Good day, ladies and gentlemen. And welcome to the Northrop Grumman's Third Quarter 2016 Conference Call. Today's call is being recorded. My name is Robin and I will be your operator today. At this time, all participants are in a listen-only mode. I would now like to turn the call over to your host, Mr. Steve Movius, Treasurer and Vice President, Investor Relations. Mr. Movius, please proceed.

Thanks, Robin, and welcome to Northrop Grumman's third quarter 2016 conference call. Before we start, please understand that matters discussed on today's call constitute forward-looking statements pursuant to Safe Harbor provisions of federal securities laws. Forward-looking statements involve risks and uncertainties which are detailed in today's press release and our SEC filings. These risk factors may cause actual company results to differ materially. Matters discussed on today's call may also include non-GAAP financial measures that are reconciled in the earnings release. On the call today is our Chairman, CEO and President, Wes Bush; and Ken Bedingfield, our CFO. At this time, I'd like to turn the call over to Wes.

Thanks, Steve. Good afternoon, everyone, and thanks for joining us. We had another solid quarter in which all three sectors executed well. Our ongoing focus on performance, portfolio and effective cash deployment continues to drive outstanding results and positions us for profitable growth over the long term. Sales rose 3% this quarter, led by a 9% increase at Aerospace. Segment operating income was higher than last year, driven by sales volume. Our segment operating margin rate declined slightly to 11.9% and is consistent with our guidance for the year and the trend toward a higher proportion of development work. Earnings per share rose 22% to $3.35 and benefited from a favorable tax settlement and lower unallocated corporate expense in the quarter. Excluding those benefits, earnings per share rose 6%. Third quarter cash from operations was more than $700 million, approximately $180 million higher than last year. After capital expenditures of $137 million, free cash flow totaled $601 million. Typically our cash from operations is heavily weighted to the fourth quarter. We expect this year will be consistent with that pattern and we are on track to achieve our free cash flow guidance for the year. Based on this quarter's results and our fourth quarter outlook, we are raising our 2016 sales guidance to a range of $23.9 billion to $24.1 billion versus our prior guidance range of $23.5 billion to $24 billion. We continue to expect our segment operating margin rate will be in the high 11% range with total operating margin rate expectations moving to the mid-to-high 12%. And we now expect 2016 earnings per share will be between $11.55 and $11.75. During the quarter we repurchased 2.2 million shares for approximately $470 million, and year-to-date we have repurchased 5.6 million shares for approximately $1.2 billion at an average…

Thanks, Wes, and good afternoon, everyone. I want to add my thanks to the team. It was another good quarter. I'll briefly review third quarter results and provide some color on the tax settlement, unallocated corporate items, our net pension adjustment, and the outlook for the remainder of the year. Our overall results included higher sales, solid operating income and margin rate, and good cash flow, all of which positions us for a strong finish to the year. Performance was solid across the company. Sales at Aerospace rose 9% over the prior-year quarter and 6% year-to-date. Higher volume for Manned Aircraft and Autonomous Systems drove revenue growth in both periods. For both the quarter and year-to-date, Manned Aircraft reflects higher volume for restricted activities, increases in F-35 deliveries and ramp-up on the E-2D program. During the quarter we delivered 16 F-35 units versus 15 in last year's third quarter, and year-to-date we've delivered 44 units compared to 36 at this point last year. In Autonomous Systems, we continue to see higher volume across a number of programs, including Global Hawk and Triton. Growth in Manned Aircraft and Autonomous Systems is more than offsetting a slight decline in Space volume for both the quarter and year-to-date. Lower Space volume continues to be driven by reduced activity on non-restricted programs like AEHF and the James Webb Space Telescope. Aerospace third quarter operating income increased 4%, largely due to higher volume. Margin rate contracted 50 basis points to 11.2% due to the changing contract mix in Manned Aircraft partially offset by improved performance in Autonomous Systems. Year-to-date, Aerospace operating margin is 11.4%. We now expect Aerospace sales will be in the mid-$10 billion range versus our prior guidance of low-$10 billion. With this higher volume and the change in mix, we are refining…

Thanks, Ken. As we open up the call for Q&A, we ask each participant to ask a single question. Robin, over to you.

Your first question comes from the line of Ron Epstein, Bank of America Merrill Lynch.

Hey, yeah, good afternoon, guys. Just maybe a quick question, if we can circle back on some of the upcoming programs. So we were expecting to see, what, a T-X RFP final one come out sometime in December. If you could talk about that a little bit, and then maybe some other things you see on the horizon as potential opportunities for the company?

Yeah, great. It is an interesting time, in that it's clear that there is a significant recapitalization wave that's underway across a number of our customer communities. And quite frankly, it's one that's been deferred for quite a long time. And so they're facing the need to address a number of, not only recapitalization of older existing assets, the trainer program is an example of that, but also the need to address what's going on around the globe in terms of the emergence of more aggressive threat profiles. And so there is a view to the future of new capabilities. I went through a little bit of that list in some of my prepared remarks, but let me just touch on some of the ones that have a lot of focus from us. T-X is obviously a very interesting one, recapitalization of a significant fleet of aircraft for training. There are a number of competitors in this competition. And as you indicated, the Air Force is working on its sort of final round to come out with the RFP later this year. So we expect this to be quite an interesting competition and one that we're looking forward to participating in. If you kind of look across the landscape of other things, the recapitalization of the nuclear force infrastructure for the country is underway. Clearly the bomber program is an important activity there. But another one that we're quite interested in is the Ground-Based Strategic Deterrent program, GBSD, that I mentioned in my remarks. This too is another imperative for the country given the amount of time that it's been since we've really invested in our ICBM fleet, and it's an area of strong expertise and knowledge base in our company, so we see that as a really good opportunity.…

Super. And just kind of one follow-on, if I may.

Yes.

The momentum that we're seeing in these programs, is this just a push to modernize or is this a pull from what we're seeing in the outside world, if you know what I mean? And so I guess I am trying to drive at, I mean, how politically palatable is all this going to be as we go through the next couple of years?

Ron, I think if you look back over the history of defense spending, it is largely driven by the world around us, the threat that we face, the issues associated with the actions of others around the globe. And it's pretty clear to me, if you look broadly across the classes of the threat profile that range all the way from near-peer competitors to the world of cyber, it's clear to me that we're seeing a growing support, and I would say this is across both sides of the aisle, a growing support for the need for the nation to really reinvest in its defense capabilities. And I would say that's the primary driver of what we're seeing is just a recognition that for our own security and the security of our allies we need to be making these investments.

Great. Thank you very much.

Thanks, Ron.

Your next question comes from the line of Doug Harned from Bernstein. Douglas Stuart Harned - Sanford C. Bernstein & Co. LLC: Yes. Thank you. I wanted to go to the F-35. You said that you've got LRIP-9 and LRIP-10 done. I wanted to understand, I am assuming that those are all priced. Lockheed Martin obviously is still negotiating with its customer. And so could you talk about how the dynamic works with your funding on those? And then also one of the things that Lockheed talked about was the higher sustainment revenues they're getting. Are you seeing anything, any portion of that yourselves in the near term?

All right. Doug, this is Wes, let me start and then Ken may have some things to add on that. On F-35, we have completed our negotiations on lots 9 and 10 with Lockheed, which is typical for a prime contractor to want to lock down its supply chain as it finishes off its negotiations with a customer. I would say across the board we've all seen the pace on negotiations on the LRIPs for F-35 to take a lot longer than anyone would hope. So it's clear there is opportunities here for process improvement as we go forward. But I'm sure both – that Lockheed and the JPO would point out these are huge complex programs. And so there is inherently – that degree of complexity inherently drives a little bit longer cycle time. So I think it's a matter of working our way through it collectively. But in terms of just looking at the Northrop Grumman position on this, today we have definitized with Lockheed Martin on lots 9 and 10. So we're continuing to support them obviously and the work that they're doing with the customer. It's a good team across the board with Lockheed as the prime, and we and BAE Systems are very focused on supporting them in all that they're doing. On the sustainment side, sustainment is naturally an increasing area of emphasis as we're getting jets out there and deployed. I mentioned in my remarks that the Air Force has declared IOC for the jets. So when we're helping to support an operational fleet, our experience has been that sustainment begins to tick up over time. We've been supporting sustainment already. It's typically embedded in the production contracts in terms of the spares and repairs part of the business. And as the deployment…

Well, clearly our customer has to set its priorities. And as we think about that set of priorities and how our work lines up with them, I see a continuing shift in the priority space to reestablishing the, if you think of it in a broad sense, reestablishing in real terms the integrity of our defense infrastructure. Today we've got a very aged infrastructure, whether we're talking about our fleet of ships, the aircraft that we have in inventory for the Air Force, and in many respects it's a product of the priorities over the last number of years where we have intentionally had to focus a bit more on operations. As we've been engaged in a number of places around the globe, first and foremost, we'll always be supporting those in uniform who are deployed and who the nation is asking to go stand in harm's way. But as we think about what we need to be doing here over the next few years, we see the priorities moving in the direction of realigning the investments against the core elements that do assure our ability to defend the country and the ability to defend our allies around the globe as we see the threat moving more towards the high end of things. So I think you've heard a lot about that coming out of the Pentagon, the need to think and act a bit more aggressively around our defense infrastructure. And so that's how we're seeing this prioritization play into what you pointed out, Doug, which is very real, which is a challenging budget environment. And I think we all expect that we'll see some challenge in the budget environment for a number of years until we can get GDP growth moving in the direction it needs to go. Douglas Stuart Harned - Sanford C. Bernstein & Co. LLC: Okay, great. Thank you.

Thank you, Doug.

Your next question come from the line of Myles Walton, Deutsche Bank.

Thanks. Good afternoon.

Hey, Myles.

This might be one for Ken, I don't know. So cash conversion, Ken, as you look at the trajectory over the couple of years, how quickly can you improve the conversion, when do you get to 100%? And then, as you have two offsetting features, hopefully CapEx coming down and your pension contribution is going up, through cycle through the next few years, is 100% a reasonable target to be shooting at? Thanks.

Sure. And thanks for the question. I'll maybe start just by talking a little bit about the process that we work through, and I'll say that we're very much focused on managing our receivables, our net working capital. We have seen a few things that have been impacting our working capital in the last year to year and a half, burn down of advances. We've talked a little bit about contract negotiation delays. And I think you're also familiar with the impact of the DFAR clause in terms of limitation on performance-based payments. And we've seen that have a little bit of an impact as well. But we expect we're working our way through that. We were able to get, as Wes mentioned, on contract for lots 9 and 10 for F-35. That helped significantly in terms of cash conversions. And then in terms of the pension, you mentioned funding, I think you meant CAS. We do expect to see a pretty consistent CAS tailwind helping us kind of offsetting the capital expenditures that we're working on right now in terms of investing towards the future opportunities that we see. And from a funding perspective, we look at that as something that's going to be not as consequential as the recovery is on the pension side. So I think to your point, we would expect that that's a reasonable expectation as we look out over the longer term that we should be strong generators of cash. And as we grow the business we'll expect that to kind of flow through to the bottom line and flow through to the cash from operations and ultimately free cash flow.

And Myles, I would just add one thing. I went through a rather long list of opportunities that we're addressing and one of the things that we've been focused on over the last number of years is to make sure that we invest appropriately ahead on those opportunities so that we can really drive affordability. And part of those investments are capital. And you've seen an elevated level of capital from us most recently and we've indicated we expect that will continue to be elevated for a couple more years. So, from our perspective, when we're thinking about generating the returns for the business, we want to make sure that, first and foremost, we are investing appropriately into this as we go forward. So I want to make sure that's a part of understanding and the dialogue when it comes to free cash flow, because as we look forward over the next few years, CAS recoveries will certainly be a part of that, all the other aspects that Ken mentioned with respect to the strong focus we have across the enterprise on working capital will be a big part of that. But we are investing in our company, and we expect to continue to do that.

Okay. Is 2018 a realistic target, though, to get to that 100%? I'm not trying to put you on the spot, but I kind of am.

Yeah, we won't give you guidance out that far, but clearly we like strong cash conversion. And we actually incentivize the team on it. So you can rest assured that it's going to be a big focus within the enterprise.

Thanks.

Thank you, Myles.

Your next question is from the line of Carter Copeland with Barclays.

Hey, good afternoon, gentlemen.

Hi, Carter.

Wes, want to ask, I know you can't talk about the program, but I want to ask a fundamental sort of overarching question about cost. Clearly, the redacted GAO document has nice things to say about your labor rates and labor costs. And as you think about competitiveness and winning business, because there's a lot of it still out there to win, is there anything we should read into that, fundamental decisions that you've made as an organization to make those rates more competitive? I mean, what should we read into that kind of commentary and what it means for your opportunities for the future? Thanks.

Well, Carter, I am glad you asked about that. With the GAO report out, and by the way, we are delighted that the GAO report has come out. I think it is important for the clarity that that report provides. It makes it clear that the GAO did perform a very rigorous and deliberate review of the work that the Air Force did, and its very thorough selection process. And it, I thought, made the very compelling case of validating that the Air Force clearly chose the most capable and affordable solution. And, in reading that GAO report, I know there are a lot of lines that are sort of blacked out, but I think it's important to, as you did, really kind of dig in and understand some of what was said there. First, I think you'll see in that report the continuing discipline that we bring to the bidding process that we've been demonstrating time and again over the years. Some years ago, and it was after we had initially been awarded a multibillion-dollar tanker program, we chose to walk away from the second round of bidding on that, because it was pretty clear to us that the new acquisition approach simply would not be an attractive program for our company or for our shareholders. And we've declined to bid on a number of other programs over the years for the same reason. And as the GAO report, I think, did a really good job of pointing out, the Air Force took a very focused and long-term approach on this program. They funded us for a number of years in advance of the bids, so we were able to mature our design. But specifically to your question, during that time that we were working our design, it became…

Thanks for the color, Wes.

Thanks.

Your next question comes from the line of Howard Rubel with Jefferies.

Thank you very much. Not to pile on, but I think Carter asked something that's sort of important. And as you look at EACs, you have some that work for you and some that work against you, so I have sort of a two-part question. First, as you look at the unfavorable adjustments, what do you do in terms of a process in terms of trying to make sure they don't reoccur, Wes, or you get to the core of what happened and make it better going forward?

So on that one, Howard, and thank you for that question. Because it too is a very strong focus within our enterprise. You, I'm sure, and most on the call will recall, it was not that long ago, during the last decade, where we had a series of program issues that resulted in – unfavorable would be a kind word. They resulted in terrible adjustments that we had to make to our earnings estimates. And we took away from that process a very intensive set of learnings in the company around how you not only execute on the program but also how you bid and then prepare to execute on the program. And it is addressed across our organization in all of the operating rhythms that we have. When it comes to the discipline of bidding, we have a very comprehensive, independent, non-advocate review process that has individuals who have nothing to do with the bid come in and scrub the heck out of it and try and find everything they can that could potentially go wrong so that we can get our heads around that. It's not that we're trying to avoid every element of risk; we want to be able to manage the risk. We've also worked hard to institute in our culture the recognition that all programs of great complexity, like the ones we take on, have challenges. And good program managers get their hands up early and ask for help. It's the program managers that don't do that that end up creating problems that are hard to dig your way out of it. We like to use the analogy of a dead fish. It smells pretty bad after day one or day two, but wait for a week or two, you don't want to be anywhere near it. So for us it is all about this discipline around program execution, the clarity and transparency that we need, so that we can get the resources on issues fast. And we know there will always be issues. That's just the nature of our business, where we tend to work at the higher end of technology. But it's how you manage those risks that matters. So it is for us a strong fabric of what we look for in our program management teams. It's embedded now in the way that we do all of our training. And I think it's helped us. Are we perfect? No. And we continue to find these issues, and as you pointed out they show up in terms of unfavorables from time to time. But the discipline around getting on it fast and being able to work on it with clarity and really get to root cause so that we learn from one program on to another it's a core part of the way we operate across the company.

And then to translate that into results, you talked to – you noted that lot 9 and 10 on the F-35 is done. How should we think about your ability to – or how should we think about that contract in terms of profitability relative to the existing profitability of the business?

Well, I would say broadly, and I'll let Ken give a little more color on it, F-35 is a program still in LRIP, which is interesting after all these years, but it's still in LRIP. And LRIP is the build up to full-rate production. And our history in our industry is that we are typically more profitable in full-rate production. So are we at a place yet on F-35 where we are satisfied with the profitability of that program? No, we are not. And I think if you ask the prime, they would give you a similar answer. But it is kind of a reflection of the stage we're in to some extent. So our efforts on F-35 in support of the work that Lockheed is doing is to continue to drive on affordability. The blueprint for affordability that we together put forward I think was a really good strategy and I was delighted to see the customer so supportive of it, to continue to aggressively find opportunities around the program to really go after cost. Because we've got to get the cost down as soon as we can so that we can really get the production rate up. It's when you're at rate when you're really able to drive on cost. And that's when you also do better on profitability. So this to me is all about getting the rate up and we need to demonstrate the affordability so we can get the rate up.

So I think that's right. I would just add that I think we've been performing very well from an operational perspective. Unfortunately, the program is at this point not quite where we would expect a production program to be in terms of margin, but we've been working hard, working with Lockheed in terms of driving the cost per unit down. And we certainly expect as we look forward we see some volume ahead of us. As we get after that ramp, I expect that we can drive the margin up to where we expect a more reasonable, mature production margin to be.

And we're all looking forward to this. We see F-35 is a really good program. It's clear the need for it both in the U.S. and around the globe, so we simply need to work our way through this part of the process and get this thing into full rate.

Thanks. Thanks, gentlemen.

Thank you, Howard.

Your next question is from the line of Jason Gursky with Citi.

Good morning, or good afternoon, everybody. Just a quick question on margins. Wes, could you talk a little bit about the contracting environment and whether it is changing at all and whether that will have either a positive or negative impact on the outlook for margins structurally for the company? And then, Ken, on the margin question, you've spoken in the past about some of the headwinds at Aerospace over the next couple of years because of mix. You've also talked about some tailwinds. Can you just provide us a quick update, kind of where we are from your view on the likelihood of holding Aerospace margins roughly flat here as we transition into more revenue streams coming from lower-margin programs?

Yeah, I'll start on the environment, then hand over to Ken. Just what I see, and I talked a little bit about this already in response to some of the earlier questions, what I see in our environment today is just a great pressure on our customers to fit it all in. The budget has not grown as fast as the threat, but no one has told our customers they've only got to deal with 70% of the threat because they're getting 70% of what they need. And so I fully understand where they're coming from, that things have to become much more affordable. And oftentimes I think people hear that as some sort of great conflict between the defense industrial base and our customer community; it's not. What our customers are saying is they've got to be able to get more capability at a lower cost and that's just the way it is. And we all know it doesn't do much good to go fight over the small percentage differences that you can negotiate around profitability. The place you make headway on this is to go after the 80%, 85%, 90%, whatever it is, that's the core cost. And so that's our focus – drive affordability by taking out cost. And when we do that, what we've seen is we see a customer that's eager to incentivize our performance with good profitability. So I think it's a good, healthy, balanced relationship that we have with our customer community. I know that on individual contracts there can be lots of dialogue around, well, is it this percent or that percent on profitability. But we all know ultimately at the end of the day nibbling away at profitability is not the answer. It's driving on cost and driving affordability so that our customer can get done what they need to get done. And at the senior levels in our customer community, at the program office levels, I think they understand that. I see good dialogue and engagement around that, but they do need to see more affordability from the industrial base and that is our focus.

I would agree with that. I would say that overall the contracting environment is consistent to improving in terms of how we're dialoging with the customer on that front. And ultimately, in terms of margins, I think it's going to come down to performance and mix. The bottom line is we have got to continue to perform on our programs. I think we've been doing a good job of that here over the last few years. And largely what we're seeing in terms of our margin rates and the margin rate, particularly at AS to your question, is driven by mix. I think if you look at our disclosures, you'll see that we have talked about it's basically some additional development work that's working its way into the revenue stream. We do continue to see that we've got production opportunities as well. It's just that the increase on the development side this quarter is larger than the production side. But we talked about on the production F-35 increased, E-2D increased. So we're seeing some volume there as well. At the end of the day, I think it comes down to again mix, but then our ability to perform. And I'll just remind you that one of our key metrics for our team is margin rate. And so we continue to make sure the team is focused on driving margin rate. And again, it's not against our own forecast or our own budgets, but driving margin rate to be higher than our peers. And that's how we incentivize the team, and we certainly hope that we'll continue to deliver strong results in that regard.

Great. Thanks, guys.

Thanks, Jason.

Your next question is from the line of Noah Poponak with Goldman Sachs.

Hi, Noah. Noah Poponak - Goldman Sachs & Co.: Hi, good afternoon. Hey, Ken, how are you?

Good. Noah Poponak - Goldman Sachs & Co.: I had a few other questions on AS. So first on F-35, could you just update us on roughly how large a percentage of revenue that is in this year's plan, and roughly where it gets to once you're at full rate?

In terms of this year, Noah, I would say that we're looking at about 7% for F-35 in terms of the total percentage of revenue. And that's again, I'll just remind you, that's contracts at both AS and MS, so it's the center fuselage as well as the radar, the DAS and the CNI. About two-thirds of that comes from AS and a third from MS. In terms of the longer period after the plan, I would say, look, we're looking forward to ramping volume on F-35. We've invested for the ramp, we've got an automated production line that's ready to roll. It's just a matter of how that moves versus the various other programs that we've got. We've talked about some of the development programs as well as other production programs like E-2D and Triton. We're very excited to be into production on the Triton program. So that one probably has a few too many complicating factors to tell you precisely what that percentage is, but we are looking forward to seeing additional volume on F-35. Noah Poponak - Goldman Sachs & Co.: Okay. You mentioned, I think you used the term ramp-up on E-2D in the prepared remarks, or in the release. I thought that that program was growing but at a relatively low or stable rate compared to some of your other programs. Is that wrong, or maybe just how quickly is E-2D growing for you currently?

I would say that E-2D is – as the production on E-2D has moved into the multi-year phase, you'll probably remember we had a full-rate production contract and then moved into multi-year, which was a five-year, 25-aircraft deal. And as we've moved into the multi-year program and that's starting to work its way through the production line, we are seeing some ramp in the volume. I would say it's maybe more on the modest side, but it's going to continue to drive additional revenues as we look forward. And it's a very important program to us, one of our largest programs at Aerospace, and it's a contributor for sure.

Yeah. And we're just beginning to address the international opportunity on E-2D with Japan. And over time, as we saw historically with E-2C, we think there will be nice international opportunities on E-2D, so that will drive some of that opportunity space as well. Noah Poponak - Goldman Sachs & Co.: Wes, how big could that become relative to your domestic sales there?

On E2? Historically, the domestic side of E2 has been the bigger part, and I think that will be the case here as well. But we have a number of allies around the globe who are interested in this capability, and the Navy has been very supportive of that interest, so it's a little bit too early to tell, but I do think it will have some nice international opportunity. Noah Poponak - Goldman Sachs & Co.: Okay. And then just last piece. The Space program declines that you've mentioned in AS, when do those annualize? And I guess, what is that sort of piece of the segment grow, if anything, once those programs have annualized and rebased?

Noah, in talking about the Space business, maybe let me just kind of step back for a second and say, in terms of programs that are in declining mode, yes, we have AEHF and the James Webb Space Telescope. We've kind of seen, I think, the ramp-down on those, and we'll probably be at a more consistent level as we look forward. But I think it's important to recognize that we manage the Space business really as an overall portfolio. And unfortunately, a large part of that business is one that we can't talk a lot about. But I will say that we are seeing some growth in other areas of the business. And overall, we think that the declines in Space will probably work their way through the system in 2017. And largely, when we look at that business as a whole and we look as it moves forward, we expect that we'll see some growth over the long term in the Space business. It's a robust business, and has some opportunity sets in front of us that Wes mentioned. So we look at that as something that will be growing over the long term.

Yeah, and I would just add that there are a few basic drivers, and those drivers actually do result in the down ramp that we'll see, at least through next year a little bit, as Ken said, on the unrestricted side of our Space business. And that's the relook that's going into the Space architecture, where it's pretty clear, on a go-forward basis, Space is no longer a sanctuary and we're going to have to think about that architecturally. And our customers being thoughtful on that, and it will take a little bit of time to sort out exactly how they want to acquire the new capability. So I think it's kind of a natural process on our unrestricted Space business. The restricted side of the business continues to be quite healthy. Noah Poponak - Goldman Sachs & Co.: Okay. Thank you.

Your next question is from the line of Seth Seifman with JPMorgan.

Great. Thanks very much, and good afternoon.

Hi, Seth.

Hi. Ken, just a brief question for you. A lot of the upward pressure on working capital this year has been in receivables, and there is typically some, but it's been more this year. Is that a driver of the strong free cash flow that you expect in the first quarter? Is there kind of one thing there that's outstanding to collect that kind of changes things, or is it a bunch of different things? Maybe if you could just address that topic a little bit.

Sure. I've commented a little bit on that earlier in terms of some of the burndown of advances that we've seen on a couple international programs. And also I think, as we've had a few contractual delays that have impacted the timing of cash flows and the working capital, as well as I mentioned the DFAR clause, in terms of limitation on performance-based payments. But largely, I don't think we see anything in there other than timing, for the most part. If you look at our historical timing of cash flows, we're much stronger in the fourth quarter, just in terms of how our business flows through the year, we're much stronger in terms of inflows in the fourth quarter, and we expect that to be a continued trend this year. We'll have a strong finish to the year, and we're confident that we'll be within our range from a free cash flow perspective. That cash flow will come out of those receivables and drive the working capital down, so I think at the end of the year, you'll see that we're at a level of working capital that's about – more consistent with where we normally are by year-end. And then we'll continue to focus on this as we move forward. We are working with our customer on the impact of the DFAR clause on working capital, and how we manage that going forward. I think they recognize that that's important to both parties, in terms of an appropriate level of cash flow for the type of contract and for the cost profile that's incurred on that contract. So, no issues in terms of overall collectability or any significant change in our ability to manage the working capital. I think we just got to work through these couple things, and we'll see our cash flows start to increase as we grow the business, as we look forward.

Great. Thank you very much. I appreciate it.

Robin, we've got time for one more.

Thank you, sir. And your last question comes from the line of Cai von Rumohr with Cowen & Company. Cai von Rumohr - Cowen & Co. LLC: Yes, thank you. So your 10-Q indicates that your backlog at AS and Mission Systems was up from year-end. While you didn't give the exact level of the backlog, should you look for that backlog to move up from the third quarter level by year-end?

Cai, I'll say that, in terms of backlog, we did make a change in terms of our quarterly disclosure of it this year. And I wouldn't be able to say much more than the trend data that we've got in the document. Both AS and MS are up from the year-end, and TS we disclosed was down slightly from last year. And largely what I'll tell you is that the quarterly impact of awards we view as kind of, yeah, sure it has some lumpiness to it, and looking at this over the longer term we think is the more appropriate way to think about awards. And year-end we'll endeavor to provide the level of backlog detail that you all will be looking for. And I think that's probably the most information I can give you at this point in time. Cai von Rumohr - Cowen & Co. LLC: Last quick one. When you look at your cash deployment for shareholders, dividends and repurchase, it's tended to exceed by a fair margin your free cash flow. Should we expect that to continue in the future? And how do you look at the relative priorities between dividends for shareholders and stock repurchase?

So Cai, I would say that we undertook an effort to buy back 25% of the outstanding shares of the company in 2013. We worked that through the system through the fourth quarter of last year and that resulted in a significant amount of capital deployed in excess of free cash flow. I wouldn't necessarily expect that to continue as you look forward. We would expect to be essentially deploying cash in a manner that says, look, we're going to invest in the business, as Wes mentioned. We're investing higher in terms of CapEx. We pay a competitive dividend; you saw we increased our dividends again in May. And then excess cash we tend to deploy through share repurchases. We take a pretty consistent approach to share repurchase. We're not speculative. We set a plan and we go after it. In terms of maybe what you're seeing is we finished the 25% repurchase in the fourth quarter of last year. We kind of have a little bit of a slower first part of the year this year in terms of cash generation, so we spent a little bit more than 100%. But as we generate the cash in the fourth quarter I think you'll start to see that normalize a bit. Cai von Rumohr - Cowen & Co. LLC: Thank you.

Okay. Robin, I think that's all the time we have right now, so I am going to turn it over to Wes for final comments.

All right. Thanks, Steve. Let me wrap up by thanking our team. We are just so fortunate to have an amazing group of people across our company who are focused on performing for our customers and our shareholders, and I sincerely appreciate all that they are doing. So thanks, everyone, for joining us on our call today and thanks for your continuing interest in our company.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.