NOC
#Sure, thanks.
In terms of Joint STARS, first let me start off by saying we're delighted to be able to team with both General Dynamics and with L3 to put together an offering that we think will just do an outstanding job of meeting the requirements and doing so in a very affordable manner.
So we're delighted with that partnership and looking forward to the competition.
The other competitors that have announced so far my recollection of that is both Lockheed and Boeing have announced their interest in this competition.
So that'll make it a very good competition and we're looking forward to putting together a very competitive offering.
The current state of play on Joint STARS is all public information.
The Air Force has indicated that they're planning to award a development contract sometime in 2017.
I think right now they're talking about towards the latter part of 2017.
And then play it out from there in terms of getting to production or production representative aircraft.
And then roll that on into production over the course of the 2020s.
So we're focused on two things.
Obviously we have responsibility and accountability for maintaining and sustaining the current fleet of Joint STARS.
But we're of the belief that the new program can move along as quickly and should move along as quickly as the Air Force can support it from a funding perspective.
And in fact we think the nation would be served well by moving it along very quickly because the technology is ready and it's a matter of integrating and getting the aircraft flying.
On TX, that too continues to move forward.
There we're delighted to partner with BAE Systems, and I think as you may have read a little bit or seen some of the coverage in some of the industry trades, we're focused on a new development type aircraft.
And we're looking forward to having a bit more to say about that in the coming months.
But we believe we'll be able to put forward a very compelling offering there as well.
I will tell you that the Air Force has been indicating, continuing to indicate, that TX is an important priority for them and that they're going to continue to be supporting that in their overall budgeting approach.
So we're looking forward to being able to compete on that and provide I think a very compelling offering there as well.
Sure, <UNK>, no problem.
At AS, I would say the largest driver for the quarter was unmanned in terms of top line what drove the performance for the quarter.
And then your second question in terms of in-theater, the biggest in-theater impacts that we see are at IS and ES.
And we project about a $200 million reduction this year in in-theater sales to I think it's about $700 million for the year.
And actually last year, the bigger piece of that reduction was at IS, this year the biggest piece of that reduction probably two-thirds is ES.
Just as the different programmatic and programs that they have in-theater are ramping down.
So that's where we see it for this year and $700 million is the baseline for 2015, and beyond that we haven't yet I would say put pen to paper on what that would look like.
Yes I think it's very possible that a shift in the environment may cause a variety of additional opportunities to become present in the marketplace.
But for us the question would always be value.
And whether or not any particular thing that we're looking at stacks up well relative to our other alternatives.
As I've said in the past, and I feel that way today, when I look at our footprint here in the US, I really don't see a big burning hole in our portfolio in some way.
And that therefore puts us in a position where we feel really good about our portfolio.
Our decisions are really genuinely going to be value-based.
And we really have to see the business case for something to makes sense for us.
So the thrust of your question was whether there may be more opportunities coming into the marketplace and yes, there may very well be.
The question will be, how will they stack up relative to other alternatives.
Well, I think you have to look at all the alternatives.
Clearly we've talked about our interest and our history on share repurchase.
We also look at our dividend, but we also look at investing inside the Company where we have a lot better insight into what the possibility of return is and we have a lot more ability to affect that outcome.
So I would ---+ I didn't put all the words into the prior answer.
I would add the word risk-adjusted return.
We really do think about the risk part of the equation as well when we think about overall value.
But as we go forward, we'll continue to look at what our long-term view is of the Company's valuation.
The answer to your question is yes, clearly our share repurchase program has been a big part of our success in generating value for our shareholders.
But history has not yet ended.
We keep looking forward and are convinced that we have a lot of opportunity on a go-forward basis to continue to generate value and we take that longer term view when we think about share repurchase.
We're not just looking at the price as of today.
We take a longer term view.
And that's served us really well.
As I said we've been at this now over a decade and our average price of repurchase over that decade looks really, really attractive compared to where we're trading today.
And we think about our share repurchase program with that type of very long-term view.
I'll take the first part of the question and turn over to <UNK> for the second.
In terms of capital, we've talked about the amount of capital expenditure we expect to incur in 2015.
We've talked about a number of around $700 million we think that's ---+ at this point we think that's a reasonable number of where we are for the year.
And given what we've seen publicly about the timing of an LRS award, I don't think that impacts us significantly one way or the other.
I would say that we don't provide guidance beyond 2015, but one way or the other as <UNK> mentioned, we do expect to be strong generators of cash flow, whether that's cash from operations or free cash flow as we project out beyond 2015.
And <UNK>, on your question regarding whether an outcome on LRS would change our perspective on M&A, let me get to what I think is underlying some of the questions we're hearing in that regard.
And that goes to essentially to the question of scale or top line growth.
And I'll say what I've said so many times in the past, we do not manage our Company on the top line.
We manage the Company based on value creation.
In fact, over the last number of years we've taken a number of actions that have very intentionally reduced our top line because we saw those actions as accretive to value.
And that's the way we're thinking about our overall value proposition.
So the question of if we're not successful on one thing or another and perhaps that means our sales are not growing as quickly, do we try and make that up some way with M&A.
That's not the way we think about it.
What we do think about is look at each of the alternatives that we see that are available to us in one way or another.
Stack them up against our priorities, stack them up against risk-adjusted value creation opportunity and make our decisions on that basis.
And that's the way we're going to be doing it.
Great.
That concludes the call.
I apologize we didn't get through the queue.
I will be in my office for anybody who wants a follow-up call.
And with that, <UNK>, I'll turn it over to you for final comments.
Okay, thanks, <UNK>.
I'll just wrap up by saying what I said at the beginning of the call, our team across the Company is absolutely focused on performance.
And that focus and commitment is really serving our shareholders, our customers and our employees really, really well and I'm very, very proud of what our team is doing and how they're getting it done.
We certainly appreciate all of you joining us on our call today and we also appreciate your continuing interest in our Company.
Thanks for joining us, everyone.
