General Dynamics (GD) 25 Apr 182018 Q1 Earnings call transcript

Good morning and welcome to the General Dynamics first quarter 2018 earnings conference call. All participants will be in listen-only mode. Please note, this event is being recorded. I would now like to turn the conference over to Howard Rubel, Vice President of Investor Relations. Sir, please go ahead.

good and Chad, you, morning, everyone. Thank the to General Dynamics call. conference XXXX quarter first Welcome made our today company's statements forward-looking Any represent outlook. estimates the regarding These and to subject estimates some are uncertainties. risk

company's factors like would turn Executive the our these information Officer, that, to to Additional over and and filings. With XX-K contained regarding XX-Q Chairman in call Phebe is I the Chief Novakovic.

quarter solid, are morning. my attractive. however, remarks and the in the particular. the in Thanks, relatively generally keep on results business Aerospace the pretty to Howard, somewhat I and I since intend spend and providing good comparisons more segments, straightforward, brief color and performance will, IS&T time around

operating net diluted million. the of excess revenue $X.XX earnings we earnings over on billion, in of billion, $X of earnings For slightly quarter, $XXX and per share somewhat $X.X reported of

standard of you give adoption for purposes about are the restated quarter costs. to retirement with benefit reference accounting XXXX-XX I'm numbers the XXXX All the first the presentation comparison update to for of with respect that to of

compared The quarter It XX.X%. of very over was stellar prior or good quarter. did of $XX million favorably or in margin earnings XXXX, and XX.X%. $XX the quarter to operating the up X.X%, X.X% were quarter compare not to year's revenue was down So at the first operating first million year's but was last

or X.X%, $X.XX the EPS strength higher than expected other remainder earnings taxes. $X.XX beat or were estimate the that net the $XX operating We at margin, a half was form than came on hand, better quarter tax lower from better the that in million, the a than million year-ago expected X.X% rate. of On was $X.XX consensus. for lower and $XXX and of from operations $X.XX of income than of provision up about

for some additional let provide granularity you. Now me

Aerospace X.X%. groups was The the X.X% Our of growth as true of group. of be the grew earnings. revenue the the The grew Aerospace $X.XX would basis million were was consistent than growth contraction $XXX in earnings or three appear much XX.X% discussion businesses by million. demonstrating consensus. the guidance XXX to higher a Each or naturally or somewhat was over a quarter. very Revenue the XX%, on on posted pretty or revenue will lower These margin. that down quite segments to year-ago defense in $XXX believe across what million leads It in with our Defense earnings were both earnings were same Defense board. Aerospace and earnings billion point strong quarter over and and respect anticipated and but million consensus. segment's This $XX $XXX was strong earnings million with on revenue our down period, earnings Defense revenue $XX year-ago we

Easter or for difficult orders to the of orders deliveries had In the a delayed of deliveries for timing was customer. In for the first typical It If also plan in could during week. were said additional that delivered loaded GXXX revenue we of deliveries. first which revenue, we the well more remember be a The group It will for deliveries half. kind problem the planned caught special They week. Nevertheless, reasonably to with and is of for quarter. on simple those is have up. scheduled changes. plan Aerospace will Orders to on earnings second GXXX be were to same on GXXX. was had aircraft slightly modestly of It and in of XXXX April. is as our average quarter, behind book-to-bill consistent over been what fact, back-end a were two and managed of The completing delivery expectations. the deliver billion, bookings last for May through $X.X planned, first XXXX. customer quarter, right for years quarter the would allow GXXX the the the and quarter, in in revenue with were about work book-to-bill The during first deliver ready with mission but The about GXXX have the of This $X.X in X.X. net a quarter week we we dollar-based during convenience that seen were is was consistent two billion, a Aerospace five X.X-to-X. the the ahead

was more strong with quarter been a caused a of very not has a and who North Show I has that in It Air activity quarter. discussions a to good It in strong the fourth the that Aviation was the normal evidence with sales growing discussion. opportunity replenishment. note stop. of in The Europe. should set interest was were America jets from pipeline media any our business talk it part of reports April, Business So people Asian of strong Chinese cycle after on attended also deal tariffs the

near-term the it Chinese note sales after fact, into tariffs GXXX to and few years caution, optimistic entry four development, are than to the final service activity. respect and a EIS of Other In mature, original our continues closer we to be certification With this will may believe we market of activity. that the question that months ago. about only announced summer have The customers resolved. stimulated some our moving product

simultaneous know, you certification and have As we FAA EASA pursued requirements.

we meet GXXX and program time, us. behind developed have now now This has to added coupled requirements. total tests, outstanding our completed produced which is work work with We results. supplier the to This program GXXX component-level testing range enhancement key but regulatory the expanded configurations as

have flights elevation. known We high recently for field completed into icing tests and

program document have the submitted the begun To of then the testing, have reliability function by portion last The will will date, function certification flight to flying phase We The the we program. for to the testing final XX% XXX-hour and final as our the FAA. documents testing. and FAA known of review. shift reliability complete of approval

or We expect certification in June July.

later with to in plan and aircraft touchscreen August We this our training GXXX control deliveries commence on will exceed begin planned with displays, XXXX technology and fly-by-wire remain new expectations. our FlightSafety continues active pilot This to meet sidesticks, We deliveries. customer year.

As XXXX. we The in up progress half closer certification these to GXXX X,XXX is wrap all from hours. testing GXXX of will certification, our logged second its than the of more benefiting efforts and has

We the XXXX. will deliveries of GXXX in begin

remains Our with in growth at very margins. service business the Gulfstream strong and nice strong, quarter

solid. Second quarter is loading

helpful the to Gulfstream announced concluding billion look It's where in Jet very a acquisition Hawker for revenue. forward the have We expect year to Jet annual Gulfstream strategic performance business, in does Pacific it which for places this and recently support standalone is of $X We for solid not in in Aviation. facilities. acquisition simultaneously excess

quarter, With of the battle readiness, respect with the to This main let at $XX down earnings up U.S. which X.X%. the major the one the in of operating point the XX.X%, the or of Abrams performance million Compared the contract revenue very Now margin. XXXX, XX was starting were quarter group demand this a but business, strong There Combat turn were businesses This continues has Sequentially, million, end fourth across related particularly strong includes on was the million revenue deliveries to billion down comparison the Systems. side Defense largely a Army upgrades on or operating earnings sales to a is operating $XXX board of always difficult improvement tank. group. basis million at to $X.XX weapon first to the $XX basis. and platforms, only within and year. environment, $XXX significant fund million of our $XXX a Stryker to three in me each were up

of throughout for have We our Europe business products, funding seeing both parts internationally. domestically are our order and also increases and nice into to in European-based continues munitions Africa. Internationally, activity

backlog, still quarter all, large $XX X-to-X. nice against fourth XXXX had only order $XX Combat they activity at quarter Funded Combat's the million strong $XX.X extremely was the once of against year-ago of performance in of in quarter, million all the Systems. down operating billion backlog and again Given

$XX with million was X-to-X. relatively the consensus. quarter The so at and quarter. I particular IS&T, in once so than has pretty to than to same the down $XX up forward-looking is be assistance a million some that perspective. think and numbers of make That At were new for up $XX you. the These we is million backlog it revenue were to some up good about very X.X% to followed of is in Turning total to results year. sequentially. sequentially, and had million against or business of Funded Jason do you consistent year-ago that then the of earnings year-ago Book-to-bill format. again the ask the constant operating $X.X to $X.XX group, the better both Operating XX% margin was quarter the start last backlog is will give this more $X.XX million year companies report year-ago billion. this billion, here, IS&T a Earnings will IS&T from X.X% over suit. individual be going statements you we year-ago $XX against million $XXX the make or quarter. billion $XX past remained the quarter quarters.

earnings the the Mission $XXX quarter revenue, going quarter. operating XX.X% of of $X.XX given earnings X.X% me margin operating the Jason revenue businesses, of the the quarter. I'd and for Systems that of At about each of on GDIT everybody dividing to forward. separately million, let interject revenue billion, the of an the reported you the comments up the get in of comment had $X.X and some earnings, year. be help and which will like in to to then we and Now IS&T, margins GDIT operating point, down businesses for CSRA two turn on our same this in $XX on million, had of the made of January IS&T operating guidance each into to operating impact had page, for operating in break margin billion,

two the businesses we'll GDIT, the guidance report in Systems To to the of separately. starting comprise discussed, about Phebe IS&T think let how we year. original you start you how As Mission the give quarter, and with for sense businesses, gave those for me IS&T a that, second

to that while $X.X of you of between margin range, range and is X%. revenue around of XX% a revenues, the billion For range Mission billion more $X.X From than IS&T of $X.X approximately perspective, margin the GDIT to about the the Mission a in single-digit and XX% high full billion, think $X.X in we Systems forecast. in rate billion GDIT with can billion, slightly Systems $X.X represents around year, those XX%. expected half

X, April so a with have of So for the impact company. as combined that three baseline, does quarters We we'll the CSRA with on GDIT the closed year how year? the transaction

But this be after We compete impact we'll to expect in of to earnings CSRA add second better breakeven amortization, will charge quarter. on will in approximately EPS to purchase line quarter third our per-share the level, and allocation year. slightly the $XX have will one-time cost outcome The GAAP approximately call. that the our margins associated you quarter, the at price the quarter which and sense starting our the accretive item of expect and second assets as we that a the bottom depend to to of on GDIT be and billion $X.X macro sales transaction, be taken discrete a this which in a intangible million to with for resulting the the company's report combined

Jason. Thanks,

Marine Finally, let's was $X.XX of against or $XXX Systems. up year-ago the turn to X.X% billion quarter. Revenue million

a in $XX three of XX.X% up the quarter was $XXX increase first million each XXXX. million, shipyards. Earnings revenue against Importantly, or the were

continues is story, quarter like first The improvement down in operating margin, million, billion. by backlog XXXX. is story revenue or billion three point its the The all DDG-XXXXs down strong a on a billion This into up class to is full orders is the ships. in are earnings NASSCO and a delivers the driven Just the XX earnings up sequentially, forecast performance curve revenue of strength was to Sequentially, Columbia its XX.X% on submarine. and Navy the in backlog its begin ballistic-missile over Electric strong. on submarine, ship the phase but XXXX. were million on construction deep XXXX. quarter. construction at strong for Total were commercial is $X.X shipyards. early the the three a working here XX engineering $XX Bath of work in material up The purchases backlog down million learning second final restart basis on margin. in was X% this of began DDG-XXs each Boat last DDG-XXXX $X.X $XX earnings we but very We to basis $XXX Virginia-class $XX.X XXth on operating X.X%, point in over performance improvement delivered first is its year yesterday. support funded on the and continuing Columbia, of

So the to good year, off expectations. somewhat to a our company start of ahead is very the

ahead full our our of a are be We that a good to our we was practice midpoint Suffice year. the the It plan received should building of review which the not end of block guidance a quarter first quarter. The of as a as change is the it do at upon guidance give to expectations you the first a bit practice based. year. say to of constructive operating

to to turn improvement for our to work taxes, results. will improve call consolidate about continue our like back we always, additional the Jason pension, and and I'd cash. to now strive As remarks to

Phebe, morning. Thanks, good and

The First, on was income expense. statement, rate of in first $XX the a slightly debt we the starting refinanced million with couple XXXX. year. to quarter due increase late the the on interest Net versus expense interest higher $XX the was points quarter last million in interest

income of we on light contributions of finalizing we reform. or compared impact are approximately XXXX from expense operating geography of amount of fourth the pensions, $XXX the on adoption on This to the fixed-rate in had this minute. report additional earnings note $X.X year, year more our reflected But drawn on go now income our the the a the quarter, in quarter expense. this for in million that Phebe pension You'll million was new pension we addition I'll billion pension that were planning before $XX make call to to to our by year. in subject reflects new the point in quarter One on to, million expense $X to our we and had quarter. the $XXX income for tax billion This alluded quarter reporting. just the rate $XX considering the income $XXX which commercial year. this That was cash That's notes other We increase nothing see contributions noted analysis, of of benefits more standard more a a statement, end effective rule modification comparable anticipation aggregate adjusted point That first acquisition. outstanding million. up XXXX-XX, been you of of no portion our in XX.X% After last with impact there, the ended will, of our expense pension the of CP quarter I the of in the requires in have statement, the expense. at the one original forecast, million tax income course, with touch and of non-service the of CSRA which accounting other us we in and the making ASU cost the afforded is than a numbers what of recent paper plan

tax timing While anticipated tax in the stock rate and benefit. our the quarter the that on was associated our full-year based first of guidance divesting restricted guidance was rate of lower XX%,

forecast, So which with is the lower tax consistent remains rate XX%. in our the full-year quarter at rate unchanged

up year a XX% for the first higher the with full for to course, balance year. rate XX% lower rate, than Of can you the quarter the impute with end of slightly

spent and of the cash front, common commercial including flow steady. borrowings $XXX our short-term just with X.X the free billion in hold cash anticipate shares acquire We position down $X.X balance remaining acquire dividends balance our deployment used earlier. billion, ended mentioned quarter. paid on the we CSRA. I stock XXXX enough billion of sheet our the million to of debt paper shy plan of We in pay count $X.X shares Otherwise, repurchase quarter and $X.X On to $XXX million net in capital a of a to to our to the we million deploying share

cash, the reflects used customers This in of pension we'll suppliers guidance additional that I July. of earlier, and the Howard, for you from when roughly it our course, full-year of discussed subject of and operating contributions in the our and affect addition for for over our more granular update the two activities which quarter. sense cash cash of I'll from the timing of which you operations, turn concludes On back to million give Q&A. full-year my remarks. payments CSRA, $XXX doesn't remains but unchanged outlook the we

Thanks, Jason.

a we As to only everyone participants question, chance ask reminder, has one to a that ask so participate.

have into you remind Chad, queue, could If the participants how just you queue. to the back get questions, additional enter please please?

Certainly.

comes from Carter go Please Research. ahead. The first question Copeland Melius with

Hey, good morning, all.

Good morning, Carter.

the margins quick a Just quarter. on in question the Aerospace

the given is got bit that note or the terms should GXXX, expense consider expense we there (XX:XX:XX) on of R&D on in work and Just anything additional we little concurrency there? a going you've intra-period should of

so quarter improved services cabins. Yes, due margins a the sequentially was down net to in R&D somewhat driven couple our XXXX. productivity in large things, mix had the in quarter our and We from Gulfstream, at fourth of margin were by of

you very much. Thank Okay, great.

next The Please of from comes question McConnell RBC Matt ahead. Capital. go

morning. good you, Thank

morning. Good

that that little decline couple you what of be deals in a revenue you're would year-over-year what for billion, three-quarter seeing guiding that So the there. organic correct in share I been the a versus to CSRA it just business? contribution did down the a have Can they period, plus bit And Am like comparable would of CSRA? in CSRA growth, be in $X.X that period year. small looks about they've a the bit prior

parts the a moving in There couple of there. are actually

believe do little business that now. discussed we have, a First, happen divest we're bit the and of in process of got we've of, OCI to making I before that we've and

take line that So will number a out the little top of you're referring bit to.

ending is, on element year other CSRA was XX. a course, of fiscal The it of March

at of if their its was fourth you the pattern look So quarter. revenue, it their at in peak

year's we of that them So went their first nine about and of year the they when talked full of that first plus the year. next months we'll quarter have the year this about talked guidance next guidance,

their heard revenue that the projecting estimates So in on them. from when seasonality you we're numbers you normalize curve, the are previous with for right

thank Okay, you.

from will question Barclays. be Strauss David next The with

Good morning, thanks.

David. Hi,

ask Phebe, guys upside looks like your budget. Hey. might to baked for longer-term in for that the I Combat relative particularly budget were programs Army well on you the of wanted fiscal to Can much U.S. thinking It you the funded, that you don't key you you about because talk about saw your Thanks. recapitalization? XXXX Systems mean were what the side. think had for Combat I what there in all and forecast

that Actually, see the upgrades platforms, Stryker counts, given so to anticipated both and then readiness to had major we we OTS close we're in which our in line, and their munitions our funding our customer, increases, Abrams.

So had budget there on deliberations insight was and planned into in early no get We we the particular beyond had accordingly. what XXXX surprise relatively anticipated.

funded doing we're consistent in So quite what Abrams exactly anticipated, well, you what particular Stryker surprises, want. budget in is the which nicely we real with and no and so are and

ahead. will go and with Company. Cai Cowen von question be Please Rumohr next The from

Yes, much. thank you so

initial What that year? we because And doing deliveries with as it assume completions remainder Phebe, And are six to you So, that mid months you the completions the take the what, approaching the customers to flying you that cert so takes, Thanks and late And secondly, does for for until completions. see now to likely that pick you you're cert, GXXX means can much. before you? orders four said the the with talked receive problems you've quarter the start the the I in all problems imply up fourth in wouldn't cert. of about caused. the past, the

that not case. made a a run was FAA repeated considerable We the that number built to our changes to aircraft different airplanes very Having had the we've mature had fair been regulatory green original was program. make. the GXXX That here. we manageable. changes through has and of had This pattern all of have all a tests, So frankly,

the order over on to to activity the GXXXs on some to well go service cert frankly, in nice. So we to the where We'll minor a and, that the very GXXX. close has ready GXXX GXXX with in that that and respect don't only in from delivery, case. had we'll that with quite been this changes delay be timing, orders manageable we got our we've on XX deliver. We're and Frankly, expect

right? the They be will backward-loaded, second off fourth quarter. pretty the really but deliveries half, line, think quickly our come not So coming will the all

Yes.

comes Shapiro from with next ahead. go question Please Shapiro The George Research.

not less for we you Phebe, can given going or Thanks. that been at you bit later, a somewhat deliver update GXXXs see as deliveries deliver to year you But are had little would Now Gulfstream? much? saying GXXXs. is less few going the to a GXXX still the

We're in all. build our of not the midst at plan changing

have number preferences. GXXXs on really zero delay that we range, couple from our be in anticipated. off has same We're forecast not one the had We our exactly GXXX, month our certification deliveries. of had on moving The that depending – maybe or deliveries no impact in the for customer estimate of we've XXXX. two, right original had We'll of

you. Okay, thank

Next with up Baird. Peter is Arment ahead. go Please

and Thanks. Good Phebe morning, Jason.

morning. Good

Gulfstream. update could you on a sticking just question Maybe I Phebe, guess us. just

demand. any quarter. between You this some Maybe end us first what just give reform. you're of and highlighted color strong differences planned fourth international? maybe order you quarter, in four or on domestic months into activity exactly on we're what the and Are you a you've But had had that you seeing tax seeing terms five for really

Sure.

in accurately certainly that So quite has I nice, tax think is Gulfstream reform and you the demand quite helped. posited

a activity in strong impact North cash We to But and our fleet us. number of as customers incremental benefit have long-term tax very their the strong the flow all America order well order our to for Europe, as way. North increasingly so replenishing American we frankly, reform; salutary from factors, by attribute activity in

The Pearlstein Wells next with question comes Fargo. from Sam

morning. Good

Hi, Sam.

a about board, it's inventory, whether was talk receivables, flow? the know unbilled, delay is timing. it How like But free Can much little flow you seems seemed cash across some it GXXX the bit mentioned And would XXX% I higher know there? you ex to if the can pension. talk be cash, how lastly, pension, we higher still CSRA in about If that helpful. the you conversion? And the impacts cash get payables, I you could of weak.

Okay.

think respect the that, is the frankly, forecast the capital for the is Part of we a plans. you. our continued payments quarter, But bottom within cash profiled the outside to gave I out, quarter quarter. build It's softer at We originally first timing. pointed in original variety anticipated year So line nothing Gulfstream. a you with more suppliers this is that as to accounts, really outsized of from was largely or again, the payments the it customers it's and working nothing of than but

is the the there. billing system of caught has April, course of the already par on catch-up, in months had the We first all a a so of unit a we're have in up expected did So implementation and track business and year. that that caused in for been three that everything month back we

the cash about very feel I good we you. gave forecast So

think XXX% we flow metric. it's about, as really percent a cash of how conversion relates of it of But free going Because to about to a pension and growth As as income. constructive talk That the of that's it cash growth and it's a number company. net talk is company, don't contributions, I conversion the then our the of point in think operating talked in about. more interesting cash in to a we're that the metric investment to we operating strength this deploy period for in terms about

had finer details the their modeled will closed year. everything So the finalized. accretion to be a out better our our of still we're generation than suffice looking have to now, to think what came through now working implications CSRA to cash and plan it nicely factors anticipate obviously business the valuation remains There's and We've I for that is closing that. we due cash we said, the consistent as we deal books But so right about from of the contribute number CSRA for be three an operating with forecast from on when original XXXX that say diligence. in that of standpoint. weeks, fiscal I

So feel I this contribution about the make they'll bullish year. for us

Remember, one have conversion, buying add liking will CSRA services IT services of cash for it. our IT to rationales and nicely both strong and is CSRA very companies that

Thank you.

America is Bank question from next with The Ron Epstein of Merrill Lynch.

morning, Good Hey. Phebe.

Hi, Ron.

for A quick It have program delivery supply guys. difficulty question need struggled the Could your been you GXXX chain? suppliers expand you on the the all of that the for you. has for seems some meet you like to in targets at on what

will issues chain. few discuss I our key suppliers. any suppliers' with very not our We've of supply had

do chain that got suppliers that. their will the on you color managing our a UTC think I have call and from done some yesterday, supply good to but job continue

fleet. as on geared perform So new existing as nicely airplanes to frankly, our supply expected well our air our to continue support on deliveries up our chain is

So forward from is stable? you're here comfortable that everything

enter going that. thereafter, into are. as long told GXXX, to service, supply and to the we chain the I the Yes, and you, We're follow on GXXX not supports

great. Thank you. Okay,

Suisse. morning. The (USA) M. from Spingarn - next LLC Robert Credit Robert Credit Suisse Good Spingarn with question comes Securities

with Navy of milestones recently, M. suggest on remarks, yard the Robert and operational you the mentioned still to some Bath that noted prepared your (USA) on some Phebe, seems destroyers one the in morning. this Credit progress So, you curve. Spingarn Suisse your briefly and there Good LLC But up is Securities upside. - the learning

continue detail you if how So might you DDG-XX. learning I from could mature curve the as benefit that, how Flight III progresses from was especially here give and to on some the margins the on more wondering us

Sure.

the performance excellent program the So been ship-over-ship margin has quite DDG-XXXX on nice, with learning.

number Our hull-over-hull. improvements restart, of Flight the plan, have continuing to with has we learning in proceeded according the a see to our starting are on And performance DDG-XXX, on still queue. and and IIAs the we

the Our papers. which the continues the contracted and well. year, manufacturing again, Flight apace. appropriated detailed last And our the We're stages work late of go us early work continues we nicely to got on design and very with III, learning on hull in

there shipyard which some in we're But largely well platforms issues, really to are Spingarn way - are that a what past. is it? you comfortable we back from where that forward line we about after behind look do Credit us legacy and restarted once we quantify talked dead that continue Marine Robert M. to for stop. go So Suisse is going as what yard in had want margins LLC we've any us, like has got (USA) on Is to would that the Securities

complicated then be move going got be full our of from phases increased you've through our we duration construction will and early cost-plus That's because mix plan which the detailed Columbia, (XX:XX) period engineering into of construction. design into next to and an the a in question as the and weight

the of around, Columbia. depending any the and say So XX% between a cost-plus given middle it. of going to our margins on bop the It's X% and in on I'd quarter, are anywhere mix work

precisely quarter, you. LLC we doing said, - M. that (USA) quarter better Thank Securities makes So improvement. Credit and shipyards Spingarn our dwarfs that. is That that after Robert to incremental get Suisse expect rather sense. Okay, Bath

Our next with Hamilton. question Skibitski Drexel comes from Pete

morning, good Hey, guys.

morning. Good

you of the and of Nuys, Savannah service continued the quarter the Hey, you then either during into center talk expansions a Phebe, Aerospace's I bunch after, aftermarket? more Hawker jet biz Van and drive deal. announced can about course, Appleton, think of in

market jets, to Just this accretive seem dilutive overall And just own Aerospace wondering, strong? you is more access or moves to are two, or the get to really these margins? number guys trying growth does your

service You in mean business general? the

Right.

it and Okay, our us fleet so has increase our grown is customers. look, increased, hours have upon flying our services as to to incumbent

Our customers it. and expect implied Gulfstream Gulfstream with excellence and service service, we're the delivering

the a we growth talk and any margins our loading – just may as mix. service service be – continued that the And frankly, a service really second the margins the increases. they slightly are fulsome. anticipate at things, the airplane given market margins, And quarter, number to So for on depend at new about in dilutive let's while centers of fleet on Gulfstream very

like fair continuing satisfy a customer it tends needs. around And it's this move So our we to key amount, business. but to really to

and again footprint, support expand capacity, outside capability. added an we're So States, Gulfstream's doesn't Gulfstream have Aviation, the to have expand to accordingly. United With expanded respect it it where service we to going particularly Jet existing

the facilities, and in maintenance over So acquisition, case the XX of feet we XXX,XXX hangar six space. added of square FBOs, Hawker

the our this so is a from in I support business. flow, service aircraft think perspective. very I that Aviation, cash if attempt increases, good is our and margins risk we're this nice it again, fleet and like Gulfstream By doing quite you And about all services and think is sales So business to nicely all relatively quite because great deliberatively. way, low-risk as and Jet business low an that

Thank you.

next come will Harned The question from Bernstein. Doug with

good morning. you, Thank

Doug. Hi,

where the deliveries now you getting GXXX see that you to the and look close Hi. do You've XXXX the trending? going, GXXX see out. When Global next years I'm coming going, the few out. interested coming over that got how we're you demand then GXXX

as see those GXXX. your GXXX? for you Do got of an effect on rate having either your the You've

In but neither sales very instance. Look, much the attention been have GXXX I people's fulsome. airplanes, to other don't pay

in It continue and other the to airplane a market important and airplane that satisfied of market frankly by be of different the range speed space. anticipate can't that that terms And success will an has that completely We is in platform. GXXX any sell.

replacement about and thought think these of legacy airplanes mission. So each a GXXX different we kind our very as fits of one these GXXX, designed of airplanes and we the

think not an and all the for So GXXX. additive is issue this we

the you the outlook being stable do a few pretty next you over it as as then years – delivery here Do the see see line for GXXX? trend

consistent do. begin were on with a and and I conference told the ago. general you float, decrease we the on Recall, production elimination GXXX few GXXX, your then years will in GXXX years take two of we I the going at we next GXXX the however, cover to what out that think a we feathered the to few over deliveries low to, as rate line in the

Okay, very good. Thank you.

question of The Please ahead. Noah is next Sachs. Poponak Goldman go from

everyone. morning, good Hi,

Good morning.

as mentioned, that question your you Doug, XXXX significant is just to others, Phebe, up if on from on on and focus the you last that actually not competitor... portfolio recognizing want could own Global follow I pretty

to a seen. be is It That remains hypothesis. opinion. your In

question. my really That's

else's at into very I and look Frankly, our successful at our it's business we've airplane sell don't because market, anybody airplanes been to our that.

Right, so price and that's competitive that really Certainly specification my it a it looks way. aircraft? question. at Is just high looking range, level

the the on the And it be differences to than more them that I your they customers allow on different are elaborate to actually say what so appear are, surface. differences hoping can you drive what was could

that an now since service you years. Wow, airplane been five XXXX. have in That's has

be all date service Global a but in lost the have an to XXXX We for issue nobody seen Global whether we And XXXX. a single at to airplane. XXX else Gulfstream, not to competitor have now, it remains and is sale the is

effective proven can content. I fact But very, in is a again, to has think capability that set about worry hearts' the speed range matter So airplane the that unequal. you of this very all your and is with a

worry we so So the we for we GXXX. about and see, what good all what control

right, one for we more time have All question. operator,

Sure. that from question go JPMorgan. ahead. with comes Seifman Please And Seth

be Infrastructure] going Jason, for about not much to that Maybe bit ongoing or means done? a is related morning. you the very interest what is deal. deal Can Enterprise a little CSRA [Joint CSRA talk the the to talk and may the CSRA just may and expense good how you JEDI can And partly and about Defense few contract involved? potentially quick be what then, Thanks once

with will the traditional teammates happens part we But a milCloud CSRA as won our number to anticipates important at contract look be an of of teaming of JEDI. network. Sure. DOD conversion overarching whatever milCloud have with and the

in who all years, where see, We've live normal But "non-traditional" and within as we'll comfortable By I comes folks we'll experience set. with are. from been we're strong our so So got well today way, IT have guys us the we this out. place partnerships business our services for see the some non-traditional. the it in see as

next and see the all think sometime out. that out the months, is in couple contract how we'll I shakes due of

the once allow parameters And have That obviously us moving of we what we consistent to to will well there, gone that market on parts haven't for now, pin the priced give to we it that Right established interest the will you the occur within and factors rates to one that relates question be expense, of a do will more in part that's We that it's granular of market as of we're yet. sense of all terms out next And deal. down. seeing month. that, we're when pulse of our we the the the bottom-line and seeing the impact your the deal.

comfortable very where now. with right we're is So that

Thank much. you very

Operator, Thank joining you with if all for Thank can any the you end And today. have I that, questions, additional call. at be we'll us again. much you very reached XXX-XXX-XXXX.