Good day, ladies and gentlemen. Welcome to the General Dynamics Q12016 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operation Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today's conference may be recorded. I'd now like to introduce your host for today's conference, Erin Linnihan, Staff Vice President of Investor Relations. Erin, please go ahead.

As always, any forward-looking statements made today represent our estimates. These estimates are subject to some risks and uncertainties. Additional information regarding these factors is in the company's 10-K and 10-Q filing. I'd like to turn the call over to our Chairman and Chief Executive Officer, Phebe Novakovic.

Thanks, Erin. I will keep my remarks somewhat brief, since this quarter's results are relatively straightforward. I'll try to give you some of the more prosaic data up-front and then give you a little bit of color and insight from my perspective. The first quarter earnings from continuing operations were $2.34 per fully diluted share on revenues somewhat in excess of $7.7 billion. Operating earnings of slightly over $1 billion, and earnings from continuing operations of $730 million. We beat analyst consensus by $0.18. We were also better than our previous guidance to you. The diluted weighted average share count was $312.3 million for the quarter, compared to consensus of about $315 million, which accounts for approximately $0.02 of the out-performance. I should note that at the same time a year ago, the diluted weighted share count was 22.4 million shares higher. Our effective tax rate in the quarter was 29.9%, somewhat higher than anticipated. Therefore, almost all of the out-performance came from strong operating results, as evidenced by the operating margin of 13.6%. With respect to cash, we had $439 million net cash provided by operating activity. After capital expenditures of 65 million, we had $374 million of free cash flow from operations. The general comparisons quarter-over-quarter reflect, as you would imagine, the strong operating performance. Compared to first quarter 2015, revenue was down $60 million, less than 1%. However, our operating earnings were up $26 million, or 2.5% over the prior year's quarter on a strange of a 40-basis point improvement in margins. On a sequential basis, revenue was down $85 million or 1.1%. but operating earnings were up $17 million on a 30-basis point improvement in margin. All of the foregoing is a reflection of positive operating leverage. Finally, EPS from continuing operations was up 9.3% over…

Thank you, Phebe, and good morning. About a year ago we started talking about the strengthening of the U.S. dollar and the resulting impact that foreign exchange rates had on our reported results, especially within Combat Systems. Remember we're referring to the translation of our international results into U.S. dollars rather than any economic harm to our contracts. This continues to be a factor in 2016, and in the first quarter, assuming stable exchange rates from the year ago period, our revenues in the Combat segment would have declined by 2.3% versus the 6.6% decline we reported. And for the company as a whole, first quarter revenue would have actually been up slightly from last year. Moving on to a few other income statement matters. We took a charge of $13 million in discontinued operations to record the final resolution of some outstanding items related to a disposition that closed last year. We don't expect any further activity in this area during the year. Net interest expense in the quarter was $22 million versus $21 million in the first quarter of 2015. On the capital deployment front, we expended just over a billion dollars on the repurchase of 7.8 million shares in the first quarter. When you combine our share repurchases with our dividend payments, we spent $1.2 billion in shareholder friendly actions during the first quarter. That's more than three times our free cash flow from operations, and we used a little bit of that balance sheet cash to do so. At the end of the first quarter, our balance sheet remains strong and reflects a cash balance of $1.8 billion and a net debt position of $1.5 billion. As Phebe mentioned, our effective tax rate was 29.9% for the quarter. While that was slightly higher than our full year forecast, we're still on course for a mid-29% tax rate for the full year. Erin that concludes my remarks. I'll turn it back over to you for the Q&A.

Thanks Jason. As a quick reminder, we ask participants to ask only one question so that everyone has a chance to participate. If you have additional questions, please get back into the queue. Liz [ph], could you remind participants how to enter the queue?

[Operator Instructions] Our first question comes from the line of Jason M. Gursky with Citi.

Hey. Good morning, Phebe.

Good morning, Jason.

I was wondering if you could drive a little bit - good morning. I was wondering if you could dive a little bit deeper on the Aerospace business that you talked about, a revenue slip or a push out or maybe it was something that was driven on your own volition, but some sort of slip into next year on the revenue side. I'm wondering if you could dive a little bit deeper on that. And then also just talk about the sustainability of the margins that we saw this quarter. Obviously continued to see some expansion there. Just wondering whether these are any kind of one time kinds of things or whether we're setting a new bar here for margins? Thanks.

So let me talk a little bit about revenue and give you some insight into how we think about revenue and how we develop it with respect to Aerospace. We take revenue directly from the operating plan, and revenue in Aerospace is driven by a multitude of factors, as you would imagine, given the complexity of the business. Airplane green and completed deliveries, service volume and mix, which by the way can and do move across reporting periods. Pre-owned Jet Aviation Services and completion. So some of these are harder to predict because they have more estimating methodology embedded. For example, I think it's a pretty good one. Our plan has us selling between 10 to 14 pre-owned airplanes with revenue of $250 million at break-even margins. It's very difficult to forecast this. This quarter had one sale for $4 million, a good thing, but below our revenue estimate. On the other hand, the easiest factor to predict is airplane greens and completion deliveries because of the backlog of the 650. We have some other models to sell for delivery in Q4 but do not see that as a problem. As I told you, we're striving to keep our earnings flat for the year, and that's what we think is feasible.

And are the sustainability of the margins going-forward?

We're sticking with, you know, we're going to have slightly higher margins, as I said, because we're going to keep our earnings flat, and we're going to have slightly less revenue. So I think the margin you're going to see, as I noted some improvement, from what I guided you to which was about 19%.

Okay. Great. Thanks.

Our next question comes from the line of Ron Epstein with Bank of America, Merrill Lynch.

Hey. Good morning, Phebe.

Hey, Ron.

So I think probably no big surprise, sort of the question that everybody's, you know, kind of thinking about is, what demand are you seeing on 650? How is that going? I mean, it's - I think it's no secret there's been some more 650's piling up in the available for sale market. Can you just give everybody your perspective on what's going on there? And how healthy that market is, or not. Just some color on that?

Sure. Be happy to. So what I want to do is give you some facts instead of speculation. Think about it as firsthand intelligence, not second and third hand conjecture. So let me parse this in some specificity. First, sales activity, as I noted, in the quarter is similar to the quarter of last year. Our first quarter earnings were in line with all of our other prior years. In other words, we typically come off a strong fourth quarter, and orders this quarter were as anticipated, seasonably light. The pipeline, however, remains nicely active. I would note that the U.S. stock market fluctuations in that first quarter seemed to slow down some purchasing decisions, but our pipeline remains active. Today, we have the same competitive pressures that we've been dealing with for the last year, including overproduction of large cabin planes by others. So think about it this way. No change on that front. Demand for the 550 and 450 is in line with our expectations, and we continue to see interest in those planes, particularly the 550. The 650 is sold out for the year, and the first available ELS is about 24 months out. Remember, I think it's important to recall, but the 650 has 100% market share for a market it created, and from my perspective would appear to, I think it's safe to assume, or what I see, is that it's likely to remain in that position for the foreseeable future. It's still a hot plane and our demand is solid. The number of pre-owned 650's apparently on the market is higher than in the past, but to the best of our knowledge, we have not lost a single sale to pre-owned aircraft. So I've tried to parse for you sort of how we see it from the battlefield. And give you the facts by - by the, you know, the large cabin airplanes that we sell.

Okay. Great. Thank you.

Our next question comes from the line of Robert Stallard with Royal Bank of Canada.

Thanks so much. Good morning.

Good morning.

Maybe just to follow-up on Ron's question may be slightly more broadly. What you're seeing out there on the Aerospace side in terms of regional variances, but I don't think has changed in the first quarter this year, and also more broadly, on the pricing of your product?

Well, orders in the first quarter were 50% U.S., 30% Mid-Eastern Europe and 21% Asia Pacific, that goes everywhere from, and our region there is from Australia, Singapore, Hong Kong, into China. Frankly, not a whole lot of quarterly variance on the - where the orders are emanating from. Pricing, we have, as we noted, adjusted our prices for the 450, 550 commensurate with where they are in their life cycle. We have not, and do not, intend to adjust for 650 prices.

And any change on the G280 there?

No, it's about the same.

Okay. That's great. Thank you.

Our next question comes from the line of Peter J. Arment with Stern Agee CRT.

This quarter. Phebe, could you give us an update on kind of where things are on the G500 and G600 program? I saw the announcement earlier this month on kind of the progress but, you know, kind of how you view those programs transitioning into 2017 and 2018? Thanks.

Sure. Both airplanes, the G500 and the G600 are moving nicely through their test program. There have been no negative surprises. And as I think you alluded to, you read that we recently joined the wing to the fuselage and on the G600 we expect to fly later this year or early 2017. From the sales perspective, the customer interest in both airplanes has been good and, you know, and as we progress through the development program, we expect the demand to increase. Bye the way, to - for those of you who like to speculate about Gulfstream future models. I wanted to assure you that there is no 600ER. We'll be able to publish a definitive range for that plane once we're in test flight, and we have a reputation for exceeding our target, but the G600 is the G600.

I think we can take the next question, please.

Our next question comes from the line of Cai von Rumohr with Cowen and Co.

Yes. Thank you very much. Good numbers, Phebe.

Thank you.

Could you comment on two things, you know, why was your profitability quite so good this quarter, and particularly where was R&D? And secondly, you mentioned a couple of deliveries slipping from this year into next year. How many slipped? And why did they slip? Thank you.

So, you know, profitability and you're focus on cost is a quarter-by-quarter battle. At Gulfstream, we had a couple of things. Favorable mix, improved labor efficiency, very nice high margins at service at Gulfstream, both from the mix of service in the barn and performance. We also had substantial improvement in G&A expense, even though R&D went up slightly. You know, we're benefiting from all of the cost cutting we've been doing. We've been improving our processes, reducing waste and we're also getting some benefit from lower material costs. So the cost initiatives began in 2015 to reduce overhead and indirect throughout the enterprise are paying off.

And the slips in deliveries?

Yeah, so the slips in delivery. We, every year, every quarter, working with our customers, can determine whether it's more convenient or preferable to take one, two, three airplanes in a given quarter, in a given year. It's not unusual for us to move airplanes across reporting periods or across years even. So we typically haven't talked about it before, but I wanted to give you guys a little bit more understanding of a revenue number.

Thank you

Our next question comes from the line of Sam Pearlstein with Wells Fargo.

Good morning.

Hi, Sam.

Just to ask something other than Gulfstream. Can you talk a little bit about the Ohio replacement? And I guess what I'm trying to just think about is when does that start to grow for you in terms of revenues? When do you start booking and so we see it in backlog? And really doesn't that have a negative margin mix as you transition work from Virginia class to Ohio replacement, and how should we think about that transition?

So let me talk to you with that. We have, over the last three years, been increasing our revenue and our performance on Ohio, all in the engineering and design portfolio side of our business. Those margins are all in the cost plus work tend to be less than mature in production construction on submarines, right? So you've seen that that quarter-over-quarter for the last several years, and that along with the two per year for Virginia has driven some of the growth. That will - from my perspective, the engineering and design work will be stable going forward, until it begins to transition down in the latter part of this decade. The - while we don't have specific time lines for when we're going to build the first ship, I think it's in the 2020, 2021 timeframe, but we're going to see some early, likely to see a taskless prologue. Some early material purchases so that we can, you know, we can lock in some favorable rates. So that program will program will really begin to ramp up really in the 2020's and go on for some time. The margin profile way out then is going to be driven in the first instance by how the contract is structured, and I don't know. We don't know yet, and I think the Navy, we're still working with the Navy on how they want to do that. Typically, in complex naval ship building programs, the first ship is cost plus, but that's the Navy's decision and we'll have a lot more clarity about the margin performance. But, again, it's past is prologue, Electric Boat has shown the proclivity and the ability to increase their profitability by reducing their cost and improving their manufacturing efficiency hull over hull. So this is a very important program for General Dynamics. Increasingly now, but very much in the future.

And if I just looked at that past, do you typically do the long lead? Is it two years ahead of the boat construction starting? When do you start that long...?

I think it's about two years before.

Okay. Thank you.

Our next question comes from the line of Doug Harned with Bernstein.

Good morning.

Hi, Doug.

Hi. I wanted to continue in Marine. The other big thing that is coming up is the competition for the TAO205, the LXR and the LHA8. And when you look at that, one would naturally see NASSCO as the choice for the TA205, Ingles is the logical choice for the other two ships. But how do you see NASSCO's position in competing for, particularly the LXR? Can you use the MLP hull form and be an effective competitor in that part of this competition?

Well, we've already submitted our bids and, you know, I'll get myself in a really sticky wicket if I spoke to the Navy about relative competency. But we know how to build the TAOX, no surprise, and we've bid appropriately on that entire solicitation. So I think that's about all that I'm permitted to say. Sorry about that.

Okay.

Ask the Navy. See what they say.

No, I understand.

I ask the Navy, so.

Okay. And what do you see as sort of the timeframe now on how that's going to play out, that decision?

I'm told that it will be sometime this year.

For the...

But I don't have any more clarity whether it's third or fourth quarter.

Okay. Okay. That's great. Thank you.

Thanks.

Our next question comes from the line of David Strauss with UBS.

Thanks. Good morning.

Hi.

A couple of questions on Gulfstream. I think your large cabin delivery guidance for 2016 was 104? Can you tell us what it is now, with some of the push out? Is the plan still to hold Gulfstream EBIT flat beyond 2016? Thanks.

I'm not going to give you the 2017 guidance. What I told you is, we're going to do 2016 at flat EBIT and that looks very, very possible from our perspective. I think we're moving one large cabin airplane from this year to next and a couple of mid cabins.

And Phebe, can you explain the large gap between green large-cabin deliveries in the quarter and completed? I don't think I've ever seen that large of a gap.

Oh, it's all timing, and it is the druthers of the customers on what they want in terms of outfitting them on their airplanes and any special configurations. There's nothing there that's particularly anomalous, simply timing.

All right. Thank you.

Thanks.

Our next question comes from the line of Robert Spingarn with Credit Suisse.

Good morning.

Hi.

Hi. So maybe we'll switch to IS&T for a minute; I wanted to ask you about two things there. Just on this big IDIQ on jitters for the handheld, three of you participating there, competing, so I wanted to ask you how you think about that in terms of orders for the contract, how that might impact IS&T sales and margins going forward? And then separately, this stretch of WIN-T and how that might affect things? Thanks.

Sure. So as it was reported in the press, we were down selected along with two others for what is essentially a 12.7 billion, five-year hunting license, and it- the way we're thinking about it in the moment is we deliver the next generation radio hardware in this quarter for evaluation and then full wave production follows that, conceivable this quarter and next. One thing that I think is interesting to note, is we've got the only radio that's a proven MUOS capable terminal. So that ought to, from another perspective, be a by the competitive advantage. You know, it's, with these IDIQ programs, you've got to sort of handicap what you see as your win rate. We typically have been very successful in our win rates, but again, it will be highly competitive and we're just going to have to work our way through it. This is a mission systems, where this resides is a high-operating leverage business, so I would expect them to perform nicely on those IDIQ contracts that they win. WIN-T is, you know, WIN-T has slipped more than a skater on the ice. We're in increment two; it's in full rate production. It's going to be fielded to the next, I think, to an active brigade combat team and National Guard units over the next eight, nine years. And it is already in the field and successfully supporting down range missions. So from a financial perspective, it's performing very nicely. It's sort of up to our customer on what the pace of deployments will be, but heretofore we've managed, because of our intimacy with the customer, we've managed to accommodate their desires nicely, and I would expect that to continue.

So, Phebe, net-net, it sounds like the jitters is a positive relative to what you're thinking might have been when you initially provided 2016 guidance, and therefore, is it fair to assume that you'll bake that in with when we hear from you next on this?

Yeah. If, in fact, they start to issue the IDIQ purchase orders within this year. So that's part of what I don't know, right?

Right. So it could be a 2017 thing?

It could be. But I don't know. So...

Okay. Thank you.

Okay.

Our next question comes from the line of Carter Copeland with Barclays.

Hey, good morning, Phebe, Jason. Phebe, I wondered if you could talk to the booking strength in IS&T and maybe even the margin strange in IS&T, sort of the difference between IT and Mission, give us some color on that, and maybe where some of that strength is coming from?

So let's talk about this in two parts. Our Mission system is still benefiting from the cost synergies we achieved by combining two of our businesses. They're also - and by the way, that's why I was interested in that combination. But the business unit guys were saying and oh, by the way, in addition to cost savings, we're going to see some marketing synergies. And I said, yeah, good, great. Well, it turns out they were right. So they have won more than their fair share, and that's reflected in no small measure in that $1.3 book-to-bill. And their performance, operating performance is really terrific. Now, this margin rate in the moment is a bit high going-forward. And while I'm not ready to update guidance, this group should be a double-digit earner in the near future. We've got additional opportunities for margin improvement in efficiencies and performance, and it - the margin performance in this group on the Mission Systems side is heavily driven by the product mix. On the IT side, again, this is a very competitive business, with terrific cash flow, and as I always like to tell everybody, great return on invested capital. They are very disciplined when they go into the market, and they win their fair share. And I say disciplined, we're careful that he we don't, you know, pursue contracts down rat holes where we don't think we can get a decent return.

And in terms of their pipeline, do you expect to continue to see win rates like this? And you know, obviously the market is, as you stated, pretty competitive, but clearly you've seen this trend for a while now.

So, you know, it is very difficult to project win rates in such a short cycle business. I've been pleased with how they've done. They can - they've got more performance opportunity, cost cutting opportunity, as they would quarter in, quarter out, and so, you know, a combination of performance and cost efficiency, dedication to schedule adherence to schedule, schedule is not a guideline, right? Those are the things that make you win, and these businesses are firing on all cylinders, so I'm pretty place pleased.

Great. Thanks for the color, Phebe.

Our next question comes from the line of Howard Rubel with Jeffries.

Hey, Howard.

Good morning, Phebe. Thank you. To go to Combat Systems for a moment, I mean, you know, it's always lumpy when we see ads to the backlog, but keeping it stable at this point seems pretty good, given the large contracts you're working on. Could you address what you're seeing in terms of incremental interest internationally?

So as you and I have talked about on this call before, the world remains a dangerous place, and that Russian fair is roaring. So we've got considerable interests in interest in places that you might think. Just to give you a little bit of color on some of the contracts that we have just put into backlog, the Swiss Army is purchasing 4.4 combat vehicles, and that went in I think this quarter for about $400 million, U.S. dollars. So that was good. The Czech Republic is on the map, as is the Spanish 8 by 8 technology program, and our land systems is in good position on that - on that program. And then we continue to see demand signals coming out of the Mid East. Iraqi tanks, Kuwait and in other parts of the Mid East where there's some really hot wars going on. So you know the pipeline looks good internationally. And if you look at the Army budget, they're beginning to recapitalize, so that's pretty wholesome in and of itself. So, again, as in the IS&T case, our ability to perform with contract, keep our costs down will be the key to, again, winning more of our fair share. And oh, by the way, our armaments business is doing quite nicely as well.

That doesn't surprise me. Just sort of a little bit related to profitability, just to go to Marine for a second, the numbers were really good, could you address in some way how you were doing on Zumwalt and some of the other programs, just in terms of capability. Because, I mean, they seem to be surprising a little bit on the bottom line?

So let me give you some clarity on this program. Operationally, the ship is performing quite nicely; it's been out on two sea trials and we like what we see and, more importantly, our customer seems to. But let me remind everybody of a couple of things. First, we are not the integrator of prime on this ship, the Navy is. So I really don't have any insight into the program beyond our shipyard. I think that's the first thing to consider. The second thing is our share of the $22.4 billion program is less than about a quarter. So, again, that gives you some perspective. The Navy reported some cost growth to the Congress over the last 12 months and I don't have visibility into that number. I do know, what I do know, is that that VAS has experienced some cost growth primarily on the first of cost ship, which is the cost plus help. But that's not a surprise given the complexity of this ship. And we continue to work close closely with the Navy to ensure that, you know, we're delivering the ships that they want and that they need operationally and that, you know, we minimize or reduce risk, manage the risk from the second two ships. The 51 programs are running in tandem with 1000 and we've seen some impacts, as we started up a co-line, the 51s. And by the way, this flight of 51s is materially different and upgraded than the former flight. So we're confident that we can work through these, and we know these ships. So, again, we're working with the Navy on scheduling costs so that we can ensure we get them what they need with profitability that we require.

Thank you very much, Phebe. Thank you.

Our next question comes from the line of Seth Seifman with J.P. Morgan.

Thanks very much, and good morning

Good Morning.

I'll ask the capital deployment question this morning and basically, obviously there's not really anything to quarrel with in a billion dollars of share repurchased in the quarter, but it's not the first time that you've bought back a billion dollars, and you know, given sort of the underlying objective of the repurchase program to be opportunistic, obviously you've had some opportunities in the first quarter, how do we think about share repurchases going forward and, you know, would you characterize what you did in the quarter as opportunistic?

Yeah. I mean, we believe that the stock was undervalued, so we went in and bought and we'll continue to do that in instances where we think the market has mispriced our stock. That's our view, and we've been consistent about that strategy. So I think that's not a particularly big change.

Right. And any color about the level of repurchases going forward?

Well, because we're opportunistic, you know, I'm going to have to see, you know, we understand in the absence of M&A, it's, and given the investments that is we're making in our gross businesses, I think it's a reasonable, shareholder friendly action to take, and, frankly, you know, never forget, it's all about the shareholders.

Yep. Absolutely. Thank you.

Our next question comes from the line of Myles Walton with Deutsche Bank.

Thanks. Good morning.

Good morning.

Can I ask a question on cash flow? And I know last year 1Q is a tougher comp and most of the advanced burn was in the second half of last year, but the improvement in conversion from herein out through the rest of the year, should we expect that to kind of pick up the pace and do you think conversion will actually be better than last year before you get to full conversion in 2017? You know, I think the way we think about that, and I think we signaled this before is that, you know, we the expect the free cash flow profile this year to look similar to last year. As you mentioned, it was a particularly tough comp from the first quarter of last year, which far outstripped our expectations and outstripped really a typical Q1 profile. The first quarter is usually a slightly softer cash performance and frankly, sometimes in the past it has even been negative. So on balance, I think you look at the year as similar to last year. It will fluctuate a little bit on the timing of some of the remaining progress payments and outflows on the international programs.

Okay. And then, Phebe thinks for the color on the 650. But I'm curious, is there a level where you think the pre-owned stock becomes more of an obstacle to you selling aircraft or pricing, or maintaining the price?

Well, let me be clear. We're not going to drop the 650 price, or the 450, 550, based on the use. We don't compete that way. But let's talk about that used market. And it's not a homogeneous market. It's highly differentiated by model types. So let's think about it in two respects. You've got the 450, 550 used market that is mature, it's established, it has demonstrated factors that influence its behavior, and we have watched it now for well over a decade. The 650 is an immature developing market. So let me parse, if it would help a little bit, let me walk through both of those markets. So with respect to the 450, 550, we did lose some G550's to the used inventory because there were a lot of them, the late models, that were available, and there still are to some degree. But this is an active market, it's a very active market, and so it has pretty good throughput. I think in the last 12 months we sold - the market sold 29 used G550's. So this is a market with predictable and understandable transition rates and activity rates. And conversions. I hear less about the 450's used market, but I think the 450 is attractively priced. The bigger problem for those models, frankly, is that some customers are waiting for the G500 and G600. Now, the same has not been true to this point for the G650. I'm not aware of losing a single G650 new airplane ordered to a used airplane. I would also comment that, as I noted before, this pre-owned market is developing, it's a developing market. For example, it's not clear how many dedicated sellers we have. Some folks have been there in there for three years and not lowered the price. And there's not been a transaction there for some time. The early 650's, the early models, N numbers that were available to sellers or are available, are attractive at favorable prices, above the original sale price. Those were earlier on, but, you know, we've got to see how that market develops. By the way, we're very happy to help buyers in the used markets get into our airplanes. But one of these days, the market will be determined. But so far, it's just too speculative to observe outcomes.

Okay. So you're comfortable with continuing to grow and pricing won't enter the discussion, but you're sold out for the next 24 months. So that's kind of the landscape as we see it right now?

Very wholesome.

Okay. Thanks.

And Liz, I think we have time for one more question.

Our last question comes from the line of Hunter Keay with Wolf Research.

Hi. Thanks for getting me on. I appreciate it.

Good morning.

Good morning. So Phebe, you talked about the difference in time between green deliveries and completions, and as it relates to customer preference. I'm wondering if that sort of implies maybe you shift away from fleet sales and more to sort of individual purposes. And maybe I'm just reading too much into it? And can you confirm that one way or the other? And can you also talk about, generally, how you think about margins versus fleet sales to the individual one off purchases? Thanks very much.

Okay. So I wouldn't read too much into the timing difference between green deliveries and completed. I mean, there's really nothing there. With respect to fleet and - and individual, let's talk about fleet. You know, fleet can be a fair number of aircraft going into a Corporation to replenish their, and refresh their active fleet. There's another series of fleet buyers that are fractional. We have very little exposure to fractional markets. And then there's another set of fleet buyers that buy for the Airlines. So that's a little bit different as well. And, again, we don't have too many of those. We are very careful on our pricing, very careful. So don't think about those as materially different. Obviously you get some volume discounts. But we have a pretty strict pricing discipline. Okay?

Got it. Thanks a lot for the time.

Great.

Thank you for joining our call today. If you have additional questions, I can be reached at (703) 876-3583. Thanks, and have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program, and you may now disconnect. Everyone, have a great day.