General Dynamics (GD) 23 Oct 192019 Q3 Earnings call transcript

Good morning and welcome to the General Dynamics Third Quarter 2019 Earnings Conference Call. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Howard Rubel, Vice President of Investor Relations. Please go ahead, sir.

good everyone. and Rocco, you, morning to Thank Welcome Call. General Dynamics XXXX Conference Third Quarter to the statements today forward-looking Any made company's regarding outlook. the represent our estimates are estimates subject some and These to uncertainties. risks

company's factors contained these regarding XX-Q information in Additional the filings. XX-K is and

the my and our Officer Novakovic. turn Executive over to With that, to call it's Phebe pleasure Chairman Chief

Howard. morning. Thanks, And good

and million better year. continuing you we discern way, X.X%. enjoyed quarter from basis. operating attractive of $X.XX with results year quarters quarter By top-line revenue $X.XX We can of our billion the delivered reported from have ago for quarter year-over-year share, As growth a $X.XX share, consecutive second $XXX quarter revenue of quarter, than earnings net $XXX million. XX than Compared billion per per $X.XXX third the year the or operations to $X.XX press on release, earnings of better past this of share, EPS the ago we a and every up the was diluted

earnings. activities of we net the million leaving free respect of $X.XX difference cash than by was provided was to was and part income. $XXX flow the return With operating With our to operations improvement. respect million we our significant X.X% sequential Sequentially, of higher short, a had offset cash, $XX or rate up million operating rate This $XXX revenue forecasted effective consensus, XX.X% earnings offset lower were a items, higher operating million level. on had tax million. or the on margin and margins consensus, X.X% South-side. were XX.X% million points up operating pension EPS line cash below margin better continuing the or $XXX $X,XXX up XX and was margins. by earnings, In higher in X.X% $XXX to by operating improvement from partially by Operating provided by Earnings basis than in stronger

As quarter see from charts attached book-to-bill. the a press good a to with to you X the enjoyed can X release, we

Total about and to backlog intake some say million or will backlog the operating cash color segments third give I of order $XX.X billion, about if you in his of decreased I have separate X%. Jason $XXX discuss more about a remarks. and

CSRA me briefly, strong first of quarter, to against three year-to-date it up in of $X.X XXXX. CSRA at for months the first. or $X.XX was very clarity, XXXX, $XX say revenue organic were driven Let Operating X.X% last turn up way EPS To the was million plus beginning by attributed XX.X% the XXXX growth, every acquisition the compared Revenue was or better. the year. X another second quarters XXXX the quarter but billion the of earnings first of

sequential improvement delivered months. X we In a good short, good and first

are we our essentially, and to such, on track internal As plan external expectations.

give the on perspective some quarter reporting So the segment let me you year-to-date. the for and

million $XX mix First ago were XX% Aerospace. very X.X% expected. of earnings in the margins important year had was on as Revenue most related billion $X.X higher lower Operating $XXX or of Aerospace quarter higher fully to quarter. good respects. a than million

me -- concerning operating color comparisons and the margin. you little earnings with Let give here concerning quarter-over-quarter a

part quarter This Delta You had quarter. last Aerospace driven mix. recall strong operating this is XX.X% segment a by margin may the third in with that against year XX.X% only

new margin; were our in and XX and On a positive of is first comprised large-cabin past in the Over or excluding notably sequential XXXX. GXXX in point in point the the second million was than quarter Aerospace The of basis revenue settlement sequential non-recurring improvement The improvement quarter. XX.X% contained on up the better XX supplier. results is deliveries XX.X% a the story earnings XX% with up or higher which a periods, a margin. million quarter $XX product deliveries XXXX third both basis quarter of from $XXX basis, operating were sales pre-owned saw even

So mix, good challenges are despite progress. making of the we

on focused with costs our aligning operating cadence. our are We

both XX, XXXX. June Type earned its Production and Certification GXXX The on

of approach the We balance have in commenced targeted digit ranged the this between earnings double XX. on improved quarter. for slower. transactions With Activity the of and December the XX both and and process received had turns. attractive year X.X will validation deliveries and to EASA was capital book-to-bill help total This in time and very to is one we respect orders, closure validation expect to but revenue to XXX the and was October the a year. interest to of working for GXXX robust,

very guess, a quarter. We the would you expect order fourth strong activity in as

You quite announcement doing plane from have all expect the GXXX an The the avionics Aerodynamics aware to industry mature we well in of of specifications The series. the GXXX Aerospace. the new at first an GXXX new undoubtedly GXXX GXXX engines, GXXX. to materials and stimulated create new discussions. All in winglets cleared product its some new in up publicly flight of of respects and we It is leader. is expansion The all incorporates announcement the this available. and and advances line, in and are development that related mystery some of quite are and brings Avionics this of has the brand are program our December. The

up to million million, similar On or operating the basis, Systems revenue sequential period $XX up and was were Turning the $XXX to $X.XX indicates. $XXX year-to-date story relevant over billion million margins million the last million or up X% same XX% a On good as of third were earnings earnings year a Combat had XXXX. revenue $XXX up or the $XX neighborhoods. We X.X% comparisons third Revenue plus quarter a quarter over XXXX. Similarly the $XX Combat X.X% Systems. the increase. of of XX.X%. quarter clearly is up of was million or XX was against basis, of a return operating

or more revenue. settlement only a quarter However, higher. million one-time first operating X.X% $XX lease than and profits earnings of in slowly litigation Mix is the why explain are expanded

the very operating final good in year. the leverage a of expect We period

it's I the a quarters. XX in noting past year-over-year XX growth enjoyed the of worth Combat has Systems think the

Our the Stryker to in up our stead growth underscoring which shift high first volume government Army programs for the platforms to of business and perform the continue US-based of compared XX% mix. a demand and and Army in volumes are quarters direction we growth. year-to-date, existing our Fighting upgrade we've for coming Tank US is advocate, puts recognize Abrams the continued strong XXXX OMSD Bradley the focused portfolio. a Stryker, this nice program with for manifesting the the the to Furthermore, XX% itself superior in in good Ordinance in with replace three bar well in Ammunition In accounted set Vehicle. and explicit delivering solution for year program on us revenue

nicely. year. to programs UK this of successful into test fire we then continue to AJAX and the testing reliability international quarter production. Our has Work to transitioning Live been from the progress in on engineering full program third is and testing entered

Canada book-to-bill vehicles XXX and enhanced state of their We government enter the Systems of negotiating to ordered Support continue this has a deliveries this tranche begin billion. deliver armored The Combat XXXX. Government year the with XXXX. quarter X.X ELX backlog Work production Combat expect the is to of to Spanish X. steady through with $X.X we in on V QX and Piranha to XXX contract begun expect the vehicles. of first program to

improvement driving line production As good continuous for a planning and segment. this for consequence, sight we in of have businesses in very all

closing of one or ago. was in part timing, against up systems. progress in revenue On ago XX.X% to are $XX segment higher million revenue due year-over-year businesses We a With this out $XX the earnings the quarter, the billion operating $X.XX trending move. than right at QX up was the Every on sequential in better to our marine NASSCO. due group, and earnings direction million Virginia-class is were respect $XXX were earnings year $XX Operating or III in combat down at year XX.X% of million. to basis, million a Block to the

million earnings million of For three in improvement three first revenue of up of $XX quarters XX rate. same year, better X.X% on point a Operating the quarters margin $X.X $XXX or was basis the XXXX. were billion the against

Systems, marine our on group Work Combat has programs, continues Virginia-class quarters. to submarine growth XX past to the enjoyed and Similar the of engineering year-over-year progress. make construction in Ballistic-Missile the Submarine X good Columbia on

which of have early XX% completed reflects good complete the We and has Virginia steady, work Block Columbia. driven by drawing, volume production Virginia-class remains and progress. X Block work IV design the on been on Columbia are

the on the addition DDG-XX are Ships. and Block the follow-on contract first in With and applied with be Ship on to respect resulting X,XXX We X,XXX us considerable the the year, X Restart awarded nice Bath, X challenges and expect this to backlog. performance DDG Ships behind DDG-XX the a to

We have backlog. good in performance XX to this backlog ships with a large DDG-XX prefer opportunity across steadily improve very

Finally, higher revenue up the NASSCO, at was volume. for due repair quarter to

due were program. work to TAO and repair higher up year-to-date the volumes Oiler Similarly, on Class

expect Systems a growth to in the a two the We X first for come. has ESB time fourth the also Matson been continue the to ships be story all, will us compelling and Marine for In to quarter. long deliver in so

backlog. going is forward operating large improvement efficiency this margin focus very and Our over

up results. in Earnings year. was revenue the higher. On quarter, million versus Earnings Margins $XXX of $XXX an million were months of were last $X revenue Mission Sequentially, XXX against impressive were Mission or margins billion months ago flat For June with for were of million quarter X basis Systems; XX.X% up year-to-date the of first on million Mission year had points. $XX XX up basis up of X basis, the the the impressive last year. Systems third points even Systems more $X.X a X.X%.

appropriately and continue quarter Mission X high-performance book-to-bill business control base at It three sophisticated enjoyed XXXX, XXXX of in XXXX X will that so. the the have has $X.X quarter, least space, to to communication X ago $XXX capabilities year revenue to mark X and a us billion and solutions. Technology Information of at down quarter. million Systems and reflect be broad This its business been third related reported stands have CSRA the to of a in GDIT. million rates. in segment. non-core above with against more a despite line the in million, XXXX. and been made has Its charge, in command for the settlement reflected the modest $XX $XXX appropriately is the company results of a as improvement a made margin Operating would than termination lower margin would have Absent expected progress combining reflected earnings in and were this or exit result were entered more The down largely somewhat earnings business. have its in we been of into divestitures

gone internal of has integration is schedule. ahead CSRA Our of and GDIT our well very and

management both Our pulled gelled has team from businesses nicely. very

In are to that We are book-to-bill goals. exceed cost end, to book-to-bill X generate X of have quarter, for we booking. synergies X.X meeting the was generated our we To working $X.XX a to for good continued the billion X.X to and months, year's this X.

are captured months bookings X than Our of quarters the three XXXX. XXXX nearly during those XX% first higher for

The backlog by year. business of activity and the right. to of $XX up this despite billion delayed free strong. generated of has close up awards the that of to cycle. procurement have total this income $X.XX customer customer Our continues is robust XX% the solid, restructuring expected of and expenses. awarded order The contracts flow cash metrics been investments billion in a billion has quarter, and controlled start the outstanding net half the imputed be underlying to to comes remains GDIT dollars a the face infrastructure in over protracted XXX% in strong flow had cash GDIT protests that over from slipped

defense So the revenue. grown in businesses, a all quarter summary the on on of earnings have to nearly performance X% over X% the offer of in a advance operating

the higher. a of quarter. business, X operations the the on to the divestiture revenue of shy and X.X Book-to-bill operating about defense $X.XX X quarter. to centers Excluding billion Orders are points $X billion X are organic growth the of revenue just the was for call profit for in rate for

X For pace essentially defense bookings approximately months the growth. with have kept revenue in the X%

have gave this upcoming comprehensive finally and our you into next I And with I year process, in that on the you changes be we may make quarter. seem is We last a respect ask the let the just year. and to tempting about year, a will to you our think this prior and me as insight better result fall thorough. with for of as later remind closing don't as that right businesses be last I to at So to it be outlook get planning full guidance have in January in track any gave The you we guidance. January when process that grounded as time

don't next this at piecemeal I prematurely to juncture. So year want

You'll of tail January years. hear many our from the in many, for end and customers

over turn call Aiken. the me to CFO, Let our Jason

Phebe and good you Thank morning.

net net the The to the in the interest to was million the due both Our to brings is first XXXX X the X first been work year programs, primarily that's compared million as third since issued XXXX of That interest a end months $XXX on our $XXX vehicle the in first million the an higher we the carrying the commercial balance for XXXX. receivable than for continue to quarter and expense of we one been of of period balance We've XXXX quarter quarter at of fourth outstanding CSRA. debt expense to to $XXX resolve of large XXXX. same year. increase the in also in anticipated paper last outstanding finance months through international acquisition

As was resolve balance billion I That quarter work quarter cash $X.X on the performance the cash conversion rate. from The mentioned. million the flow a said, the operations XX% receivables cash we arrears. international free $XXX in our the have progress to was of still Phebe mentioned, in some to do reflected just our and

matter issue We're end resolved continuing have this the work customer of to year. the to and the by with the expect

be in OWC at come expect contract. work growth Until to Contract UCA, EB flow of still excess XXX% payments temporarily well and conversion Action to of been with our we know year get Block, has we get the the these continued that or contract Notwithstanding that quarter, cash at net full year the to in outstanding Navy for as income. under continue are Gulfstream impacted cash Boat. in an this progress billings free the Assuming made be by operating reasons fifth under progress Virginia-class now Electric flow we on executed Un-definitive to limited. effort you

that the quarter. We in the with to V fourth receipt unwind contract Block expect the of situation

quarter capital horizon. expenditures or revenues, front, of support $XXX in investment Deployment Capital significant on the the On shipyards the X.X% that's our reflecting were to million in the the growth

on with of the position balance We ended $XXX debt the and in billion. quarter. the a million in sheet balance paid also of $XX.X net We cash dividends quarter a $XXX million

We the expect outstanding free our repay to to this use cash our of end flow commercial paper by year. balance

tranche notes quarter of In a we in second rate addition, fixed and the year. maturing next have floating of

focus repaying debt. beyond dividend internal and investment will the our the this in moment be So

range. the rate international points months, previously XX.X% full for than Our a rate effective anticipated was our the strength quarter greater basis rate With by operations. expected, in mid-XX% reflecting by driven year are XX tax tax lowering benefits of our foreign X to first tax of the the XX.X% we

discussed, FX result associated quarter, Despite assumptions in increased I other Systems, to rate the of than tax to full dollar, last the specifically color relative of quarter, drag lower groups backlog And each million our on at a impact pension to in current back that to remarks. third over an our annual of non-qualified of Combat very year. sales. increase impact Howard with X Q&A. that Systems market a The has of of of you the plans. for I'll just headwind, $XXX year than the concludes backlog reduction at recognized it the and in backlog continue the remains Combat this my a the first costs due balance the the adjusted at outlook. expense one the the As of expense turn for strength Specifically, X strong months pension the times US conditions, backlog and experienced end our in a experience Group's we more we've on point the more offset

Thanks, Jason.

queue. As you how ask to and participate. participants a that question so has everyone please could follow-up enter participants a one reminder, the to ask question remind to chance one Rocco, we

comes Barclays. David go Strauss first ahead. [Operator from Instructions]. question of Today's Please

morning. to given, the that? Phebe, with about one, a EBIT and approaching growing prior guidance double-digit that on you've How how impacts potentially into Gulfstream talked high again. range but regard touch to you've in Good the then where bit little all I significantly growing GXXX the in factored wanted believe that 'XX, margins and 'XX, the GXXX is

airplanes several strategy. remind the into how in we're opportune just out. So operating expect -- service, But, I we portfolio the thinking but entry to guys our because of think no, might about in you really it years be our

So, year, plan We've will we've delivery with and fact four production order increased past XXX for deliveries the doing XXX next several GXXX had And And to been past the large very you had XXX. down backlog the consistent XXX about years time. on we've work of completely demand. over following again be for over production current year book that independently score, voluble had will as as the and a to to the down a know, pretty years. production you XXX bring been the know, the and of we've that able a and benefit and so that reduced we're get that consistent three we've and the

is So ago. the with long nothing be XXX planned clear, listen, this to announcement launch has do a to

with and then will keep way, plan, XXX then factor job If earnings reduction that with increased plan. in consistent from the the with growth. it risk the enters ample and to into remains to stable. revenue and from to another deliveries of but has by planned And opportunity, comes balance GXXX state an said, earnings long-range, earnings our the become the Our is flow GXXX our this I loss revenue that in as it and been service the as our XXX

way I for that that does you've that just Gulfstream given guess the guidance for different prior different, still Okay. asking -- and hold? 'XX, a 'XX

Well, and making grow our bottom se, indicated to I don't continue line, we've per given that transition. think but made we've line we'll we've our this top this as guidance that

I to with slower look, with little managing little stabilize because continue this, be are growth but to that transition XXX that. we'll the bottom a done and simply is a from will and and bit XXX do idea think line to that , the our this XXX transition we earnings the we've

when So thinking today this the our about going behavior has forward. forward, drive business strategy I a think going you and the driving that you're on about our performance that think will we'll how form that is driven basis it so forward going and

Thank you.

Our Please question from of Baird. today comes ahead. go next Peter Arment

good Phebe. morning Yes, thanks

How Just a that on about you should you've facility follow-up, talked production we think is always kind dedicated the dedicated production just going in? the the GXXX GXXX, GXXX. for a Thanks. with the that of be question to GXXX started GXXX with the about feathered

Well, a expect have See facility in necessarily But platforms. about, it that we do! We question of to be line? your learning that dedicated type other our won't do feathered to seen in. production on we've

come On production our operating both increased result our our curve learning the down dedicated curve come all well our by as post-driven as as line. learning efficiency that's the XXX we down and of

the the bookings year-to-date. is How just quarter expect X to you've to similar the months healthy had And you GXXX here, know X order the that following Thanks. a you path in and follow-up mentioned I GXXX related a XXX? and fourth approaching the are book-to-bill for it on as book over a the for front, -- orders you to the

know, XXXX. in increased By a improved again as quarter I XX% nice as the that's portfolio. have the our revenue. and and you way, as this had is I our more to of activity our year a better Yeah, as for compared fourth good expect the we increase This got quarter a orders against third activity even robust we against order across backlog order said, think this announced in quarter, we've we've quarter for us. quarter, XXX, But

ahead. Cai from comes today and of Cowen Rumohr question von Company. next our Please go And

very it looks you GXXX Phebe and terrific. Thank on congratulations the much

Thanks Cai.

Okay.

You've in of indicated, flight. earlier to fairly delivery I that is part be to or part Any XXXX, given guess, your first comment, year? the the the in the latter hope year you're -- first of the close will

regulatory certification through So in the look, comfortable forward, you. well about prism -- you going we've than of through think we we're we've as even looked know, do. that we we've, look the the we but current environment, given I of And the better prism in thought estimate the

so our And that great. earlier happens factored thinking. into that If we have that's

any I NDAs. bookings the had under And you industry for included third it. suggest your Were showing GXXX. orders guess for then some been Got in time firm this that there plan quarter sources some the in

airplane, bookings some on airplane that's This with that be to this all market on I'm We very is going going particular say score. that had to segment. popular

from comes Citi. of today question Jon Please next Raviv Our go ahead.

through Hi, actually. question, thanks the Section picture is question you bigger focus that certainly half allocation debt. payment first very capital on the 'XX the of for on appreciate, guys Bigger of much. decisions picture Jason, businesses across

thinking we about of things across businesses? forward you sort the think decisions should and allocation make Just those going how about, how

as as we'll to point, investment score by predictable chance I us. look it really avenues opportunities and the have prioritizing in various those know, have don't articulated dividend But us that debt those from John, pay really debt fundamental first, for terms of exist getting the to pay think forward. our but on of steady is Once changed will will incremental accretive deployment prioritization at that all internal it returns, down any core the, attractive where get for it repurchase, year. is we priority and next least the long-standing change approach of you the I then has to CSRA the M&A our You the as stand we anything think opportunities commercial half moment paper we for about and capital balance articulate between about capital have in the and roughly acquisition down first were really to through that share profitable that and a would followed half for behind deployment don't and

you. And is then protest a acceleration just on some in into to that are doing mentioned of the there then GDIT context to peers next obviously into Thank Phebe about any pretty heading out a there. you. GDIT pointed dynamics stretching in year you mid-single the out perhaps environment heavy follow-up had environment? the we heading that previously thoughts expect that market generally should take Thank share digits, Is

So the that GDIT a has been outcomes taking I market X.X, mean, book-to-bills --XX%, different think do X.X you their rate underlying XX all underlies the is the performance, We've as and to the quarter-over-quarter, share. XX% year-to-date. I about consistent have mean for since you month-over-month, know, if trailing their acquisition. set months. XX% to you performance got and for win

our $X we amount we in are, up for that's fair be than mean winning significant our contracts seen and So share, money are around -- look, tied of have at billion. more in protraction. but I a we protest a

Now historical the protests the measure historically no the growth we remain. will award we've know will we so execution slowing quite and of that that and resolve that all a winner, as small you rate the volume. next of course But of part by driven of in our and in and year awards suspect through rate contract the increased be the benefit precedents seen will are also comfortable resolved to

here. question a really of So systemic nothing timing. is It's

you. Thank

ahead. today comes Walton go please our next of Myles UBS, from And question

into was maybe more in and just I'm on don't is the lab. Jason, can if this cash the is further the on flow you quarter, advance, X.X a color wondering bit does Saudi you for Thanks a in implied also free billion quarter? and that Canadian How give flow Howard. the the play condition, boundary first just progress particular, cash little give numbers make the

Yes, sure.

received fact quarter that seen. numbers the the is the in in advanced yes, So, we you've in

conversion XX% for rate the the in that's quarter. So

of over with As it is the relates of the that's That's came it grown so just outstanding. balance billion think of right balance this after through arrears fourth it currently the to another that's into the now and quarter a think last somewhat year half we're we year, the year. year what of I call $X way from billion what's to dollars about the

really total, I disclosures, It's of not necessarily an But before can in end of we're there year. factored to $X.X working billion, resolve that you billion. in still the our between un-billed investment $X $X.X billion un-billed what's in think is see excess somewhere the that's here.

Okay and is in that of number Phebe marine the think margin years. I a best

there little color didn't projection, Just of a I curious, me but and give year. let is full-year just anything know us one the start the you update time to

I think the that you this that's coming And is had said segment this that upside does the opportunity. most through?

our because and but then they've and we prior of new previous margins -- I our here Boat customer and they XX reset followed have particular business largely So really of come the on drove and learning successful is start X. that's But of our X curves and we was know and all strong benefits as a in on what years. Block block very the margins, block us you bar finish path the they in that of with contract, the are down really Block well. saw closed structure Electric largely for strong receive closing of out and our improvements behind Block back mean IV. where the Block contract some III that you the is done and this We same performance the and

Okay, thanks.

Noah Goldman ahead. please go question And Poponak from of comes our Sachs. today next

everyone. lot of ask on the investor about there Gulfstream coming a Hi, a I I good back just focus progression because question the margins. I morning to try know to know I to want it. there's

quarter imply, First, the sequentially provided. the guidance please had it take of in fourth would I the that quarter. it's just further year. Literally, the down you last previously If

of but I further had expansion expansion prior a processes. those degree modest still expansion as in of lower ramp. correct? feathering both But XXX XXXX suggest And in that. comments the then, then interpreted XXX, you're So 'XX along larger expecting that you're you're because I have you in to in Do XXX and early

would you margin for models leverage to that business out operating carries march margin. on as pre-own a models, curve improvement a basis. on will look, the no continue in demonstrated Gulfstream on forget a. that year for So the newer year has imagine going forward Don't older

that So lower reflected fourth implied got the margin a in quarter, to extent -- that's the by an by entirely the almost pre-owned. you've

know margin in well you there just is it. included and revenue, As you has so have no

I And on correct XXXX beyond directionally the am comments?

business what over been That's consistent about think this say we're is all that time. juncture. along I and pretty to this going better at better we've Well, to going get

the GXXX full-rate at portfolio, margin in production? the once it's highest And airplane will the be the

We are not going there. so

So look, a, on that we cost have we price better. our optimization, cost quarter, quarter to you do airplanes we because commitment month, every reduction don't every imagine and we on unerring every can compete and get well

And today our Research. George next Please go question comes from ahead. Shapiro Shapiro

morning. Good

Hi, George.

this Hi, about it QX the from was quarter, being your margin preowned. looks comment about mean, higher I lower million. $XX pre-owned for there like for

GXXX have you kind block. zero the pre-own. XX.X% have would thought and the pre-owned Are margin of through I the have fourth quarter the you is have higher suggesting to for we're So on earned going would

quarter? still the above that fourth be third So margin quarter the would

think you're So, progression I contracts order, right right But the earlier, see yes, pre-owned the point your underlying expect Phebe to more fourth quarter-on-quarter was that George progress premise, to and we'll that's deliver the will would at this it's and that we're about reverse manufacturing the taking quarter, improvements to Gulfstream. see aircraft fourth the in inputs on in based what in on for continue your now premises we seeing quarter. sales the alluding first

its the through initial block. more the And Jason XXX will fact that that than offset

step up should fourth some in margin the quarter? So the

margins we've service talked there's I two of varying of different piecemeal down many There past. that into I level. different to I all that the in when so many it Aviation about quarter, in are inputs at that the aircraft don't this want go Jet and Those is the deliveries know the on. mix R&D levels, margins in mean, times to the inputs any Gulfstream

quarter of there up is people at usual, we've a the couple of this those a a but who think I myriad picking of So is, are couple point, as articulated of that ones fourth clear whole discrete factors. on implied blend a are

the I the is at operating investor Gulfstream. production the point of in and margin of steady the important improvement the regular cadence here airplanes for So the think most long-term

The a the Saudi this -- advance or from Was receivable? clarification that some for Canada. you you, for for the just contract just from quarter got Jason. Canadian there also And was new

strictly related the is That relationship our Canadians. to with

the program. On new

program. On the new

Okay.

were really some you referring and by when contract, this announced year, end which you at third that in new to the been balance cash of expected commented to obviously hadn't in quarter just So you in get the August the the point?

attendant we Well contract with is separate that's get that would That set there anticipated award that. this distinct issue. an would along be had and we and one

payments all our international, know, remained of on you out the our international As program slow. Canada have

that hopeful the and dispute year, are we question end the Let the it there me quantum, by that everybody, elements. distinct no just a timing remind no but there owed. is still resolve of simply dispute two fact we on on is of that It's

Okay?

Our next go Keay comes Wolfe today ahead. Research. Hunter from Please of question

Thank morning everybody. good Hey, you.

little any on over this like any is, to customer Phebe situation what done you touched in Thank your the rumblings stimulated there? sort Have then the by has any comment made, looks you. and GXXX part can here concerns heard the And that. but tariff when mean you the bit this you are discussions I'm on second but exempt, of from any be going about GXXX You've said thoughts that you you elaborate Europe.

business an bit none factors and let's the about fleet. fly, idiosyncratic order, on the rest of to of you about host let XXX the in the the factors talk is a give segment continues but different in why missions buying not the is that XXX. So very alternative. It the are for by their replacement in competitor. a market and slightly is It not the decisions their space, same the ex-US on a clarifies bit and little introduction the a But XXX a fulsome. and understand of including explanation and GXXX an is frankly be individual Customers and the the and ramp very you fact a of market makeup as inverse clearly to it an talk XXX. motivated of The they the size, It is what me is not. XXX XXX what tariffs

is an it been the helpful. experience think and I clearly XXX has ARM in our So the XXX clarified

of next Our ahead. from go question Robert Suisse. Spingarn Please today Credit comes

And Rocco this is last question. Mr. our Rubel -- This will be

you, Thank sir.

So progression. margin Phebe, I about wanted to go to GDIT the and just talk

I in we quarter, that prior back margins and be otherwise to robust talk but you. a sense a share so the doing about Jason, You the but pressure given then And quarter, hear cash might higher. we your the to follow-up. the and just in quarter If could Thank here at for like? not the rates retiring talked guide, would buyback pretty interest what the indicates on a about deployment go I debt, think you the look it expenses make the of some fourth that look margins math? normalized just on

and But pay stock. buy out debt down have never we're comfortable to leverage to we we're with going our that historically and debt taken

I know reasons have all years. anticipated So performance were business that understand we margins the of remind so will think with don't exited as consistent you over EBITDA with we continue sorts you improve. their But this line we their one-time industry-leading I are that have need what a margin of to but GDIT -- look, I to CSRA. we this inherited minus margins because discussed charge

much joining you everybody today Thank for very you for Rubel. Mr. is the us. and call thank else This

General to a quarter for Dynamics the earnings and the you reminder, the presentation. highlights As website should release refer third

at XXX-XXX-XXXX. Thank can questions, If I you. reached you additional be have

conference sir. has concluded. And thank you now Today's

lines disconnect have now and may wonderful your You day. a