the potential trajectory for margin improvement in space? You know, I think Space is a good microcosm of the three levers of margin expansion that we've talked about at the company level, and you'll see those in perhaps greater opportunity at Space than elsewhere. To your point, they've won so much new business over the last several years that a lot of which has been in cost-type development phases over the last two, three years, that its cost-type mix has increased substantially. And through the middle of the decade and beyond, we anticipate that to come down again and normalize with more fixed price work as some of the early cost-type development moves to production. We'll also see the easing of macroeconomic pressures benefit that business more than the others. A lot of the brand-new work in Space that has grown so rapidly over the last few years was essentially born during COVID and the macroeconomic effects that that endured after. And so as that work is newly priced for options and additional phases, there's an opportunity to take into account, you know, the current conditions around rates and labor markets and supply chains, and get all of that worked into a more normalized profitability level for those programs going forward. And then cost efficiency is the third core element at the company level, and certainly, it's an area of focus in our Space business as well, having gone through tremendous growth in the top line and in the backlog. As we've generated, you know, strong early performance on those programs, now we have an opportunity to drive margin performance and cash performance over time as those programs mature. HALO, that's Mm-hmm. in the Space portfolio. Mm-hmm. I think you've taken a charge there. Mm-hmm. You have negotiations going on with NASA. What is the... I guess, what is the program? Mm-hmm. What has been the issue, and what's the status of these negotiations with NASA with regard to the way forward? Mm-hmm. Yes. The program is a part of the Artemis architecture, and it is the habitation and logistics outpost. That's what HALO stands for. It's actually a module that will house astronauts as they go to, and scientists and researchers for that matter, over time, as they go to space and operate and go to and from the Moon. It connects to the Gateway, which is another part of the Artemis program, and as a result, the requirements for HALO and the requirements for Gateway have evolved as those two programs are maturing in tandem. That has created change that the HALO program team has needed to absorb. We had done a cost plus phase of the program to do a design, and then we're moving into a fixed price to complete that design and build. But we've seen a lot of change injected into the program. So what we are working on with NASA is getting a better comprehension of the change required and how that will continue to evolve over time. And we have submitted an ECP, a change proposal, to NASA that we're in the middle of negotiating to get those costs covered. It's been a bit tricky in that it is now in a fixed price contract type, so we're holding the line on change, but these changes are necessary to have the architecture work, and so we are in coordination with NASA on that in a negotiation. At the same time, as we do with every EAC, we wanted to make sure we were capturing the risk associated with that, and that is why we took the charge that we did. So, with the time we have left, bring it back to kind of high level, and ask, I think, you know, for you, Dave, balance sheet. Mm-hmm. So you've levered up a bit. You know, you, you took on some additional debt. You're doing- you did the ASR. How much... You know, what's the plan with the balance sheet from here and potentially using that to, you know, to enhance your shareholder returns? Sure. We feel really good about where our balance sheet stands today. To your point, we had a bond offering in the end of January. As we noted on our earnings call, a portion of those proceeds are to refinance the $1.5 billion coming due in January 2025. Others are for other general corporate purposes, including, to your point, the ASR that we kicked off in the days following it, and our general plans for shareholder returns, as well as the management of the business. We feel like our balance sheet is in excellent shape. We project minimal pension funding requirements over the next several years. Our pension plan continues to be very close to 100% funded, as you may have seen in our 10-K. And so that creates affordability for our customers and competitiveness there, as well as really eliminates the near-term need for cash contributions. We'll continue to have a balanced capital deployment approach. Funding our capacity and capabilities through capital expenditures has been a priority, a top priority. We've invested meaningfully, up to 4.5% of our sales in 2023 and 2024. We do expect those demands on CapEx to come down over the next few years. That further provides us optionality around the combination of shareholder returns and anything else that avails itself during that period. So we think we have a lot of optionality, a lot of good liquidity ahead of us, and we'll look to continue making decisions based on all the different environmental factors. Great. So can we pull up the polling system, please? You all, with the keypads, if you could all participate. I know I would appreciate it. I'm sure you would- We love the feedback as well. Yeah. Some owners, some opportunities. Mm-hmm. Next question, please. If you could rekey in. Next question, please. That's good. Okay, next one. Would never guess. Shock. And then the last one. Multiple. What multiples should the stock trade at? Okay. About where you are. Mm-hmm. Kathy, Dave, thank you. Thanks, Dave. Thanks for the continued participation in our conference. Thank you, David, and thank all of you. Thank you. Thanks. Thank you. Looks like the audience are in a good place.