Good day and welcome everyone to the Lockheed Martin Fourth Quarter and Full Year 2013 Earnings Results Conference Call. Today’s call is being recorded. At this time, for opening remarks and introductions, I’d like to turn the call over to Mr. Jerry Kircher, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Shannon and good afternoon, everyone. I’d like to welcome you to our fourth quarter 2013 earnings conference call. Joining me today on the call are Marillyn Hewson, our Chief Executive Officer and President; and Bruce Tanner, our Executive Vice President and Chief Financial Officer. Statements made in today's call 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. Please see today’s press release and our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results. We have posted charts on our website today that we plan to address during the call to supplement our comments. Please access our website at www.lockheedmartin.com and click on the Investor Relations link to view and follow the charts. With that, I'd like to turn the call over to Marillyn.

Thanks, Jerry. Good afternoon, everyone, and thank you for joining us on the call today. All of us here hope that your year is off to a good start. Let me begin by saying that I’m extraordinarily proud of our Lockheed Martin team. We continue to maintain focus and achieve strong program of financial performance and a challenging environment. These efforts enable the corporation to generate exceptional operational and financial results in 2013 and have us well positioned for 2014. Bruce will cover the financial results in detail over later; I want to highlight a few noteworthy 2013 financial achievements from my perspective. Starting with new business. I was particularly pleased with our continued success in securing new order bookings from both domestic and international customers. These new contract awards enabled our year-end 2013 backlog to grow to a record level of almost $83 billion. Even more impressively 2013 marks a fourth consecutive year we’ve grown our backlog in a very challenging and competitive environment. I was also pleased that the international components of our backlog grew to approximately $20 billion, representing almost 25% of our total backlog. This has us well positioned to achieve our stated goal of expanding international revenues to over 20% of total corporate revenues in the next few years. This backlog expansion is aided by two strategic differentiators. First, we continue to believe our portfolio is the best positioned in the sector, with unique and direct alignment to many of the essential programs identified by both domestic and international customers. Second, our corporate wide focus on fostering and expanding customer relationships, directed at how we may best support their critical needs, continue to play a pivotal role in securing our new business awards for our innovated and cost effective products. Our strong and growing backlog…

Thank you, Marillyn. Good afternoon, everyone. As usual, we've included web charts with our earnings release today that I'll be referencing as I go through my remarks. Let's start with Chart 3 and an overview of last year's results. Sales for the year were $45.4 billion, a little higher than we had expected, benefiting from a stronger than planned fourth quarter. Segment operating margin was a record level of 12.7%, exceeding last year's record level by 90 basis points. Our earnings per share from continuing operations of $9.04 exceeded $9 for the first time and included the effects of two special charges in the fourth quarter, which I'll discuss in more detail in a few charts. Cash from operations was also stronger than we had out-looked, helped by collections late in 2013 that had been expected in 2014. This enabled us to generate $4.5 billion for the year while contributing an additional $750 million in the fourth quarter to our pension plans, bringing the total amount of contributions for the year to $2.25 billion. Finally, we ended the year with a strong quarter for orders increasing our backlog to $82.6 billion, the highest level in our history. So I'm pleased with a very strong year of operational performance. Chart 4 compares our sales and segment operating profit in 2013 versus 2012. Sales were 4% lower than last year, but were slightly higher than we had guided in the third quarter. Segment operating profit on the other hand was 3% higher than last year, despite the lower sales level and was higher than the top of the guidance we provided in the third quarter, driven by stronger performance at Missiles and Fire Control. Chart 5 shows our segment operating margins by each of the five business areas compared with last year's…

(Operator Instructions) Our first question is from Doug Harned of Sanford Bernstein. You may begin. Doug Harned – Sanford C. Bernstein & Co. LLC: Thank you, good afternoon.

Hi, Doug.

Hello. Doug Harned – Sanford C. Bernstein & Co. LLC: I’m interested in your discussion of the international orders and if you could give a description of what the regional mix of your bookings has been in 2013? And then in particular there’s been a lot of strong rhetoric coming out of the Middle East and some has been critical of U.S. policies in the region. I’m interested in understanding, are you seeing a slowing in the completion of contracts there; certainly there’s been approvals for a lot of potential sales to that region, but it appears you haven't really seen the commensurate amount of orders, and I’d say across the industry. So perhaps you could comment on that.

Yes, Doug, I’ll take the first part, and I think Marillyn is probably better for the second half of the equation. So, I’m trying to think like off the top of my head I’m not sure I’ve got the numbers committed to memory frankly for what it is by region. So I’ll give kind of a broad brush answer there. I would say, I did take a look at this. I think 2013 we had the highest order of concept for international activity we had in the history of the corporation. And as Marillyn said in her opening remarks, I think our backlog right now in terms of international versus domestic is somewhere between 23% to 25% of our total backlog. So, one of the reasons we’ve tried to tee up the notion that we could grow our international sales from 17% to 20% is because we expected to see that backlog materialize in the form of those orders are they were received and we’ll start to see. We ended the year 2013 with 17% of our sales internationally, you’ll see that number grow is our expectation in 2014. Probably not quite to the 20%, but a little bit below that is our expectation. If I was to give sort of the regional split in 2014; yeah, I think it's heavily weighted towards Asia and the Middle East Doug, although I don’t have the splits there. I know we’ve got a number of orders that took place in our airlines business including some C-130 for Saudi Arabia. We had a couple of 18 aircrafts for Iraq for F-16. So, while I don’t have again the numbers committed to memory, I am pretty certain Doug it would be heavily weighted towards Asia and the Middle East.

Doug, I’ll add on to that about your question relative to U.S. policies and if that’s pulling down the completion of contracts and how it's affecting our ability in sales around the world. Over the past year, I mean I’ve literally flown around the world to a lot of different locations and spent a lot of time meeting with customers and listening to them. And frankly what they’re looking for is for our help. They face a lot of serious challenges relative to their national security and they also have a lot of citizen services that they need to conduct and, so they are talking to us about specific areas of concern and things that we can help them with. So, I don’t see an impact of U.S. policies on the dialogue that I’m having with them from the standpoint of our portfolio and what we can provide to them. And our priority for me and for the leadership team is that we get out and we listen and we meet with them and we understand what it is that they want and need. And frankly we’re very confident that we’re well positioned from growth because of the items that Bruce talked about, but just in general our portfolio, the Tactical Aircraft that we have, the Airlift Mobility Aircraft, our Integrated Air Missile Defense, IT, Cyber Security, Space Situational Awareness, I mean I could walk you around on portfolio. These are the types of things that they need in their countries.

Thank you. Our next question is from Sam Pearlstein of Wells Fargo. You may begin.

Good afternoon.

Hi, Sam.

Hi.

Bruce, I was wondering if you could talk a little bit more about the cash flow. I know you mentioned receivable collections in the fourth quarter. But, I’m sure trying to look at ’13 to ’14 if you have $600 million more in CAS reimbursement than the contributions, and you’re going to make less contribution in general. Why wouldn’t cash from ops be higher than the $4.6 billion? I’m trying to think about what is actually going against you, whether its taxes, receivables et cetera in ’14 versus ’13?

Yes. No, a very perceptive question, and so I think we had nearly $800 million use of cash if you will for pensions in 2013, and with $1.6 billion in recoveries and $1 billion of contributions we’re looking at about $600 million of positive cash in 2014. So, roughly a $1.4 billion swing, I think that’s at the heart of your question; why isn’t that showing up in terms of cash differential between 2013 and 2014? So, there’s a lot of moving pieces to that question. Recall in the fourth quarter of 2012 we made $2.5 billion pension contribution. The tax benefits of that pension contribution showed up in the first quarter of 2013. In the fourth quarter of 2013 we made $750 million pension contribution, the tax benefits of that show up in the first quarter of 2014, and some of the 600 plus I think million dollar swing from just a taxes paid perspective for just the pension contributions made in ’12 and ’13 that affected tax paid in ’13 and ’14 if you follow that. Secondly we had and if you ever heard about this, we disclosed this in our 10-Q and 10-Ks, we had some withholds associated with the business systems rules for systems like Earned Value Management and some others, and almost all of the withholds associated with those activities were recovered in the year 2013 and those won't be replicated obviously in 2014. We had the LRIP 5 and LRIP 6 contract definitizations for F-35 that occurred in 2013 and brought with it sort of some cash, up cash for the definitization associated with those two contracts that again will not occur in 2014. We had lower joint venture cash or are expecting lower joint venture cash in 2014 than just 2013 in part because of just lower volume but there was also some reimbursement items that the JV contributed to the parents [ph] in '13 that we'll replicate in '14. And finally we got roughly $150 million or so restructured cash that's associated with the severance payments that we're making in 2014 that were higher than obviously mid 2013. So, I know there was a mouthful. There was a lot of moving pieces there, but that's sort of the lion's share, if you will, of why that pension cash swing doesn't translate necessary to even higher cash in 2014.

Thank you. Our next question is from Bill Loomis of Stifel. You may begin.

Hi. Thank you. Just going back to the goodwill write-down in technical services, can you tell us what acquisition in the past that was related to or the type of work? And are you starting – I know you didn't have any goodwill write-downs in other areas, but are these trends impacting any other businesses? And then just a follow-on question on the 30 million charge for lower of costs or market considerations if you can explain that a little more? Thanks.

Sure. Bill, I'll take those as well. So the goodwill – once you start moving some of the businesses associated with the goodwill into different reporting units in the corporation, unfortunately you kind of loose the track of the original business area in terms of where that goodwill resided. And those businesses have been reorganized over the past few years, so it's very difficult to kind of pinpoint sort of the original origin of the goodwill itself. The type of businesses that this was acquired for are services businesses, as the name implies, technical services. Think of that as a lot of in-country support of the troops, so aircraft maintenance, actually some aircraft piloting vehicle maintenance, that sort of thing, mostly Army in nature. I think about three-quarters of this business or so is probably U.S. Army base and as we've seen the reductions in troop drawdown in particular in Iraq and most recently in Afghanistan that the revenue volume of this business has dropped off fairly dramatically. And again that's sort of what our expectations are going forward as well. So let's see, I think the other question was on the – well, I should back up. You asked the question about how does this translate – my words now, how does this translate to other businesses? As I said in the prepared remarks we do, do an annual impairment assessment at the end of every year. And the types of contracts that are in tech services, some of those types of contracts are in other parts the business. I think as we sit here today, as I said in my remarks, we have clearance right now and we're not at this time concerned about another or being at risk of a goodwill impairment going forward and that's with the plans and expectations that we have in the long range planning that we put together here today. So, if that turns out to be different we'll revisit that next year. And finally the $30 million as far as the cost to market, we took a look at some inventory that we had on some of our contracts and just assessed that it's being worked – not worked as much as we had anticipated in some of our training and logistics businesses, and I think that's a little bit reflected of just the way the market is playing out for us right now.

Thank you. Our next question is from Jason Gursky of Citi. You may begin.

Good afternoon.

Hi, Jason.

Just a quick clarification from you, Bruce, on the cash. I was wondering – you went through all the puts and take, I was wondering if you could just briefly talk about potential opportunities that you see would lead to upside in cash? And then, Marillyn, the rest of the question for me is on the portfolio and whether you feel that you've got the right mix of portfolio companies and businesses than what your view is on portfolio shaping given the current demand environment as you see it over the next couple of years?

So, Jason, I'm assuming you're asking upsize for cash in 2014 versus say over time. I think we have probably typical planning convention. The special we do with some of our international contracts, we tend to have assumptions of maybe less advances, less positive cash flows in our planning than perhaps we actually end up negotiating. I hope that's the case again this year. We obviously have some contracts – some fairly large contracts that we hope to de-finitize. I'd like to think we could get some of the billing arrangement with some of those contracts with slightly better terms than we have in our planning. And that's been our history frankly. I think we've been doing that and sort of improving our cash flow throughout the year. I think the whole organization from sort of the business side to the program management side, all has that as an objective and that's something that we strive for very hard. So while not obviously embedded in the numbers, I think that's something that we look at very earnestly at every opportunity to improve the cash terms we have going forward, and I assure you we'll do that throughout the rest of the year and we'll keep you apprised of our progress for the next three quarters.

Let me just speak to portfolio, Jason. Your question around we have the right mix and what are we looking at over the next few years, I would say if we just look at how we've built the backlog over the last 40 years, that demonstrates the strength of our portfolio in recent years. And as you look at the situation with the domestic budget, with the U.S. budget and our portfolio and the ability for our customers now to be able to focus on their priorities, I think we're well aligned. I'm very happy with our portfolio. It looks like it will be well supported in the budget and we know that we have strong demand internationally for our missile defense, for tactical aircraft, air mobility, the whole range of our primary platforms that we offer. Even we're looking at opportunities for the Littoral Combat Ship variant and as well as the range of services businesses within IT and cyber security and the communication series. So I'm very happy with the portfolio. I think we're in very good shape for the next few years and we'll continue as we always do to assess it and adjust it as we need to. But at this point, I think it looks very good.

Thank you. Our next question comes from Rich Safran of Buckingham Research. You may begin.

Thanks. Good afternoon.

Good afternoon.

I wanted to ask the capital deployment question. Look, at one point I think you were looking at possible mix shift, maybe between dividends and share buybacks. For 2014, are you still remaining committed to the dividend increases? Any thought here on consideration on M&A? Just looking for any update on how you're thinking and what is – really what I'm interested in here?

Thanks, Rich. I'm not quite ready obviously to declare a dividend increase. We meet as a matter of course every September with the Board of Directors, so that's when we discuss potential dividend increases and that will be the pattern we do this year. So we've been – obviously it's pretty heavy on the dividend increase capacity here. I'd like to think that we have the fire power to kind of continue to do that going forward. When you look at the cash flow that we generated last year and the cash flow this year, that our expectations of recovery of pension contributions in particular in addition to the normal operating cash flow in years to come, I think that gives us the opportunity at least to do that. So we gave guidance and/or embedded in our guidance this year was a little over $1 billion, more than $1 billion of share repurchases. That's just to offset dilution of share count. And you should think of that – I may get these numbers slightly wrong but I know I'm pretty close here, so we've got roughly 9 million to 10 million of shares outstanding at the end of – I should say options outstanding at the end of 2013. We had roughly 10 million options exercised in the year 2013. We kind of assumed a lower level than that in 2014. Think about maybe half of that or little less. And combined with, I will say, normal matching in our 401(k) which we do through share count matching and our executive compensation is probably another 3 million shares or so. So it's probably about 8 million. I may have the numbers slightly wrong, but I think I’m pretty close. 8 million shares, $150 million bucks a share, it’s probably about $1.2 billion or so of share repurchases. We will offset any share count dilution that’s caused by any additional options that are exercised above that level and then as I said in my opening remarks we will try to be opportunistic throughout the year for additional share repurchases beyond that. On the M&A side, we’re constantly looking at that. We don’t -- obviously we’re not going to comment on anything until we’ve actually close on a deal, but that’s always a possibility. I think we’ve been successful with the strategy we have used in the past. I don’t see any state of body [ph] lists that would change that strategy going forward and that’s probably about as much as I can say on that right now Rich.

Thank you. Our next question comes from Ron Epstein of Bank of America Merrill Lynch. You may begin.

Yes. Hey, good afternoon.

Hi, Ronald.

Good afternoon.

Bruce, just wanted to try to better understand the estimates at completion, the EAC whatever you want to call it, balance that you guys get, right. So just kind of looking historically, last year it was almost half of your EBIT. And when I look at your peer companies, General Dynamics, Raytheon, Northrop, how sustainable is that? How do we think about the EACs over time? And just if you can give us some more color on that -- I mean, I guess what I worry about is if that gap were to start to close, what’s that mean? Why is it so high now, that kind of thing?

Yes. Well, thanks Ron, good question. So I think if you look at our historical -- first off let me comment, I think you’re higher at the level of profit adjustments as a percentage of the total earnings than what we really experienced. So last year I just looked at this not too longer, we were around 36% or so, I believe the total earnings of segment EBIT. Excuse me, not total earnings, but segment EBIT was in the form of the profit adjustments. That’s not sort of out of family with what we experienced on sort of a steady-state basis. I mean if I look -- as I look forward to the planned level of 2014 adjustments, it’s not far off of that number. I will tell you almost every year when we have a good year, obviously that number grows from our initial plan and I sure hope the best what happens this year as well. So I don’t know exactly how to compare us with everyone else Ron. I suspect we have different sort of philosophies as far as starting positions, on booking profit, on contracts. Everyone has got a different lifecycle in their own portfolio as far as whether they’re way down the learning curve and have any new development or concurrent development going on with production that would suggest maybe starting a little lighter booking rate. Some folks are further down selling only international activities where you’re at a pretty good idea what’s your products costs by that point of time, you can probably start up booking at a higher profit level, which would make you have lower step-ups, lower profit adjustments. I think ours is more comparable to us as opposed to anyone else and I don’t see an issue at the levels we’re talking about for that diminishing going forward.

Thank you. Our next question is from Peter Arment of Sterne, Agee. You may begin. Peter Arment - Sterne, Agee & Leach, Inc.: Yes. Good afternoon Marillyn and Bruce.

Hi Peter. Peter Arment - Sterne, Agee & Leach, Inc.: Bruce, could you give us an update on kind of the skyline of how the F-16 and the C-130 are looking? Looking out, obviously you mentioned the C-130 in terms of domestic order potentially coming, but what else does it look like? You’ve got two very mature platforms here that seem to be trending down in volumes and affecting the mix shift here in margins?

Yes. Good question, Peter. So actually I think calendar year 2014 we’re actually going to see an increase in the deliveries of F-16s compared to what we delivered last year. So in 2013, we delivered 13 F-16s. I would expect that we will be north of 15, maybe 16, 17 aircraft delivery in the year. Our C-130 program, and I should say those deliveries will probably go back, I think of it probably in the one per month level for a couple of years. But I think our backlog on the F-16 program today is through 2000 -- I’m trying to do this from memory of course, 16, 17, somewhere in that range. I will get that covered before the call, before we are off from the call. The C-130 deliveries, we did 25 last year. We kind of said that the rate will be building with C-130s going forward is 24 a month. I’m real confident, particularly when you talk about the addition of multi-year aircraft at the levels we talked about. Again, 79 aircraft is what the -- just the U.S buy is on that multi-year program. And that’s going to enable us to continue with that 24 aircraft per year level for quite a while. And I just remembered that I think the F-16 deliveries right now go up to almost the end of 2017. So -- and again you should think of that there is probably one aircraft per month for the F-16 and roughly two aircraft a month for the C-130 for sort of that period through that timeframe.

Thank you. Our next question is from Joe Nadol of JPMorgan. You may begin.

Thanks. Good afternoon.

Yes.

Marillyn, congratulations on a good -- a very solid first year. My question is to you. I was wondering if you could maybe give your impressions on maybe a couple of things you learned about the company that maybe you didn’t know a year-ago or your impressions after your first year? And then perhaps more importantly going into your second year what are a couple of goals that you have that are specific to 2014 for Lockheed Martin that, more specific than just meeting our financial goals and that sort of thing. What do you really want to get done this year?

Well, thanks for the compliment there Joe. I mean, that’s a team sport in this company. So great credit goes to the entire team for what I would consider exceptional performance for the year. It has been a very strong year. And I think what we did in the past year has really positioned ourselves for continued success and a lot of work that the team has done or has been very proactive in strengthening our core business and our international business. We have rolled out what we call Lockheed Martin International, which is a leadership focus and resource focus at the enterprise level to grow our international business. We already do a lot of business internationally in over 70 countries, but we want to put a concerted focus on that from an enterprise view and bring the full depth and breadth and strength of our portfolio to the international marketplace. So that is something we initiated in the middle of ’13 and that will be one of the imperatives that we will be focused on as we move forward in 2014 and beyond. Another thing that we initiated in a great way, we’ve been on this path, but we took it to another level with our proactive steps and streamlining our operations and improving our cost structure. And as Bruce went through, we announced several things in the fourth quarter. We’ve been on that path, but we took it to another level of looking at our capacity utilization relative to what we see as our workload and making sure that we remain competitive and have that competitive position as we continue to grow in the future. And then the third element that we’ve been focusing inside and outside the corporation on is our view of being a technology leader…

Thank you. Our next question is from Carter Copeland of Barclays. You may begin.

Hi. Good afternoon and good quarter.

Thank you.

Marillyn, I want to ask about something sort of bigger picture. I think you've mentioned now the quality of the portfolio, I think you mentioned a couple of times in your prepared remarks and in your response to several of the questions so far. Just seeing the pickup on that as sort of a theme and I wondered if you might elaborate on that and specifically and how you think the performance differentials between you and your peers might actually play out over the coming years and how you think about balancing that fine line between what has been a pretty cost focused and affordability focused strategy to perhaps one that's more revenue focused and perhaps technology focused as you just mentioned? Is there a – am I catching a sort of shift in how you're thinking about running the business relative to maybe the way your competitors are thinking? Anything to elaborate there would be helpful.

Sure. Thanks for the questions. I don't think you should sense a major shift in our strategy. We have a strategy that we've been working on relative to our core business. It's just where we are going to market as we look at what's happening in the domestic business and budget; it's going to be flat for the next couple of years. So we recognize in order for us to maintain and hopefully grow our businesses to align with where our customers are, have the budgets and have the needs for our products which is in the pivot to Asia as well as in the Middle East. So a lot of things that we offer in those regions is because that's where the demand is and actually that's where U.S. government services are focusing, and that's a good integration where we can bring our products and capabilities. Relative to the portfolio, I mean I think if you just step back and look at – let's begin with the Joint Strike Fighter, the F-35, that's a very significant element of our portfolio. It is one that represents 16% of our revenue in 2013 and it's going to continue to grow. We've got the eight international partners. We have security cooperation partners with digital in Japan. We have other countries that are looking at it with South Korea, with Singapore, with others that I think will – that are interested in the Middle East that have expressed their interests. So I still see that as something that is a differentiator for us because no one else has a fifth generation fighter and it's a unique capability that is needed around the world. At the same time, the F-16, as Bruce was talking about the backlog on the F-16, there is still a…

Carter, the only thing I might add as I'm listening to Marillyn there is I think we've got a really interesting sort of situation where the products that we are developing are not – and that we anticipate the ability to sell in production and particularly to sell internationally are not long-tenured products. We've got capabilities. We have some of those as well, obviously with C-130 and F-16s, but no one has sort of the current air missile defense products that we have in terms of MEADS, in terms of Littoral Combat Ships from a naval perspective, in terms of an F-35. So we're kind of uniquely positioned that a lot of our products are through the developmental cycle. There will be quite a bit of time before you see new products develop just because there's going to be a delay in new starts with the fiscal pressures that we're facing. And our portfolio is available now and has sort of got the good backing of the U.S. Military behind us. Now I think that's got us very uniquely positioned.

Thank you. Our next question is from Noah Poponak of Goldman Sachs. You may begin. Noah Poponak - Goldman Sachs & Company: Hi. Good afternoon, everybody.

Good afternoon. Noah Poponak - Goldman Sachs & Company: I don't know if this is for Marillyn or Bruce or both, but it feels to me like one of the bigger debates in this space right now is if a company like Lockheed Martin can forecast that revenues will be flat in 2014 despite all of the churn mostly downward in the defense budget, argument one is that that's largely everything you're talking about with the portfolio being differentiated versus the industry. Argument two is that that's almost entirely the lag effect between the decline in authority in 2012 and 2013 and that there is another shoot or drop, if you will, on the top line in 2015 and 2016. And I know you're only starting to talk about '14 today officially, but I thought perhaps now that you have a '14 budget and some discussion of the '15 request, maybe a little more insight into the Pentagon strategy moving forward, if you could shed a little bit more light on which of those you'd think it is?

I'll take the first shot and Marillyn can provide some color commentary on that. But it's an interesting question. I think it's one that we've talked about ourselves internally as well. And sort of the heart of your question I think is so have we bottomed out or not? And you posed two different scenarios there. One is the value of the portfolio and then sort of the lag effect of the budget authority. I do believe as Marillyn has said quite vividly that the portfolio that we have is differentiated, I think that is what's enabled us to survive without having huge drops year-over-year. I think the part that again people are missing when we talk about the effects of sequestration, where we are right now is our portfolio pre-sequestration would have been growing in these periods of times. So we are seeing reductions, but the reductions are taking us back to sort of a flat scenario as opposed to taking us to a negative gross scenario. And I get the point, believe me, that our outlook for 2014 is below '13 and '13 was below '12, but going forward from '14, '15, I think we're going to be – hopefully, we've hit the bottom. If not, I think we're very, very close to that between '14, '15. And if you just take a look at the budget agreement that was signed this past week and a half or whatever that provided the incremental benefits over a full sequestration for fiscal year '14 and '15, that essentially makes the DoD top line kind of flat. And then if you take a look at FY '16, under sequestration today that actually shows a slight increase over the FY '15 levels as we sit here today. So I'm, I'll say cautiously optimistic. We've sort of reached bottom and that we have – at least for Lockheed Martin, we have the opportunity to see some growth in the not too distant future.

I don't have much to add to that. We have looked at it closely. Of course, the DoD budget is something we watch closely and so as we saw the bill get passed and looked at the outlook, I mean, we're basically flat for the next two years within that budget does start to increase. So, when you take that coupled with our strong portfolio and the ability for the DoD to decide where they want to spend their money as opposed to it being an across the board cut, we think we are well positioned and allowing them to make those kinds of decisions through a non-sequestration environment is what, how we're going to hold up well and we will be differentiated. So, I am of the mind that we're -- as Bruce said, we have looked at it a lot, we are at the bottom or near the bottom and we should see an increase in the next few years.

Shannon, this is Jerry. I think we’ve cover up an hour. Maybe one more question, then we’ll turn it back to Marillyn for final thoughts.

Our next question is from Howard Rubel of Jefferies. You may begin. Howard Rubel - Jefferies & Co. Inc.: Thank you very much. Good afternoon. Marillyn, you had a chance probably to go through the '14 budget in a pretty fine detail now, and if you look to your point, you clearly have a lot of important foundation programs that do make Lockheed differentiated. Could you address a little bit where some of the shortfalls are versus what's it like? And also, flat in one sense is good, but the reality is you still have some inflation, so you have to find productivity and other measures to make up for that. So really the question is, sort of where are the holes you have to fill which are probably a couple and then what about more productivity measures beyond what you've done?

Well, first of all I mean, there is strong support for our program as we've looked at it across the entire portfolio and we've looked at every one of our major programs to see how they hold up, and I would say in large measure that we are strongly supported. The F-35 showed some cuts, but it appears that those are primarily in the government fund side. If you look at our multi-year order on Orion, the opportunities we have for multi-year on C-130J and it’s just a matter of getting through that process. I think we are in a good position. In terms of your comments about inflation and continuing to stay after managing our cost, we are absolutely going to do that. This is a team that understands that, this leadership team is well experienced of that and we work it every day and we'll continue to do so. We're not going -- we've been, I think very proactive over the last several years and we've recognized that, that is an ongoing thing to constantly stay abreast of what our cost positions are and streamline our business so that we can continue to be competitive.

But I assure you Howard (audio break) Marillyn is relentless when it comes to her (technical difficulty).

No, we’re not perfect as any business is not perfect. But when we look at the breadth of our business and the ability to bring our very talented workforce to bear with the technologies and opportunities that we have to keep our business relevant, there's no program that's out there, no major one that's sun setting and we look at our production rates there either maintaining or they're growing across our major programs. So, I think I stand by my position. We got a strong portfolio and we're going to weather this flat period and then continue to grow. So let me just wrap up for the call today. I appreciate all the questions from all of you today, and I just want to conclude by saying again that, I believe that our 2013 results mark another year of continued high performance in a challenging environment, and they demonstrate that we continue to be well positioned to provide solutions to our customers and value to our shareholders. If you look at our records backlog of work, our robust cash generation, our solid balance sheet and the exceptional execution of our employees, I'm confident that it's going to continue to propel our corporation forward in 2014 and beyond. And it's really due to the integrity, the performance and the innovation of our workforce that we're going to be able to support our customers in their essential mission. So, thank you again for joining us on the call today. We look forward to speaking with you in our next earnings call in April. Shannon that concludes our call today.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day.