Lockheed Martin Corporation (LMT) Q3 2021 Earnings Call Transcript

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Lockheed Martin Corporation (LMT 0.38%)
Q3 2021 Earnings Call
Oct 26, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome, everyone, to the Lockheed Martin Third Quarter 2021 Earnings Results Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Greg Gardner, Vice President of Investor Relations. Please go ahead, sir.

Greg Gardner -- Vice President of Investor Relations

Thank you, John, and good morning. I'd like to welcome everyone to our third quarter 2021 earnings conference call. Joining me today on the call are Jim Taiclet, our Chairman, President and Chief Executive Officer; and John Mollard, our acting Chief Financial Officer.

Statements made in today's call that are not historical fact are considered forward-looking statements and are made pursuant to the safe harbor provisions of federal securities law. Actual results may differ materially from those projected in the forward-looking statements. Please see today's press release and our SEC filings for a description of some of the factors that may cause actual results to differ materially from those in the forward-looking statements.

We have posted charts on our website today that we plan to address during the call to supplement our comments. These charts also include information regarding non-GAAP measures that may be used in today's call. 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 Jim.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Thanks, Greg. Good morning, everyone, and thank you for joining us today on our third quarter 2021 earnings call. In a few moments, John will provide a detailed review of our quarterly results, updated 2021 guidance and trending information for 2022. But first, I will provide a five-year sales outlook and discuss our plans for accelerating capabilities to our customers and driving per share value to our shareholders over that time horizon.

Last month, I led our executive leadership team as we completed our annual strategic and financial planning process. Given the scope of changes in our operating environment over the past year, we conducted a more in-depth and extended assessment of our financial forecast. Based on these strategic and financial reviews and the information available to us today, our current expectation is that sales in 2022 will decline slightly from our expected 2021 sales level. We then anticipate sales will increase slightly in 2023 with steadily increasing sales growth through 2026.

This sales trajectory reflects a number of factors, including the continuing effects of the ongoing COVID pandemic and extended delivery time lines across our supply chain, moderating growth rates in the U.S. defense budget, shifts in customer priorities driven by recent events such as the withdrawal of U.S. forces from Afghanistan and the renationalization of the AWE program in the U.K. and our recently completed agreement with the F-35 joint program office on a rebaselining of aircraft deliveries under our production program. I'll address this significant agreement a little later in my remarks.

As with all forward projections, our performance on current programs, our ability to win highly competitive new starts, the size of future defense budgets and the global geopolitical landscape will all influence our ultimate growth rate over the coming five years. But as we look ahead, there are four primary areas that underpin our longer-term growth forecast.

The first of these future growth areas is within our hypersonics portfolio. We are currently performing on six hypersonic programs across the company. And following the successful completion of ongoing testing and evaluation activity, multiple programs are expected to enter production between 2023 and 2026.

The second growth area is within our classified activity. Three of our four business areas are engaged in significant classified development programs. And pending successful achievement of the objectives within those programs, we expect to begin the transition from development to production again between '23 and '26.

The third area of expected growth lies in our current programs of record. Our portfolio is very well aligned with our customers' mission requirements. And as a result, we have multiple programs from each business area entering growth stages. This includes the CH-53K heavy lift helicopter, F-35 sustainment activity, increased PAC-3 production rates and the modernization and enhancements to the fleet ballistic missile.

And finally, we're in competition for several significant new business awards, including the future vertical lift, FLRAA and FARA competitions, the next-generation interceptor program, and the KC-Y tanker program. These represent meaningful opportunities to accelerate our projected top line growth profile with new long-term projects that are critical to our national defense.

Now I'd like to discuss our strategy for driving strong returns for our shareholders in the near term while remaining well positioned for our expected return to growth in 2023. The central tenet of our value creation strategy is using a disciplined and dynamic capital allocation process. We will first reinvest capital into our business to meet our customers' requirements and drive organic growth. Concurrently, we will continue pursuing actionable inorganic growth opportunities that strengthen our core business. And we will return cash to shareholders through increasing dividend payments and a significantly expanded share repurchase program.

To drive sustainable organic growth, we will continue making significant investments in our business area. These investments include nearly $2 billion of annual capital expenditures and approximately $1.5 billion in independent research and development spending each year. These investments are being made in our signature platforms and systems to provide our customers with the high-value solutions they're going to need to execute their missions of deterring, if necessary, to feeding the pacing threats across all the domains of operations.

Additionally, we are transforming our internal operations with a model-based engineering and enterprise architecture and we are building digital factories of the future. These investments and state-of-the-art engineering, manufacturing and sustainment tools and techniques will ensure our business areas can continue delivering outstanding performance levels on current programs while also positioning us to prevail in upcoming campaigns.

After making these significant investments in our business to support our customers and drive organic growth, we expect to have substantial free cash flows available to return to you to shareholders through dividends and share repurchases.

Last month, the Board increased our quarterly dividend by $0.20 or approximately 8% to $2.80 per share and now $11.20 per share annually, providing shareholders, especially our yield investors with strong returns. This action marks the 20th consecutive year that the Board has increased Lockheed Martin's quarterly dividend.

Along with making an increased quarterly dividend payment, we will also provide additional value to shareholders by returning excess cash to them through a greatly expanded share repurchase program. As discussed in today's press release, we've already repurchased $2 billion of our shares through the first three quarters of 2021. And last month, on my recommendation, the Board increased our remaining share repurchase authority by $5 billion, bringing our current total share repurchase authority to approximately $6 billion.

With our stock trading at the level well below what we calculate as the company's intrinsic value, we have significantly increased our planned share buybacks, and I anticipate that we will repurchase up to $6 billion of our shares over the next 12 to 18 months, if conditions warrant.

As a final note on shareholder value, we are going to dynamically allocate capital to the highest return opportunities, prioritizing investments that lead to growing free cash flow per share. That's our new metric. We will remain opportunistic in pursuing accretive bolt-on acquisitions, evaluate additional increases to our current share repurchase authorization and continue to reinvest capital into our business to drive long-term growth.

We have the balance sheet flexibility and firepower to pursue multiple avenues of growth while returning significant capital to our shareholders. We built this balance sheet to use it, and we will do so, consistent with our focus on long-term shareholder value creation.

Our strong balance sheet provides us with the capability to close on the Aerojet Rocketdyne transaction, provide robust returns to shareholders and continue to invest in our portfolio to support our customers and drive future growth. The Aerojet Rocketdyne transaction continues moving through the regulatory approval process and we now anticipate closing in the first quarter of 2022.

Before I turn the call over to John, I'd like to highlight the efforts of the entire F-35 organization, including the government's joint program office, our team mates and suppliers, our aeronautics organization and our international partners for establishing a new aircraft production baseline and delivery profile that will provide industry, government, partner countries and FMS customers as well as, you, the investor community with important visibility well into the future.

The program is strong and stable, and we have opportunities ahead of us to add to that strength. The program has delivered over 700 production aircraft out of a plan of record of over 3,300 jets, including to all three U.S. services and nine international customers so far, and we look forward to continuing the successful program for decades to come.

With that, I'll turn the call over to John, and I'll rejoin you to answer your questions.

John W. Mollard -- Acting Chief Financial Officer

Thanks, Jim, and good morning, everyone. As I highlight our results, please follow along with the web charts we have included with our earnings release today. Let's begin with Chart 3 and an overview of third quarter activity.

Starting with sales, we reported revenue of $16 billion. This result was below our expectation as we realized larger-than-anticipated supply chain impacts across Aeronautics, Missiles and Fire Control and Space. These impacts span multiple suppliers, and our expectation is that we will incrementally recover from these disruptions over the next 12 to 18 months.

Despite this reduction in sales volume, our segment operating profit increased year-over-year to $1.9 billion on strong operational performance across the enterprise. Our earnings per share of $2.21 included a noncash charge of $4.72 related to our previously announced pension transaction. We generated $1.9 billion in cash from operations and continued our practice of accelerating payments to our supply chain with $1.5 billion in accelerated payments at quarter-end.

The supply chain disruptions we experienced during the third quarter underscore the fact that many of our suppliers are still dealing with the financial stress caused by the global pandemic. In addition, we continue to return substantial amounts of capital to our shareholders through both dividend payments and share repurchase activity. And we have provided trending data for 2022, which we will discuss further in a few minute.

Turning to Chart 4, we compare our sales and segment operating profit this year with last year's results. As we noted in our earnings release, our third quarter sales are below 2020 levels, primarily because of the renationalization of the Atomic Weapons Establishment program in our space business area. Our third quarter sales also reflect recent supply chain delays, most notably on the F-35 production activity and on several production programs within both Missiles and Fire Control and Space. Despite this reduction in sales volume, our third quarter segment operating profit is up from last year as strong operational performance resulted in significant risk retirements across all four business areas.

Chart 5 shows our earnings per share for the quarter. Our earnings per share of $2.21 incorporates a $4.72 noncash charge associated with the $4.9 billion pension liability transfer we completed back in August. On an adjusted basis, our pre-transaction earnings per share of $6.93 was 11% higher than our 2020 results due to improved segment operating margins, reduced share count and another quarter of mark-to-market gains across our Lockheed Martin Ventures portfolio.

While future volatility associated with investments in early stage companies as expected, the significant gains realized across multiple holdings in our Ventures portfolio, reinforce the value of investing in and partnering with companies focused on cutting-edge technologies.

On Chart 6, we will look at our year-to-date cash generation and deployment. Subtracting our capital expenditures from almost $5 billion of cash from operations, our year-to-date free cash flow is greater than $4 billion. We've repurchased $2 billion of shares year-to-date, including $500 million during the third quarter and have made more than $2 billion in dividend payments.

In total, our balanced cash deployment of nearly $4.2 billion represents over 100% of free cash flow returned to our shareholders year-to-date. And we will continue these shareholder-friendly actions going forward as evidenced by our recent dividend increase and share repurchase program announcements.

Moving on to Chart 7 and our 2021 guidance update. We've lowered our 2021 outlook for sales and segment operating profit to reflect the previously discussed supply chain impacts that emerged in August and September. We've reduced our outlook for cash from operations primarily to reflect our updated plan to maintain our current $1.5 billion level of accelerated payments to our supply chain. We plan to continue supporting our suppliers as they recover from pandemic-related impacts, especially small and medium businesses, both across the country and internationally, to help maintain program schedules and customer missions.

The full year outlook for earnings per share has increased $0.35 from the midpoint of last quarter's range driven by Lockheed Martin Ventures investment gains in several nonoperational items.

Now turning to Chart 8. We take a closer look at the current year revisions to 2021 sales by business area. As discussed, Aeronautics, Missiles and Fire Control and Space have all been affected by lower-than-anticipated activity coming through our supply chain. The level of reduction in supply chain activity over the past two months is higher than what we've been experiencing since the beginning of the pandemic, and our 2021 sales outlook assumes that we will see a return to more normal activity levels in the fourth quarter. In addition, our sales outlook for 2021 and our trending information for 2022 excludes any potential impacts associated with the recent executive order on safety protocols for federal contractors.

On Chart 9, we see segment operating profit tracking with the reduction in expected sales volume. And our expected segment operating margin outlook remains at 11%.

On Chart 10, we take a closer look at our initial trending information for 2022. We've estimated 2022 sales at approximately $66 billion, a decline of 1.5% from our projected 2021 results. As a reminder, the renationalization of our work in support of the United Kingdom's Atomic Weapons Establishment earlier this year creates a headwind of just under $900 million on a year-over-year basis.

We are expecting segment operating margins to remain at approximately 11%, and we are projecting growth in cash from operations year-over-year to greater than or equal to $8.4 billion. This outlook assumes there will be no increase in tax payments related to capitalizing R&D costs. If current legislation is not amended, our cash from operations outlook could be reduced by up to $2 billion.

Also, given we continue experiencing impacts across our supply chain, we now anticipate maintaining accelerated payments at the current $1.5 billion level through year-end 2022. Our prior multiyear cash forecast assume there would no longer be a need to accelerate payments to our supply chain beyond 2021.

We are currently assuming a statutory corporate tax rate of 21% and we have not included any financial projections associated with closing the Aerojet Rocketdyne acquisition, which, as Jim mentioned, is now expected to occur during the first quarter of 2022, subject to required regulatory approval.

Turning to pension-related assumptions. Interest rates have increased since year-end 2020. Our year-to-date actual returns have been higher than previously expected and we've lowered our long-term rate of return to 6.5%. And in response to investors asking for additional information on pension trends, we have included two charts on this topic in the appendix. These trends include no required pension contributions through 2025 based on current assumptions.

On Chart 11, we outlined our expected capital deployment activities for 2022. We anticipate spending approximately $2 billion on capital projects next year, which represents an increase of approximately $300 million over expected 2021 levels. In addition, we anticipate investing approximately $1.5 billion on independent research and development activities, which represents a $200 million increase over planned 2021 levels. These investments are being made to enhance our delivery of critical systems and products to our customers as they execute their national security missions while ensuring we are well positioned to compete for new business opportunities.

We will be making over $3 billion in dividend payments next year based on a recently announced $0.20 per share increase to our quarterly dividend rate. And as Jim shared earlier, we will also continue to strategically buy back shares when we believe they are trading below intrinsic value as they are now. We are planning to opportunistically repurchase up to $6 billion in shares over the next 12 to 18 months. We are confident we have the balance sheet flexibility and firepower to pursue all avenues of growth while returning significant capital to our shareholders.

On Chart 12, we provide some additional detail on our expected long-term trajectory for F-35 sales. As Jim commented earlier, we recently reached agreement with the joint program office on our expected F-35 delivery plan. This joint plan represents the best intersection of production operations and supply chain capabilities, technology insertion in support of increasing mission requirements and both the timing and quantity of anticipated new production aircraft award decisions. We are very pleased with the outcome of this joint production replan as it provides stability and predictability across all key elements of this program.

Deliveries are expected to grow to 156 aircraft by 2023 and will remain at that level for the foreseeable future. We are projecting F-35 production sales in 2022 will be lower than 2021 levels and sales will also decline slightly in 2023. Revenues are expected to remain around 2023 levels throughout the balance of the forecasted time frame.

As we've previously discussed, the growth in F-35 sales volume will primarily be driven by sustainment activity as the number of deployed aircraft and associated flight hours grows rapidly while we continue to aggressively pursue cost takeout in partnership with our customer. Finally, we are also projecting modest growth in development activity as our customers continue seeking further advancements and capabilities for our unrivaled fifth-generation aircraft.

To conclude, on Chart 14, we have our summary. We've reduced our 2021 outlook based on the higher-than-expected supply chain impacts we experienced during the third quarter. The supply chain and related production impacts, along with our updated F-35 production plan and the other factors Jim mentioned, have shaped our outlook for 2022 and our future expectations.

Our strong balance sheet and cash generation give us multiple options to deploy cash. And to echo Jim, we will prioritize investments, which will grow free cash flow per share. And with our broad portfolio dedicated employees, strong balance sheet and a disciplined and dynamic capital allocation strategy, we remain focused on our customers' mission and long-term value creation for our shareholders.

With that, John, we're ready to begin the Q&A.

Questions and Answers:

Operator

[Operator Instructions] And first, to the line of Rich Safran with Seaport Global Securities.

Rich Safran -- Seaport Global Securities -- Analyst

Jim, John, Greg, good morning. Jim, John, I have a two-part question here on your 2022 guide, your long-term cash flow guide and some of your opening remarks. What's the baseline budget that you're assuming in your guide? And specifically, if the plus ups to the President's request from HaaS and SaaS [Phonetic] are included, did that imply some upside to your '22 guide? Or is it just too late for fiscal '22 funding to have an impact?

And the second part to my question is, so you lowered your cash from operations guide for '22. I want to know if you could discuss a bit more about what you think cash flow looks like beyond '22 and what you're assuming along with that? Thanks.

John W. Mollard -- Acting Chief Financial Officer

Yes. Thanks, Rich. It's John. I'll take both parts of that two-part question. So first, in regards to the assumptions in and around the budgetary based on, we're using the President's budget of $715 billion for the government fiscal year 2022 in the trending information we've given you. I'd say we're encouraged about the direction of the various committee markups as they reflect really good support for a number of our programs. And to your question about how much -- if any of this will come through in 2022, the answer to that question is going to be based on how much incremental funding is actually appropriated, how long it takes for that appropriated funding to end up getting on contract with us and us flowing that down to our supply chain. And then the third factor is what specific programs the incremental appropriations are applied to. It's easier, obviously, to maintain programs at current run rates than it is to accelerate program. So any programs that we're planning sort of a trend down would be really good candidates for being able to see opportunities in 2022 related to increased appropriations. And I'll kind of finish this section by saying obviously, by the time we're in January, when we've given you an updated outlook for 2022, we should have a lot more clarity in and around the budgetary trends.

Now turning to the second part, which I had to do with -- we've previously given multiyear cash -- operating cash flow guidance. And of course, all these metrics are going to be assuming the R&D tax change does not go into effect. Our prior guidance was like $8.9 billion, $9 billion and $9.1 billion. You've seen we've got our guidance now at $8.3 billion for this year and $8.4 billion for next year. And I'll say we anticipate higher than $8.4 billion operating cash flow guidance as we look ahead to 2023. But really, the only factor that's changed since the multiyear guidance we gave before, is in the level and the duration of the accelerated payments we're planning to make to our supply chain.

I think I mentioned in the script, we have previously in that $8.9 billion, $9.1 billion track, assumed we would be accelerating $1.2 billion worth of accelerated -- of payments to the supply chain at year-end -- at the end of this year. But then the assumption was the pandemic would be behind us in 2022, we'd unwind that program, we'd end 2022 with no accelerated payments being made through our supply chain.

Our current forecast, the $8.3 billion and $8.4 billion assumes $1.5 billion of accelerated payments at the end of this year and $1.5 billion of accelerated payments at the end of 2022. So if the pandemic impacts are behind us, before we end year-end 2022, our guide of $8.4 billion would increase by that $1.5 billion.

Rich Safran -- Seaport Global Securities -- Analyst

Thank you.

James D. Taiclet -- Chairman, President & Chief Executive Officer

You're welcome, Rich.

Operator

Our next question is from Rob Stallard with Vertical Research. Please go ahead.

Rob Stallard -- Vertical Research -- Analyst

Thanks so much. Good morning.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Good morning, Bob.

Rob Stallard -- Vertical Research -- Analyst

Jim, just a quick question and clarification on your five-year sales outlook. Did you say you expected sales growth to accelerate after 2023? And then secondly, as a question, what are your expectations for operating margins over this period? Thank you.

James D. Taiclet -- Chairman, President & Chief Executive Officer

I'll speak to growth, Rob and make a point on operating margin that John can pick up on. So yes, based on hypersonics classified programs, programs of record like CH-53K and others, we do believe that we'll have a rebound to meaningful growth in 2023 and beyond. But again, that's also dependent on a number of factors, including the budget, etc., that we've just talked about. So yes, that is the idea. And frankly, we want to use this year or two period to accelerate share of versus reduce the count. So when that inflection point does come on growth, you will have as shareholders, I think basically an amplified benefit during that latter period, if you will. So we fully expect that with margins being pretty steady along the way, right, John?

John W. Mollard -- Acting Chief Financial Officer

Yes, absolutely. So Rob, I mean just to kind of foot stop what Jim was saying to give a little color. The four categories that Jim mentioned in his scripted remarks, hypersonics, classified growth and programs of record and competitive new starts, when I look at that subset of revenue for those four categories in 2021 as sort of in the neighborhood of $17 billion, over the period going out through -- for the next five years, that set of activity, assuming we hit our operational marks, assuming these programs continue on their programs of record, and we win our share of these competitive new business opportunities that we've talked about, that $17 billion worth of program revenue today will grow at about a 9% compound annual growth rate, which gives me some level of comfort that the longer-term trends that Jim has talked about will hold.

Just to reiterate, we're expecting a slight decline in '22, a bounce back in 2023. And then I would say, increasing growth and increasing growth rates going forward. Now -- yes, on the topic of margins, I think 11% is a good working target for us given the evolution in our portfolio and the activity that we see going forward. I just highlighted the four categories that we'll be seeing growth. A lot of those are new start programs. There is going to be some growth in programs of record, which we would hope to turn into accretive margin programs. But there is a lot of growth in new start areas, developmental areas. The good news is we will get -- there will be cost reimbursable contracts. We'll have assurance of recovery of the costs we're incurring, but they, by definition, will be lower margin activities moving forward. And I should mention, and this is just to get this on the record early, there are certain classified activities that we can't talk about. But if those programs continue to progress along the track that they're on, my expectation is we will be making investments in some of those programs out in the '23, '24, '25 time frame that will be dilutive to margins. But I think in balance, an 11% operating margin is a good metric for us.

Operator

Our next question is from Mike Maugeri with Wolfe Research. Please go ahead.

Mike Maugeri -- Wolfe Research -- Analyst

Hey, good morning. Thank you for the time. So following on Rob's question, and you gave us the four priorities to underpin the growth forecast. But Jim or John, can you get more specific and sort of quantify these buckets, how they translate to revenue and feather into your outlook beyond '22 for a return to growth? And then separately, what headwinds are you anticipating to offset these growth buckets?

John W. Mollard -- Acting Chief Financial Officer

Yes, sure, Mike. It's John. I'll take and I'll talk thematically first through the four buckets and growth over time. And then maybe now is good a time as any to talk specifically about sort of what we're seeing moving from '21 to '22 and the headwinds. But the four big buckets, the first one is hypersonic activity. Today, we're doing about $1.5 billion worth of revenue in that area. If we are able to move a number of those activities into a -- from development into production, which we fully expect will happen. We're making great progress on a number of them that are visible and are being reported on today. But our projection would be assuming a number of those activities proceed into a production environment, that $1.5 billion to grow as high as $3 billion by 2026.

The second area classified in -- I'll say upfront, we hesitated even highlighting this given there's not a lot that we can say in general about classified activity. But because it is a large and growing component of our business, we thought it was important to at least give you a top-level trend information. And because like I said, we will be making investments in some of this activity downstream, which will have dilutive impacts. Thought it was a good idea to talk about. But in aggregate, our classified portfolio will grow, we expect at a rate above 5%. So that is a strong growing area for us.

The programs of record, which, as Jim took through some of the big ones you mentioned would be CH-53K, F-35 sustainment the PAC-3 program and an additional growth in the fleet ballistic missile and evolutions and new advances in that program. That portfolio today is worth about $8.5 billion. When we project out to 2026, over that period of time, the compound annual growth rate in that program set is like 8%, and it's highlighted by CH-53K, where we will be delivering out to a program of record of 200 units. I think the final deliveries are made in 2032. But just keeping that program on its program of record will go a long way toward us achieving that growth in the program of record CAGR that I just talked about.

And then the final area is the new business, which are a set of sort of wildcards, you're going to get binary decisions in and around the FLRAA competition or the FARA competition. One of the new business areas that Jim talked about is next-generation interceptor. We've successfully moved into a down select where there's ourselves and one other competitor. We're making great progress. We've achieved a number of important program milestones recently. We feel good about where we're heading, but that will be a down select. And then sort of the wildcard in the bunch and opportunity we're very excited about is the KC-Y tanker program, where we've announced that we will be teaming with Airbus, who we think has a very capable frame for doing this mission and think we bring extensive experience in the mission capabilities that would go on to that airframe. I think we make a very formidable team. We're very excited about that opportunity. And depending on outcomes, I mean, obviously, as we're doing next -- enough in either any of those programs besides the next-generation interceptor, that growth rate could be explosive. If we prevail on FLRAA and FARA, which we think we're very well positioned to do, if we're down selected on NGI and tanker program is awarded to us, there will be substantial growth in that bucket.

And the headwinds, I guess, like I said, now let's tactically kind of walk through the 2021 outlook of roughly $67 billion and how that translates as we look ahead to 2022. Obviously, you look at the map, and we're down about $1 billion. The obvious large year-to-year headwind is related to the AWE renationalization, which I believe either Jim or I talked about in our script as being a headwind of just under $900 million.

The second headwind you'll see on our F-35 revenue chart, we're projecting a decrease in F-35 production-related revenue of about $400 million moving from '21 to '22. And then we have two programs that are sort of international life cycle evolution, very successful programs, but they've delivered out, and that's the Black Hawk helicopter program. And by delivered out, I mean moving down from the peak. The number of helicopters we're going to deliver this year will be cut in half by the time we're two years out. And then our highly successful next-generation OPIR program. Both of those programs moving from '21 to '22, if you combine the downtick in revenue, it aggregates to about $600 million.

And then one of the other external factors was the recently announced and executed withdrawal of the U.S. military presence in Afghanistan. The primary impact to us is in a contract of a special ops logistics support program. We had some other Afghan drawdown related impacts. In total, it's about a $200 million year-over-year headwind.

But now as I pivot to the plus side, one of the programs that's ramping up year-over-year is one of those in the, I'd call it, competitive category that we talked about. It's the next-generation interceptor, where we're doing about $200 million in revenue in 2021. We expect to do about $600 million of revenue in 2022. We have a lot of growth, as we mentioned, within our classified activity. A lot of that activity is being done in our Skunk Works organization within Aeronautics. That work is going to be growing about $400 million year-over-year.

And the final large program of record growth is in the CH-53K heavy lift, where we'd expect to see $300 million year-over-year growth. So on balance, it's down. The headwind is removal of the AWE activity we were doing.

Operator

Our next question is from George Shapiro with Shapiro Research. Please go ahead.

George Shapiro -- Shapiro Research -- Analyst

Yes. Just to follow-up on your comments on the sectors. First, AWE, a $900 million hit. I thought that program had been running more like $300 million or $350 million a quarter. And obviously, it's really only the first half that overlaps for '21 to '22. So if you could comment on that. And then if you looked at each of the sectors there, I would think that the aeronautics would be down maybe $1 billion, $1.5 billion, but you get some growth in RMS, you get some growth in Space ex the AWE. So if you could just kind of comment on that status.

John W. Mollard -- Acting Chief Financial Officer

Yes. Sure, George. Thanks for the question. So if you go back to like our first and second quarter press releases, and we probably have it in the year-to-date, AWE first quarter activity this year was $440 million. AWE activity in the second quarter was $435 million. You sum those two, you get the $875 million level of activity we saw probably higher than what you might have remembered because you had a lot of wrap-up associated activity that took place, but it was $875 million in 2021 that won't recur.

And maybe what I'll do is do a high level sort of around the horn of how those -- the headwinds and tailwinds play out by segment. I mean, the first segment we talked about is Aeronautics. As we look ahead to '22, we're expecting low single-digit growth rates in Aeronautics with a slight increase in margins, think of it in the 10, 20 basis point range.

Within Missiles and Fire Control, we're actually expecting a slight decline, a low -- think of it as a low single-digit decline with margins slightly lower than 2021 levels at, again, 10 to 20 basis points. If you go to RMS, we're expecting a low single-digit decline as well with margins maybe up to 40 basis points below what we're going to end up within 2021. And then finally, at Space, we're expecting mid-single-digit declines. Obviously, that's where the reduction takes place with margins kind of comparable to what we're expecting for 2021.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Yes. And George, it's Jim. Just to give you a little more color on just pick on RMS, right? So John already mentioned the Black Hawk is going to be down next year, year-to-year and the CH-53K is up, they actually offset each other, OK? So in 2022, it's kind of a wash between, let's call it, those two programs. And then similarly, we get combat rescue helicopter upside, maybe $100 million, but probably VH will -- the plan is VH-92A production down about $100 million to $150 million and they offset.

You might remember that we were part of the Australian Future conventional sub program. Well, that's gotten deferred into nuclear submarine propulsion option. And we're going to compete for that, but it's going to be a while before that kicks in. So there's another $150 million. So there are puts and takes in every BA, if you will, and it's part of, again, new administration, some changes in priorities, changes in alliances, I think they all settle out to the good, but it's going to take a couple of years to get through all that kind of maneuvering and we're going to do the best we can in the next couple of years to make sure that if there's a flattish period for our company as far as revenue, we're going to really double down or triple down on returning cash to shareholders because we've got it.

And the other thing I'd say, George, real quick to add on to something that John said earlier, we are voluntarily continuing our acceleration of payments to supply chain. This is something for the good of the industry, for the good of the customer. And we want to contribute as all of us in our own ways in this country to recovering from COVID. And again when -- as John said, when COVID is aside, we will get that cash flow number back to where you thought it was going to be in the first place. So just a couple of color commentaries on there, because I think you guys are asking some really good questions.

Operator

And next, we'll go to Pete Skibitski with Alembic Global. Please go ahead.

Pete Skibitski -- Alembic Global -- Analyst

Yes, good morning. Hey, guys, can you give us greater insight into the supply chain? Because it seems like we're in a period here where cash flow terms are unusually generous. So it's hard to understand why they'd be in such financial strain. Is it all related to things like just labor availability or COVID mandates or semiconductor shortages. Can you give us greater insight as to why the supply chain is in such dire straits given the cash flow terms that they've been operating under?

John W. Mollard -- Acting Chief Financial Officer

Yes. Pete, good question. And I think a large part of the impact that our supply chain is facing are in our suppliers that are dual use. I mean they're supplying to both commercial aerospace and defense. So if we're looking at parts of the supply chain that are strictly defense, they're probably not nearly as stressed financially as our dual-use suppliers, people that are -- they'll make landing gear for us and they'll make landing gear for commercial aircraft, they make brakes. Those are the suppliers that have fixed operating costs that have seen substantial revenue decreases on the commercial supply side that have really cut into their operating cash flow. And we think it's the right thing to do. We have access to capital. We have access to cash at extremely good rates. We generate a lot of cash flow. It's -- and as Jim said, it's in the industry's interest, it's in our customers' interest. And frankly, there is an element of self-preservation here. We need our supply chain to be successful for us to be successful.

So while it's voluntary, it's not 100% altruistic. I mean we need to make commitments, we need, especially our dual-use vendors and partners or supply chain partners to be successful for the long term.

Operator

And next, we'll go to Ron Epstein with Bank of America Securities. Please go ahead.

Ron Epstein -- Bank of America Securities -- Analyst

Hey, yes. Good morning. Maybe if we could just back up the aperture a little bit. Jim, when you first came on board, you talked a lot about a focus on the 21st century warfighter, war fighting connectivity, that sort of thing. Then we shifted a little bit maybe with the acquisition of Rocketdyne. And now here we are, it seems like the story has now shifted to this cash return story with no growth. And I think what's on a lot of people's minds is ultimately, what is the strategy? I mean where are you taking the company? And what's the vision here? Because it really seems -- and I know this may be -- might sound unfair, but it seems a little bit rudderless right now, at least from an outsider's perspective. If you could give us some color on that.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Yes. Well, when you're running a business, Ron, in a dynamic industry with changing government, when the government is a major customer, you've got to be agile, right? Now the first thing you mentioned is the long-term strategy of the company. We're going to deliver on our programs and record. We're going to drive operational excellence, but we're driving it toward a mission-oriented paradigm at the end of the day at Lockheed Martin versus a product paradigm, which we've been operating under since at least before World War 2.

So that paradigm is still there. We're working toward it. In the meantime, we got to deliver for you all as the shareholders financially, and we've got to deliver for our customers operationally. But I'm getting -- I'd like to think tremendous traction with senior government officials in the U.S. and elsewhere that understand that while our industry and their purchase of our products and services over the years has been effective. It's largely effective in the physical world, if you will, in the Tonyan world. We're really good at technologies like hypersonics, space travel, precision weapons, etc. Those are in the Tonyan world, we're really good at that as an industry and our customer knows how to buy that stuff.

What we're not as good as we need to be in the defense industry is merging that excellence in the physical world that we can bring to National Defense, but merging that with the developments -- the accelerated developments in the digital world by companies that have specialized in things like 5G and AI and distributed computing and networking. Because if we merge those two things together and the ways that we're forecasting and we're building technology road maps to do, we will increase the effectiveness of our current set of platforms in a faster and more robust way than can be done just using the physical attributes in the physical world technologies.

We're going to keep doing all that, but we can actually turn on an afterburner for mission capability for our customers by accelerating those digital technologies into our space, and that is our strategy. The benefit of that is, in addition to having a more effective national defense at a relatively efficient cost is that it will make our platforms more attractive than relative to other OEMs platforms, because we intend to build the architecture first with pathfinders with some of our platforms and bringing others as we get some success.

So that is the strategy of the company. It has not changed in iota, but our capital allocation strategies had to change because of dynamic situation that we find ourselves in externally. And our M&A approach has had to evolve, because there's not that much supply out there in our industry as far as acquisition candidates of any scale and the regulatory environment is also shifting a bit. So we're shifting with it, and we're saying, OK, we still got our baseline strategy, 21st Century Warfare is where we need to end up down the road with our customer.

We wanted to get there partly through acquisition, like Aerojet Rocketdyne and i3 to get the technologies mainly in the physical world that we need to move those things forward. But the M&A window isn't that open right now for valuation, availability and regulatory regime. So we're just being and doing the things that you have to do when you're running an actual business in the real world, which is be agile.

The one thing I want to add to that because there may be some misconception about, Ron, thank you for the question, by the way, it opens up. I want to make absolutely clear that our M&A approach does not and has not included the acquisition of major commercial technology or telecom companies. We're not trying to become that. We want to use their IP, their people to accelerate that kind of technology, that digital technology into our world.

So our approach is to partner with industry leaders in those spaces via commercial agreements, licensing, joint teaming and participation in standards bodies to accelerate those capabilities into our technology road maps. We have no intention of acquiring and merging with any of those major commercial sector companies.

So yes, you got to be dynamic and agile when you run a business this big in the real world, and that's what we're up to, and we still have our target being the path finder toward 21st Century National Defense.

John W. Mollard -- Acting Chief Financial Officer

And Ron, this is John. Just to pile on to what Jim said. He's done a very good job of articulating the strategy from an external perspective. But as a guy that's been with this company for over 30 years, what I most see and resonate with is how Jim is actively changing the culture across Lockheed Martin internally to embrace any kind of innovative technology despite where they come from. We've got a lot of really bright creative scientists and engineers, but we don't have to invent the solution to every single problem. And historically, we struggled with some level of not invented here, which is probably may come as no surprise to some of you.

So what Jim has been stressing and our team is getting is we need to identify and partner with whoever does have the best solution in an industry agnostic manner. And I think we're doing a pretty good job of that in our Ventures investment fund where we're going to start-ups and seeing the art of the possible, we're starting to get pull demand from the business areas for some of these technologies, which I personally view is a huge step in the right direction. And he's driving that mindset, the openness to technology across the entire R&D and engineering community. So I haven't seen a change, and I appreciate the direction from an internal perspective.

Operator

[Operator Instructions] And next, we will go to the line of Myles Walton with UBS. Please go ahead.

Myles Walton -- UBS -- Analyst

Thanks. I think certainly, the markets looking at the '22 cash cut in particular, and John, I just want to clarify something. So the $1.5 billion of supplier advances that you mentioned you hadn't planned on, are those net from -- in other words, are you suggesting that the prior guidance included $0 billion, now it's $1.5 billion. And so pro forma the prior -- the move from the prior guidance is operationally toward $1.5 billion?

James D. Taiclet -- Chairman, President & Chief Executive Officer

Yes.

Myles Walton -- UBS -- Analyst

So then is '23, $9.9 billion?

John W. Mollard -- Acting Chief Financial Officer

So let me make sure we're track. And the prior guide was $8.9 billion and $9 billion. Today we're doing $8.3 billion and $8.4 billion. And in that $8.4 billion there's a $1.5 billion that was not there. So we're up $300 million. I'm telling you today, our $8.4 billion is going to be higher. We will be higher than $8.4 billion in 2023. We -- depending on how much we still have to accelerate in 2023. And that number can be anywhere from $1 billion higher to $100 million higher or $200 million higher.

So the punchline is, if you think about the two years '22 -- '21 and '22 were ahead, depending on the outcome of where COVID is, in either '22 or '23, could be equal to or slightly behind the prior multiyear guidance, if that makes sense.

Myles Walton -- UBS -- Analyst

It does. But I guess the other question is these are advances, so they presumably rotate back to you. So that's why I'm asking about '23 and beyond would be fairly [Speech Overlap]

James D. Taiclet -- Chairman, President & Chief Executive Officer

So you don't get the full benefit of $1.5 billion because there's a roll off, if you will, quarter-to-quarter as you go through the year. So there's some subset of that, as John is saying, depending on the music stops. We'll be able to then elevate the cash flow we report because we didn't do a quarter or two of the typical flow-throughs to the supply chain. That going to be the whole year.

John W. Mollard -- Acting Chief Financial Officer

Yes. So just to make sure we're on 100% the same baseline. The old guidance was $8.9 billion, $9.0 billion and $9.1 billion. Today, let's just use a baseline $8.3 billion, $8.4 billion and $8.5 billion, that's down $1.8 billion. And if we're at $8.5 billion, we've got over $1 billion of assumed advances at the end of 2023. So you could say notionally, where we're sitting here today, over the three-year period, we're down $800 million, and some of that is driven by what I have now assumed in terms of we have an internal term. It's funding that we -- or authorization spending we do in advance of contract turn ons. Based on history, there is a high likelihood that some of these programs when they shift from development to production, the customer funding profiles aren't going to align with need dates. We are anticipating that we will be carrying a substantial amount of costs associated with that transition.

Myles Walton -- UBS -- Analyst

Okay. I'll stick to one. Thanks.

Operator

Our next question is from Cai von Rumohr with Cowen. Please go ahead.

Cai von Rumohr -- Cowen -- Analyst

Yes. Thank you very much. So Jim, I'm a little confused with the kind of capital deployment you talk about spending an incremental amount in terms of IR&D. You're going to increase the dividend. You have less CAS recovery. You talk of $6.6 billion of stock repurchase. But if you do AJRD, you can't do any stock repurchase unless you really balloon up the balance sheet. So what kind of a balance sheet a net debt-to-EBITDA ratio are you looking for over this period?

John W. Mollard -- Acting Chief Financial Officer

Kai, it's John. I'll take that. If you look at our operating cash flow and free cash flow, our net debt retirements over the -- I'll stick to the first three years of the plan. Our excess cash balances would allow us to do the $6 billion we're talking about and still have enough liquidity to run the business. So that's point one. This $6 billion is just deploying what would otherwise have been set in my bank account earning 25 basis points. That's point one.

Point two, with AJRD, our original expectation was we would probably finance, call it, $3 billion of the $4.5 billion and use cash for the other $1.5 billion. I'm leaning now toward, especially given how low financing rates are, maybe financing the entire acquisition. But kind of more broadly, the way I think about acquisitions, and I know Jim and I are absolutely in a 100% violent agreement on this, if you can find M&A that has the right operational fit, the right culture fit and the right strategic fit, M&A pays for itself. I mean it's free. You have to finance them upfront. But if it's a good deal, you're going to get your money back very quickly. So I view like Jim does, M&A is not a drain on your balance sheet. Our balance sheet, as you know, is single A. Our metrics would support a higher rating, for A- for the two that do use the A- scale. Conversations I've been having was it's hard to justify why we're an A- instead of a flat A.

The punchline is, we've got a tremendous amount of firepower. If, as Jim talked about, the discipline and dynamic capital allocation process says we need to put additional resources in here there or wherever, we're going to have the ability to do that.

James D. Taiclet -- Chairman, President & Chief Executive Officer

And from a leverage perspective, we've got upside. I mean, we're -- we've got a strong balance sheet. I really tried to emphasize in the prepared remarks that we see tremendous value and share repurchase at these pricing levels. We will go to the capital markets to get the resources to make the smartest capital allocation at that point in time and we'll manage the leverage as we go. And we can do it all. Everything you said, we can do it all and maintain a reasonable leverage ratio, I believe, and a strong credit rate. I also -- John also believes.

Operator

Our next question is from Noah Poponak with Goldman Sachs. Please go ahead.

Noah Poponak -- Goldman Sachs -- Analyst

Hello, everyone.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Hi, Noah.

Noah Poponak -- Goldman Sachs -- Analyst

I guess I'm still trying to better understand how much of the growth projection shortfall versus what the market was looking for is end market versus Lockheed programs. And I know, Jim, you kind of talked about there being multiple puts and takes. But ex-AWE, I guess, you're saying a few years of flat revenue to up low single-digit growth. What do you assume -- are you assuming that's what outlays are doing, putting the '22 authorization specifically aside? Is that what you're assuming outlays are doing? Are you assuming you're worse than outlays? And then specifically at MFC, what's happened at MFC? Because at one point, the growth rate was high, the company was saying, good growth was sustainable that there was really just capital and supply constraints. Now it's down in the quarter and you're saying it's down next year. So that seems to have changed a decent amount.

John W. Mollard -- Acting Chief Financial Officer

Hey, Noah, it's John. I'll take the question. I would characterize the '21 to '22 headwinds as maybe being unique to us in some regards, although companies have a lot of exposure or had a lot of exposure to Afghanistan, for example. They may have similar headwinds. But I'd say the '21 to '22 headwinds are maybe confined to us. But the out-year growth, I think when I looked at the last track on the President's budget, the growth rate was like 2% a year, out for government fiscal year '23, '24, '25 and out. I see that as a center point. Again, if we're able though to prevail in competition, I see a path for us to grow faster than that rate. We need to perform on our programs. We need to deliver helicopters and airplanes on our committed schedules. And if we do that, I see upside to the 2% growth that's in the President's budget.

James D. Taiclet -- Chairman, President & Chief Executive Officer

MFC more specifically, there -- the PAC-3 production is going to go up, and we've been investing in that capacity, as you know. But it's going to go up a couple of hundred million dollars. And then again, if you do puts and takes that special ops logistics support program itself was doing [Indecipherable]. So in NFC, just that one program takes away all the PAC-3 growth year-over-year into '22. And then we had probably not as well known, but for MFC a significant cancellation in the U.K. There's a Warrior armored vehicle program that was canceled by the U.K. government, and that was another $100 million downdraft. And then that is sort of tailing off a little bit too now in production rates, not much but another $100 million.

So you really have to dig into the details in each BA to see why '21, '22, '23 effects are happening. But we really are focusing on 2023 plus, so to speak, or beyond 2023 because all of these programmatic effects will be known by then. We've got those four big areas where we assume and expect that there's going to be material upside. We'll understand that way better at that point. And then we'll have some of those new starts that we -- if the competition stay on time, we may know some decisions in those two.

So yes, there's going to be some puts and takes of Lockheed Martin specific the next couple of years. We're positioning ourselves to weather this period and get through with a lower share count materially, I think, lower share count by the end of it, and then a growth vector that has an inclination to it post 2023. And that's really -- our overall financial strategy is to work the share count, reward shareholders along the way and then an inflection point in growth is what we're aiming for. That's our goal.

Operator

Our next question is from Sheila Kahyaoglu with Jefferies. Please go ahead.

Sheila Kahyaoglu -- Jefferies -- Analyst

Good morning, guys. And thank you for including me.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Hi, Sheila.

Sheila Kahyaoglu -- Jefferies -- Analyst

Maybe just a follow-up on Noah's question. If we could talk about the shorter-term 2022 and 2023, because I do think that's what investors are focused on. What could be the potential element of upside surprise? You guys mentioned $8.5 billion of the portfolio is focused on growing programs like CH-53K and PAC-3. Is that what would -- we would look to? Or are there other elements that come in?

John W. Mollard -- Acting Chief Financial Officer

Yes. Thanks, Sheila. I think it's growth and opportunities across the big four categories that Jim has articulated. A lot of our potential upside in 2023 is going to come from programs that are right now in operational testing. Assuming they're able to achieve success through that -- those test programs, they are going to migrate into production. In the period where you still have an overlap between development and production, that's where you're going to start seeing some bulge. And that kind of transition ties into the discussion is probably extended discussion I had with Myles about if you look out to 2023 or you cume the three years, why you're slightly down from the last guide. I think we're going to be successful. We're going to need to bridge those programs to maintain their critical schedules. So we're going to carry a financial backstop against them. But there is absolutely no doubt the growth is going to come out of hypersonics, classified and growth in the programs of record. I mean Jim mentioned PAC-3 growing $200 million going from '21 to '22. In '21, we're going to deliver 350 ramps. We're going to be delivering 500 in 2023 and 550 in 2025. So PAC-3 growth is going to be very strong in that period of time and CH-53K really starts levering. And if we -- when we prevail on the future vertical lift programs, you will see an inflection point as well.

Sheila Kahyaoglu -- Jefferies -- Analyst

Okay. Thank you, John.

John W. Mollard -- Acting Chief Financial Officer

You're welcome, Sheila.

Operator

Next, we'll go to Doug Harned with Bernstein. Please go ahead.

Doug Harned -- Bernstein -- Analyst

Good morning. Thank you. I wanted to really go to two issues that I think are related. In talking about strategy and in the past, we've talked about JADC2 and a lot of the things you're thinking about long term, which I think of as important as platforms may be, is much more about systems, processing, software, sensors, comms and so forth in integration. But when I look at where F-35 is today, one of the big challenges there is an integration program, and it's been Tech Refresh 3 that I think by any measure has not gone the way it has been hoped. Can you talk about where Tech Refresh 3, the move to Block 4 stands today, what risks that may pose for F-35 rates going forward? But then also, if you extrapolate that and if I am to think about doing broader systems architectures across domains, how do I get confident that the integration capabilities you have are the best to deliver on that. So it's the combination of both the F-35 situation and taking that to a long-term strategy.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Sure, Doug. It's Jim. So I'll start with TR3, which is -- I'd suggest a microcosm of the larger picture, but an important one. TR3 gives you -- and I supply these jets, similar ones at least. It gives you a better cockpit display, more processing for data in the airplane and more data storage in the airplane. All good things for a 21st century warfare. Although they are not essential to be getting the journey and networking that jet more closely with other systems and other platforms.

So we are doing those two things in parallel, because I think they're independent. TR3 has also been delayed a bit. We're working with the GPO. We feel we're on a common schedule now. We've got some significant supply chain issues that we've had to embed our own engineers into our suppliers to try to get them to perform. We're counting on them. That's important. But it's not going to turn or defer us from our goal of really developing the F-35 platform to be the aeronautic cornerstone of our architecture for 21st Century Warfare because, yes, once TR3 is in, it will take another leapfrog up in data storage and data processing capabilities and networking capabilities, which we will add. But we're already demonstrating how to do that with a hybrid base station that we actually fly in a U2 that provides that connectivity today with the Tech Refresh 2 equipment on the jet.

So these things are related, but not differential or coterminous. They don't be coterminous. We will get both of these jobs done. And in the broader program here, what we've I think derived by working with our government customers so far and understanding contracts and things is that there won't be a overarching JADC2 of any kind. What there will be is in reality in this business, and I think in our customer construct, is that technology road map -- and this has been developed more since maybe the last time you and I talked about this, Doug. But is going to be a technology road map, which is platform-by-platform connectivity using open architecture set of standards and protocols that the whole industry could share. And we're going to be doing that one stage at a time. And what I want to do and I have to talk to our customers about at the most senior level is to provide every six to 12 months a mission capability by implementing this technology road map, mission by mission.

Now we've got 14 missions and we've got 14 technologies coincidentally, that we have completed three of those missions, which happened to be counter air, surface warfare and integrated air missile defense. We're showing customers those road maps and getting feedback on what platforms we should be tying together first and getting those sensors, decision-making command and control systems and actual effectors connected in the most optimal way every six to 12 months.

So we're moving out on both fronts. TR3 is, again, associated, but not essential for moving out on the 21st Century Warfare front.

Greg Gardner -- Vice President of Investor Relations

Thank you, John. I think we've got a little over our normal time, but it's been outstanding conversation today. I think at this time, I'll turn it over to Jim for some closing remarks.

James D. Taiclet -- Chairman, President & Chief Executive Officer

Sure, Greg. As I conclude the call today, I want to end by reinforcing our commitment to delivering long-term value to our shareholders here. While using our strong cash flow and robust balance sheet to do so, we are not shy about leverage. We're not shy about moving out with speed and with scale, as we've talked about. Similarly, and again, along the way, we're going to work hard and invest and advance our customers' important missions along the way. Those numbers that John threw around, $2 billion of capex and $1.5 billion of IR&D, they're not incremental. They are up from our kind of recent history, but they are not an incremental $2 billion and an incremental $1.5 billion, just to be clear on that.

So I just want to make sure everybody knows our approach here. We're going to be positioning ourselves for a growth inflection that we hope and expect to see a couple of years down the road. And by doing the share repurchase at the scale we're discussing and the time frame we're looking at, the per share valuation -- value of that growth inflection should be amplified. That's our goal here.

And thanks again to all of you for joining us on this call today. We look forward to speaking with you on our next earnings call in January. Thanks a lot.

Operator

[Operator Closing Remarks]

Duration: 74 minutes

Call participants:

Greg Gardner -- Vice President of Investor Relations

James D. Taiclet -- Chairman, President & Chief Executive Officer

John W. Mollard -- Acting Chief Financial Officer

Rich Safran -- Seaport Global Securities -- Analyst

Rob Stallard -- Vertical Research -- Analyst

Mike Maugeri -- Wolfe Research -- Analyst

George Shapiro -- Shapiro Research -- Analyst

Pete Skibitski -- Alembic Global -- Analyst

Ron Epstein -- Bank of America Securities -- Analyst

Myles Walton -- UBS -- Analyst

Cai von Rumohr -- Cowen -- Analyst

Noah Poponak -- Goldman Sachs -- Analyst

Sheila Kahyaoglu -- Jefferies -- Analyst

Doug Harned -- Bernstein -- Analyst

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