Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Lockheed Martin's Third Quarter 2015 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. Jerry Kircher, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Karen, and good morning, everyone. I'd like to welcome you to our third quarter 2015 earnings conference call. Joining me today on the call are Marillyn Hewson, our Chairman, President, and Chief Executive Officer; and Bruce Tanner, our Executive Vice President and 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. Please see today's press release and our SEC filings for description of some of the factors that may cause actual results to vary materially from anticipated results. We have posted charts on our website today that we plan to address during the call to supplement our comments. 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 Marillyn. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Thanks, Jerry. Good morning, everyone. Thank you for joining us on the call today as we review our financial results and key accomplishments in the quarter, as well as provide a status update on the strategic initiatives we announced during our July earnings call. As today's release illustrates, we continue to drive towards achievement of our full-year goals with another quarter of solid operational accomplishments and financial results that exceeded our expectations. This outstanding year-to-date financial performance enables us to, again, increase full-year 2015 guidance for sales, operating profit and earnings per share. In addition to the increase to guidance, we reaffirmed the prior 2015 outlook for full year orders and cash from operation. Overall, the corporation continues to excel in the attributes we most value, providing critical solutions to customers and returning value to…

Thank you. Our first question for today comes from the line of Jason Gursky from Citi.

Hey. Good morning, everyone. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

First, I just want to dive a little bit deeper on the margin outlook for 2016. There were a couple of things that you mentioned, C-130, air missile defense, and then some strategic bids. I'd like to get a little bit more color on each of those. C-130 and air missile defense, have those been definitized at this point, or are we still waiting for that to happen? And then on the strategic bids, can you just walk us through what segments those are impacting and just kind of the competitive dynamics that are going on there? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yeah. Sort of a mouthful there, Jason. Let me try to cover all of these things. So margins, we talked about C-130, air missile defense system, other programs. So, C-130, we're just coming off of a number of contracts that were negotiated essentially with the same timeframe, and we're about to start delivering next year actually. The first aircraft associated with the multi-year contract that we're – we've just reached the handshake agreement here within the last couple of weeks. So, as you can imagine, we've done very well based on our previously reported results on those aircrafts where it's sort of a reset, if you will. When you start negotiating the next contract, you start with the exit performance in mind. And then you have to start seeing if you can improve off of that now higher bar, if you will, of that performance. So that's sort of the C-130. Again, as I said, that we did reach handshake within the last couple of weeks. The air and missile defense program, kind of a similar story, a lot of PAC-3 negotiations. So the early stages of that program, we performed very…

Thank you. Our next question comes from the line of Pete Skibitski from Drexel Hamilton.

Hey. Good quarter, guys. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning, Pete. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Thank you.

Hey, guys. On the 2016 guidance, is there upside to the flattish top line, if we do get a budget before the end of this calendar year or is a risk if we don't? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Pete, I'll take that one. I don't see a whole lot of swing one way or the other quite honestly in 2016. The vast majority of sales that will be recognized in 2016 are already in backlog or we would expect them to already be in – to be in backlog by the end of this year. Essentially, other than, again, IS&GS which is the short sort of turn business within the corporation, we would not expect orders that would be received in the fourth quarter of this year, the first year of the fiscal year for the government to necessarily translate into a lot of sales next year. And you should think that as a continuing resolution, you can't have new start programs, you can't spend more in the new fiscal year than the prior fiscal year. The rest of the business areas like IS&GS, that's not going to be a hindrance. I mean, again, we're expecting that business area to actually decrease in the volume. So, we wouldn't expect to have a huge impact from what we're guiding as a result of the CR. But conversely, as I said, we wouldn't expect to see upside either.

Thank you. Our next question comes from the line of Rich Safran from Buckingham Research.

Good morning. How are you? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning, Rich. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

Marillyn or Bruce, in the release, you note that you may be at risk for reimbursement in excess of cost. You're still in negotiations and the concern that current funding is insufficient to cover your production cost. I wanted to know if you could provide more clarification on your statements in the release, discuss the impact it might have on your $5 billion full-year cash flow goal for 2015. Also, and if you could just tell us when the deadline would be for receiving funding such that the $750 million you mentioned in cash you expect to collect could be pushed into 2016? Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Bruce, why don't you take that one? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yeah. Sure, Rich. Let me take a shot of that. I'll probably maybe give you more color than you maybe really want for that, but – so you should think of this affecting a number of very large programs, specifically just to name two, but it's not limited to those two, the C-130J Multiyear and the LRIP 9 negotiation. Again, C-130J, we did reach handshake, as I said earlier to Jason, just a couple of weeks ago. We're still in the process of negotiating LRIP 9. But on both contracts, think of this as where we received initial funding to start work. This is typically described as sort of long-lease funding or advance procurement funding. We literally take that money and begin to work with our supply chain to start funding the supply chain. It doesn't honestly go in the earlier stages to do a whole lot of work for Lockheed Martin because we're further down that food chain, if you will, than our suppliers. In both cases, we…

Thank you. And our next question comes from the line of Noah Poponak from Goldman Sachs. Noah Poponak - Goldman Sachs & Co.: Hi. Good morning, everyone. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning, Noah. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning. Noah Poponak - Goldman Sachs & Co.: I wondered if you could address this recent press about some possible fairly large corporate overhead cost reduction. It's hard to tell what's related to the government IT business review and what's part of the remaining business. It would seem like a fairly large number that's out there if it is in fact a decent amount in the remaining business. And then related or I guess, depending on your answer to that, related, Bruce, in the past you've commented when you've given your initial segment margin outlook about qualitatively how much conservatism is in it or how much upside risk there is. And I guess I wonder if there's more cost coming out than normal, is there more upside risk or not? Thank you. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Let me take your first question, Noah. I did see the press that was around a 30% overhead reduction. Let me just put some color around that for you. I mean, we are always looking at our business structure and looking at different excursions we should take in order to keep our business competitive within the business environment that we operate in. So I'm looking to target the 20%, 30%, 40%. I mean that – so just to put it in perspective, this is a matter of us constantly looking at where the opportunities are for us to be as affordable as we can and how…

Thank you. And our next question comes from the line of Ron Epstein from Bank of America Merrill Lynch.

Hey. Yeah. Good morning, guys. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning, Ron.

Marillyn, I have a big picture question for you. Post the announcement of the Sikorsky transaction, the DoD came out and said, you know what, we don't want to see any more big M&A and they suggested that the consolidation in the industry has been anti-innovative and then kind of notably your company came back and took issue with that. Can you elaborate on that, I mean, your thoughts on consolidation and the impact that it had or not had on innovation? Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Yes. I'll be happy to. Thanks for the question, Ron. I guess, I've had a lot of discussions with Frank Kendall and others about this policy statement that he put out and respectfully I told him that we disagree with that, that his general conclusion and his rationale that consolidation in the industry is bad for the industry. There's really no evidence to support that. There's no evidence to support that with our Sikorsky acquisition that we reduce competition or inhibit innovation in any way. And in fact, if you look at our performance, we have consistently delivered the best and most sophisticated defense capabilities in the world. We're going to – we intend to continue to do that. We successfully compete for opportunities that come about, and we invest in advanced technologies every day. We offer cost-effective solutions. We wouldn't be able to be reporting out the type of financial results that you're seeing and have been seeing for the last several years without performing well. And we're performing well for the Department of Defense. We're performing well for other government agencies and for other countries around the world in what we're doing. And so I wholeheartedly disagree that through consolidation, through some change in size of…

Thank you. Our next question comes from the line of Carter Copeland from Barclays.

Hey. Good morning. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning.

Just a quick clarification on the comment around IS&GS, Bruce. The higher rate that you stated, was that a higher rate of decline than the 2015 number or a higher rate of decline than the high-single digits that you pointed to for the aerospace growth, just wanted to clarify that? And then I also wondered if you'd give us a bit of an update given the Q4 close on Sikorsky, what that does in terms of the timing of the integration costs and the synergy targets that you had laid out before in terms of what – how much of that comes into 2015 or how that impacts 2016 relative to what you said on the last call? Thank you. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yeah. You bet, Carter. So, sorry if I wasn't clear in the words to begin with on the IS&GS, but the latter is the short answer to that. IS&GS is decreasing at a faster rate than the single-digit – high-single-digit rate of growth for aeronautics in 2016. So, IS&GS will be decreasing at higher than a high-single-digit rate in 2016, if that makes sense. And then to your question as to Sikorsky and the timing and how that potentially changes integration costs and synergy costs, I wouldn't expect they would have a huge impact on the integration costs or the ability to achieve synergy. We're still looking at spending, and I think the last time I talked to you, $80 million to $100 million or so of integration costs probably in the first year. And that's in large part to accelerate the synergies that we expect are there with the Sikorsky integration. We expect that will still take place in 2016. What will change or what will not necessarily change but will be greater clarity is that now a lot of the transaction costs associated with closing of the Sikorsky deal will hit in the fourth quarter of this year. So, you should think of that rough order of magnitude, and I hope we're on the lower end of this, but probably accounting for $0.10 to $0.15 impact to earnings per share in the year. And we thought about that relative to describing that in the guidance we provided. But we're still hopeful, quite honestly, that we can have an R&D research and development tax credit that will pass this year and that offsets – that actually more – probably maybe more than offsets that impact of the transaction cost of 2016. So net-net, we would expect to see those costs hit in the fourth quarter, but we're also hopeful that the R&D tax credit more than mitigates that also in the fourth quarter.

Thank you. Our next question comes from the line of Myles Walton from Deutsche Bank.

Thanks. Good morning. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning, Myles.

Bruce, I was hoping you can touch back on Sikorsky for a second. In terms of doing the alignment of their accounting with your accounting inside of Lockheed, how the margins of Sikorsky might behave. And then also related, as you look at the $5 billion cash for next year and substituting out the IS&GS or IT tech services business for Sikorsky, what's the put and take for from a cash flow perspective? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Okay. So, Myles, we're going to give you in January a whole lot more insight into Sikorsky, assuming it closes in the fourth quarter of this year. We made some – obviously when we did the due diligence process with Sikorsky we made some relative assumptions as to, I'll say, the conforming accounting that we expect to do. I tried to tee that up, I think, in the last call, and I literally don't have any better information to give you than what I provided to you on the July call. I'll give you, I think, much great insight into that when we actually provide the formal guidance in January not just for the rest of the company but for Sikorsky in particular as well, again, assuming we close that in the fourth quarter. As far as the $5 million of cash next year, it obviously depends on when the strategic review culminates. We're looking at depending on whether it's a sale, a spin or a Reverse Morris Trust somewhere in probably the middle of next year to the third quarter of next year. So, I would like to think that we may be able to offset most of that if it were to spin or be sold or did a Reverse Morris Trust next year. Again, with both the spin or Reverse Morris Trust or the sale, we would expect to get cash proceeds back. I know that's not operating cash flow but it would be greater, frankly, than whatever the shortfall is that we would expect to lose with the transfer of that business outside of the corporation. So, probably a little bit of a wishy-washy answer, but I don't know given the timing of when that deal would close and the timing of the cash flow in the year for IS&GS just to really give me a good idea what that benefit would look like or detriment.

Thank you. Our next question comes from the line of Peter Arment from Sterne Agee.

Yes. Good morning, Marillyn and Bruce. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

Marillyn, I guess, could you give us like kind of a big picture view on what you're seeing from international customers? I know there's been a lot of volatility in the oil-exporting countries, and have you seen any slippages or – and maybe just related to that, Bruce, are there any significant programs that we should be thinking about for 2016 in terms of international contracts? Thanks. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Thanks for the question, Peter. We are just continuing to see strong demand in the international marketplace for our programs. Missile defense continues to be a big driver for a lot of the Asia-Pacific and Middle East countries, things like THAAD, Aegis, Aegis Ashore, Patriot needs. There is a continued demand for that. You know that we continue to have the demand for our tactical aircraft, the F-16, the F-35; and as well as mobility, C-130J. In terms of oil prices, we're really not seeing a pullback on expenditures for oil prices because, frankly, these countries are looking to meet their essential national security needs. And many of them have deep reserves, countries like the Kingdom of Saudi Arabia and Qatar and the UAE and others. And really, they're not – we don't see them pulling back at all on what they need to do in terms of purchasing their missile defense, their fighters. And now I think you probably have seen that Saudi is doing their naval expansion program where they've already committed to purchasing MH-60 Romeo helicopters. And now, there is a process underway with the LCS being – there is a positive momentum on their acquisition of the LCS. They have now the congressional notification for them to purchase up to four littoral combat ships for their multi-mission surface combatant.…

Thank you. Our next question comes from the line of Doug Harned from Bernstein. Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: Thank you. On international sales, when I look at Missiles and Fire Control, I think of that as a unit that's a lot of drive from international sales and it's PAC-3, THAAD, different missile programs. But if you look over the last several years, backlogs have been pretty flat. Now, I know you've had some pullback on the services side and backlogs were a little bit better – got better this quarter. But can you reconcile the fact that we should be seeing a lot of international demand for these programs, yet so far we really haven't seen it reflected in a big increase in backlogs there? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yes. So, Doug, I'll try to answer that. I think the biggest reason that you don't see that is, one, we've seen some delays in negotiations. As I said, we just now finished actually negotiating here – I say just now, here recently we just finished negotiating both the FY 2014 and FY 2015 Patriot deals, the factory deals. Those orders, when they're finalized, are pretty good-sized. We typically don't see at Missiles and Fire Controls the sort of multi-year orders like you might associate with the aircraft programs at aeronautics. They tend to be individual fiscal year buys. So because we don't sort of reach forward and get multiple fiscal years in a combined buy, you don't see the increases in backlog that you might experience with Missiles and Fire Control. We do expect through – as you look at the year 2015, we do expect to end the year at higher levels of backlog than we began the year for Missiles and Fire Control by as much as about $1.5 billion. So it's not like it's shrinking. It is growing. It's growing at a clip. But it's not growing leaps and bounds like you would expect to see with a large multiyear program. That's simply not the way those products are typically being bought.

Thank you. And our next question comes from the line of Rob Spingarn from Credit Suisse. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Morning. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Just want to ask a couple of things on F-35. Since you're still negotiating LRIP 9, how much margin risk is there, given the work that's already been done that you referred to earlier? And then, Marillyn, you talked about the full year, the effect of a full-year CR and how debilitating that would be. But it would be largely a backlog issue in 2016. Are we referring to the slippage of – I think it's 19 F-35s? And at what point will we see that in the P&L, and how would that affect just the production efficiencies? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: I'll take on the first one, Rob. The F-35 LRIP 9 negotiation and margin risk if this is not done. Rob, I would characterize this as sort of par for the course, typical. I mean this is what we've been going through with F-35 for quite some time. I'll say that the numbers that we talk about for 2016, because there's so little impact of LRIP 9 affecting the P&L in 2016, I wouldn't expect to see a huge swing no matter sort of what we negotiated margin-wise on LRIP 9. And maybe I'll let Marillyn answer the broader CR question, but you asked a specific one about 19 aircraft on the F-35, if there is sort of a full-year continuing resolution. I think that number is about right. That's the number that the Pentagon has talked about. Again, we wouldn't expect to see much of an impact of that affecting 2016. You would start to see that pick up steam in 2017 and 2018 and beyond. I'll remind you we do record revenue and earnings on a cost-to-cost basis as opposed to units of delivery. So, those 19 aircraft would stop having less growth than we had expected to have happen, but not much in 2016. It would start happening in 2017 and beyond. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: I think you pretty well answered him, Bruce... Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Okay.

Thank you. And our next question comes from the line of Sam Pearlstein from Wells Fargo.

Good morning. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Hi, Sam. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

Can you talk a little bit about the Space Systems segment, just what drove the better-than-expected sales and earnings? Does this change your view towards how strategic it is to maintain your ULA joint venture? And if I can sneak a second one in, Bruce, can you just tell us is CapEx mostly flat year-over-year as we look at the 2016 free cash? Thanks. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: I'll try that, Sam. So, third quarter Space was actually down about 5% in the quarter. We should think of that – we had a commercial launch last year and none this year. That was probably the biggest driver for the reduction. There's a lot of pieces sort of moving around, but that wasn't the biggest reason for the delta.

I was thinking more in terms of the year getting better more than... Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Oh, the year, I'm sorry, for the full year. Yeah, so, we've had – the overall year performance had been very good. We've had extremely good performance on our government satellite contracts, and we actually have had some upticks from an EBIT perspective as well with the F-35 – from the ULA joint venture that your next question asked about. So sort of the combined. We're seeing really, really good performance out of Space Systems on their legacy programs. Think of it as the satellite programs like SBIRS and Advanced EHF. But also on the launch vehicle business with ULA, we're seeing some more equity earnings there. As to the other question on the ULA JV, we haven't decided anything differently about the ULA JV despite what's in the press, Sam, so I'm not going to comment on that at this point in time. And then I think your last question was on CapEx for next year and how we should think of that. You should think of that as being essentially comparable to this year's level, maybe a little bit higher. But I'll tell you every year, as we look out to the next year, people think we're going to spend more in CapEx, and we tend to not do that as we go throughout the year. So, for right now, I'll just say probably pretty comparable to this year's level.

Thank you. And our next question comes from the line of Seth Seifman from J.P. Morgan.

Hi. Thanks very much. Good morning. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

Just to ask about the plan – the strategic review, your ability to conclude the strategic review and make a decision about what to do with those businesses, how much is that contingent upon a budget outcome, just having a budget outcome, and then on any particular budget outcome? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yes. So, Seth, I don't think we see much dependency whatsoever on a budget outcome. I don't – and again, I'll just go back to – if you look at this business and what the projections are for this business, they're sort of unaffected by the budget outcome in terms of continuing resolution and the like because again continuing resolution would put a hindrance on new starts, programs that are growing fiscal year over fiscal year. We don't have a whole lot of that in this business. And I wouldn't expect that to have much of an impact as far as deciding what to do with the businesses on a strategic review as a result of that. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: I would just to add to that that we are getting strong expressions of interest from a lot of different parties ranging from strategic buyers to non-strategic buyers. And I think that makes the point that these are high quality assets and it's a very strong business portfolio. So it just reaffirms our belief that this is the kind of business that would benefit from a lower cost structure outside of Lockheed Martin. And we feel very strongly that we'll be able to come to a conclusion by the end of the year on what the path forward is for that element of our business to make it more competitive and stronger in the marketplace.

Karen, I think we're coming up on the hour. Maybe I'll – one last question and we'll turn it over to Marillyn for final comments.

Certainly. Our final question for today comes from the line of David Strauss from UBS.

Thank you. Good morning. Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Good morning. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: Good morning.

Bruce, maybe looking to get a little bit of help in terms of how we model things on a go-forward basis. With the outcome of whatever you decide to do with government IT and PS, there will be a fair amount of dilution. Depending on which route you choose and the cash that comes in, would you expect to be able to fairly quickly offset a fair amount of the dilution from potentially selling those businesses or just in terms of how we're modeling this going forward, how should we think about it? Bruce L. Tanner - Chief Financial Officer & Executive Vice President: Yeah. So there's a lot of – depending on the structure, David, there's a lot of just moving pieces that try to predict the outcome there. You should think of a spin as essentially a left pocket, right pocket to our shareholders, right, because the value of the business under a spin would simply be held by the same shareholders that hold Lockheed Martin stock today. So total effect on shareholders is not – should be inconsequential in that view. I understand the dilution if you look at the after-Lockheed Martin, but there is a lot of moving pieces that could affect that. Obviously, the amount of cash that we get back, whether it's a sale, obviously we get back a lot more cash. Whether it's a split or not as part of the spin/merge, there's a lot of different moving pieces there that are just at this point hard to predict. We'll have, I think, a whole lot more fidelity and a whole lot better insight on that when we finally reach a final decision of the outcome or the path for the outcome in December. And again, we're going to communicate that to you just as soon as we get there. Marillyn A. Hewson - Chairman, President & Chief Executive Officer: So let me just conclude the call today. I want to end by reiterating that the corporation had another solid quarter and we continue to be well-positioned to deliver substantial value to our customers and to our stockholders. We'll continue to progress toward a successful closure for 2015 and as we look ahead in 2016. Thanks again for joining us on the call today. We look forward to speaking to you on the next earnings call in January. And let me just turn it back over to you, Karen, to conclude our call.

Thank you. Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program and you may now disconnect. Everyone, have a good day.