諾斯洛普·格拉曼 (NOC) 2023 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Northrop Grumman's Third Quarter Conference Call. Today's call is being recorded. My name is Josh, and I will be your operator today. (Operator Instructions) I would now like to turn the call over to your host, Mr. Todd Ernst, Vice President, Investor Relations. Mr. Ernst, please proceed.

女士們先生們，美好的一天，歡迎參加諾斯羅普格魯曼公司第三季電話會議。今天的通話正在錄音。我叫喬什，今天我將成為您的接線生。 （接線員指示）我現在想將電話轉給東道主投資者關係副總裁 Todd Ernst 先生。恩斯特先生，請繼續。

Thanks, Josh, and good morning, everyone, and welcome to Northrop Grumman's Third Quarter 2023 Conference Call. On the call this morning, we'll refer to a presentation that is posted on our IR website.

謝謝喬什，大家早上好，歡迎參加諾斯羅普格魯曼公司 2023 年第三季電話會議。在今天早上的電話會議上，我們將參考發佈在我們的 IR 網站上的簡報。

Before we start, matters discussed on today's call, including guidance and outlooks for 2023 and beyond reflect the company's judgment based on information available at the time of this call. They constitute forward-looking statements pursuant to safe harbor provisions of federal securities laws. Forward-looking statements involve risks and uncertainties, including those noted in today's press release and our SEC filings. These risks and uncertainties may cause actual company results to differ materially.

在我們開始之前，今天的電話會議討論的事項，包括 2023 年及以後的指導和展望，反映了公司根據本次電話會議時可獲得的信息做出的判斷。它們根據聯邦證券法的安全港條款構成前瞻性陳述。前瞻性陳述涉及風險和不確定性，包括今天的新聞稿和我們向美國證券交易委員會提交的文件中指出的風險和不確定性。這些風險和不確定性可能導致公司實際業績出現重大差異。

Today's call will include non-GAAP financial measures that are reconciled to our GAAP results in our earnings release. On the call today are Kathy Warden, our Chair, CEO and President; and Dave Keffer, our CFO.

今天的電話會議將包括與我們收益發布中的 GAAP 業績一致的非 GAAP 財務指標。今天參加電話會議的是我們的董事長、執行長兼總裁凱西沃登 (Kathy Warden)；以及我們的財務長戴夫凱弗 (Dave Keffer)。

At this time, I'd like to turn the call over to Kathy. Kathy?

這時，我想把電話轉給凱西。凱西？

Thanks, Todd. Good morning, everyone. Thank you for joining us. We are all witnessing significant geopolitical tensions across the globe, including the ongoing war in Ukraine and the horrific attacks in Israel. We truly hope that peace and safety can be established for the people in these regions, and we'll continue in our steadfast support for the U.S. and our allies in their pursuit of global security and stability.

謝謝，托德。大家，早安。感謝您加入我們。我們都目睹了全球嚴重的地緣政治緊張局勢，包括烏克蘭持續的戰爭和以色列的可怕攻擊。我們真誠地希望能夠為這些地區的人民建立和平與安全，我們將繼續堅定支持美國及其盟國追求全球安全與穩定。

On this morning's call, in addition to reviewing our third quarter results and important program events in the quarter, I'll address the U.S. budget and trends we see in the global environment. And as usual, at this time of year, I'll provide our initial outlook for next year.

在今天早上的電話會議上，除了回顧我們第三季的業績和本季的重要計畫活動外，我還將討論美國的預算和我們在全球環境中看到的趨勢。像往常一樣，在每年的這個時候，我將提供我們對明年的初步展望。

So starting with the quarter. Our book-to-bill was 1.5x with approximately $15 billion in awards, and our sales increased 9% year-over-year with growth across all 4 of our business segments. Our backlog now stands at $84 billion. It's a new record, and it strengthens the foundation for our future growth. It also continues to reflect the alignment we have with our customers' priorities and the continued success of our business strategy.

所以從季度開始。我們的訂單出貨比增長了 1.5 倍，獲得了約 150 億美元的獎項，隨著我們所有 4 個業務部門的增長，我們的銷售額同比增長了 9%。我們的積壓訂單目前為 840 億美元。這是一個新記錄，它為我們未來的成長奠定了基礎。它也繼續反映了我們與客戶優先事項的一致性以及我們業務策略的持續成功。

Segment operating income increased by 8% year-over-year, and the OM rate increased over last quarter. Earnings per share were $6.18, up 5% compared to last year. Strong earnings rose nearly $900 million in free cash flow in the quarter, and we remain on track to achieve our 2023 free cash flow target.

分部營業收入較上季成長8%，OM率較上季上升。每股收益為6.18美元，比去年增長5%。本季強勁的獲利增加了近 9 億美元的自由現金流，我們仍有望實現 2023 年的自由現金流目標。

Excellent cash generation continues to provide us the flexibility to invest in our capabilities and capacity while returning capital to shareholders. We remain committed to returning over 100% of our free cash flow to investors this year, including $1.5 billion of share repurchases. And year-to-date, we've returned approximately $2 billion to shareholders in dividends and repurchases.

出色的現金產生能力繼續為我們提供了投資能力和能力的靈活性，同時向股東返還資本。我們仍然致力於今年將 100% 以上的自由現金流返還給投資者，其中包括 15 億美元的股票回購。今年迄今為止，我們已透過股息和回購向股東返還了約 20 億美元。

So turning now to the U.S. defense budget. As is common in recent years, the federal government is operating under a continuing resolution to start fiscal year 2024. We're encouraged by bipartisan support for national security priorities and are hopeful an agreement will be reached on full year appropriations soon. Our guidance and outlook assume a full year budget is passed by the end of this calendar year or early next year. And as we saw last week, the administration continues to make supplemental request for urgent needs, including those in Ukraine and Israel to include investments in weapon systems and defense industrial-based readiness.

現在轉向美國國防預算。正如近年來常見的那樣，聯邦政府正在根據一項持續決議開展工作，以開始 2024 財年。我們對兩黨對國家安全優先事項的支持感到鼓舞，並希望很快就全年撥款達成協議。我們的指導和展望假設全年預算將在今年年底或明年初獲得通過。正如我們上週所看到的，政府繼續針對緊急需求提出補充請求，包括烏克蘭和以色列的緊急需求，包括對武器系統和國防工業準備的投資。

The federal government is also developing its budget plans for fiscal year 2025, which we expect to be submitted to Congress early next year. We are working closely with our customers to plan for future capabilities and navigate the fiscal pressures they see to ensure our programs remain well supported.

聯邦政府也正在製定 2025 財年的預算計劃，預計明年初提交給國會。我們正在與客戶密切合作，規劃未來的能力並應對他們所面臨的財務壓力，以確保我們的計劃得到良好的支持。

As we have been discussing throughout the year, we are also seeing an increase in international demand for our capabilities. We've seen a particular increase in our weapon systems portfolio and missile defense technologies like the IBCS product line. One notable example of this growing demand is with AARGM-ER where we've now received interest for more than a dozen countries and just this week, the opportunity for a foreign military sale to Finland was announced.

正如我們全年討論的那樣，我們也看到國際上對我們能力的需求不斷增加。我們看到我們的武器系統組合和飛彈防禦技術（例如 IBCS 產品線）有了特別的成長。這種不斷增長的需求的一個顯著例子是 AARGM-ER，我們現在已經收到了十多個國家的興趣，就在本週，我們宣布了向芬蘭進行外國軍售的機會。

We are also working with the U.S. government to provide new advanced weapons capabilities. During the second quarter, we received a $705 million contract from the United States Air Force to develop the Stand in Attack weapon, also known as SAW, an air to ground weapon with the capability to strike mobile defense targets. Our SAW offering builds on the capabilities we provide with our high-speed AARGM missile, which is in production.

我們也與美國政府合作提供新的先進武器能力。第二季度，我們從美國空軍獲得了價值 7.05 億美元的合同，用於開發「待命攻擊」武器（也稱為 SAW），這是一種能夠打擊移動防禦目標的空對地武器。我們的 SAW 產品建立在我們正在生產的高速 AARGM 飛彈的能力之上。

Building off a mature product baseline, we're able to reduce the developmental time, cost and risk to the SAW program. These missiles are expected to be the air-to-ground weapon of choice for the F-35 and other fighters.

基於成熟的產品基線，我們能夠減少 SAW 專案的開發時間、成本和風險。這些飛彈預計將成為 F-35 和其他戰鬥機的首選空對地武器。

In our Space business, we remain focused on being at the forefront of technology, and that strategy has enabled us to build a differentiated portfolio that provides end-to-end solutions for our customers. from new space architectures to launch capabilities. We see broad applications for the technologies we've developed with a particular focus on national security missions. This includes helping to turn the Space Development Agency's vision of a new low earth orbit constellation of satellites into reality. In August, we were awarded a $712 million contract to design and build 36 satellites for SDA's tranche 2 transport layer data constellation. With this award, along with our work on SDA's tracking layer and tranche 1 of the transport layer, we are now building nearly 100 satellites for the proliferated war fighter space architecture. Our success in this area highlight our ability to compete and win in highly competitive and dynamic new markets within the space domain.

在我們的航太業務中，我們仍然專注於處於技術前沿，這項策略使我們能夠建立差異化的產品組合，為客戶提供端到端解決方案。從新的太空架構到發射能力。我們看到我們開發的技術有廣泛的應用，特別關注國家安全任務。這包括幫助航太發展局將新的近地軌道衛星星座的願景變為現實。 8 月，我們獲得了價值 7.12 億美元的合同，為 SDA 的第 2 階段傳輸層數據星座設計和建造 36 顆衛星。憑藉這一獎項，再加上我們在 SDA 追蹤層和傳輸層第 1 階段的工作，我們現在正在為激增的戰鬥機太空架構建造近 100 顆衛星。我們在這一領域的成功凸顯了我們在太空領域競爭激烈且充滿活力的新市場中競爭並獲勝的能力。

In addition, we had 2 notable launch events in the quarter. We successfully launched our 19th resupply mission to the International Space Station as we continue to execute under NASA's commercial resupply contract. And 5 of our GEM 63 solid rocket boosters helped to power ULA's Atlas V launch of a national security payload. These rocket motors will continue to support future ULA launches to include ULA's Vulcan rocket.

此外，我們在本季舉辦了 2 場值得注意的發布活動。我們繼續執行 NASA 的商業補給合同，並成功向國際太空站發射了第 19 次補給任務。我們的 5 個 GEM 63 固體火箭助推器幫助為 ULA 的 Atlas V 發射國家安全有效載荷提供動力。這些火箭引擎將繼續支援 ULA 未來的發射，包括 ULA 的 Vulcan 火箭。

For next-generation interceptor, we successfully manufactured the first set of solid rocket motor cases in August, and we're on track for our preliminary design review in the fourth quarter, more than a year earlier than the original contract date. These are just a few examples of the focus we have on strong program performance across the portfolio.

下一代攔截彈方面，我們已於8月成功製造出首套固體火箭發動機殼體，預計第四季度將進行初步設計審查，比原定合約日期提前了一年多。這些只是我們關注整個投資組合的強勁計畫績效的幾個例子。

Now before I turn the call over to Dave to provide more details on the quarter, I'd like to provide some initial color on our 2024 outlook. We continue to see solid growth across all 4 of our businesses. with sales growth of approximately 4% to 5% compared to our latest 2023 guidance, which we've now raised by $800 million throughout the year. We also expect operating income to grow by 4% to 5% year-over-year. We reaffirm our free cash flow outlook range of $2.25 billion to $2.65 billion in 2024, which accounts for continued investment in the capabilities and capacity needed to grow our business and support our customers.

現在，在我將電話轉給戴夫以提供有關本季度的更多詳細資訊之前，我想對我們的 2024 年前景提供一些初步的看法。我們的所有 4 項業務持續穩定成長。與我們最新的 2023 年指引相比，銷售額成長約 4% 至 5%，目前我們全年已籌集了 8 億美元。我們也預計營業收入將年增4%至5%。我們重申 2024 年自由現金流前景為 22.5 億美元至 26.5 億美元，這意味著我們需要繼續投資發展業務和支援客戶所需的能力和能力。

So in summary, Northrop Grumman is well positioned to drive value creation for our customers and our shareholders. We are focused on executing our strategy, driving operating performance and generating cash for our disciplined capital deployment.

總而言之，諾斯羅普·格魯曼公司完全有能力為我們的客戶和股東創造價值。我們專注於執行我們的策略，提高營運績效並為我們嚴格的資本部署創造現金。

So now with that, I'll turn it over to Dave to provide some more details on the segment results, 2023 guidance and our outlook.

現在，我將把它交給戴夫，提供有關部門業績、2023 年指導和我們的前景的更多詳細資訊。

Thanks, Kathy, and good morning, everyone. As Kathy described, we generated another strong quarter of results. The business is well positioned in growing segments of the market, and we're delivering key capabilities that address our customers' missions. As macroeconomic conditions improve, and pension and tax cash flow headwinds reverse over the next few years, we have a great opportunity to create value for shareholders through substantial cash flow growth, consistent with our long-term strategy. Taking a look at our demand metrics, we ended the third quarter with a record backlog of $84 billion, bolstered by several new competitive awards. And as a result, we now expect our full year book-to-bill ratio to be well over 1x.

謝謝，凱西，大家早安。正如凱西所描述的，我們又取得了強勁的季度業績。該業務在不斷增長的市場領域中處於有利地位，我們正在提供滿足客戶使命的關鍵功能。隨著宏觀經濟狀況的改善，以及未來幾年退休金和稅收現金流逆風的逆轉，我們有很好的機會透過現金流的大幅成長為股東創造價值，這符合我們的長期策略。從我們的需求指標來看，第三季結束時，我們的積壓訂單達到創紀錄的 840 億美元，這得益於多項新的競爭獎項的支持。因此，我們現在預計全年訂單出貨比將遠超 1 倍。

Turning to the top line. We continue to build on our momentum from the first half of the year, with overall sales growth of 9% in the third quarter. This includes growth in all 4 of our segments for the second straight quarter as our teams continue to ramp up new wins, add new talent and manage through continued pressures in the supply chain.

轉向頂行。我們持續延續上半年的勢頭，第三季整體銷售額成長 9%。這包括我們所有 4 個細分市場連續第二個季度的成長，因為我們的團隊不斷取得新的勝利、增加新的人才並應對供應鏈中持續的壓力。

At the segment level, Aeronautics posted sales growth of 90%, driven by higher volume on manned aircraft programs. DS grew by 6% on continued strength in their missile defense and armaments portfolios, including IBCS, GMLRS and [HAKM]. Mission Systems continued to generate rapid growth of restricted sales in the Network Information Solutions business, driving their top line up 7%. In Space again delivered double-digit sales growth as a result of the continued ramp on programs like GBSD, NGI, OPIR and several in the restricted domain.

在細分市場層面，受有人駕駛飛機專案銷售增加的推動，航空部門的銷售額成長了 90%。 DS 憑藉其飛彈防禦和軍備產品組合（包括 IBCS、GMLRS 和 [HAKM]）的持續增強，增長了 6%。 Mission Systems 網路資訊解決方案業務的限制銷售額持續快速成長，推動其營收成長 7%。由於 GBSD、NGI、OPIR 和一些受限領域項目的持續成長，In Space 再次實現了兩位數的銷售成長。

Moving to segment margins. We're pleased with these bottom line results in a dynamic environment. In total, segment operating income grew by 8% compared to the third quarter of last year. As we expected, we delivered an incremental improvement in our segment OM rate from earlier quarters this year, expanding to 11.1% in Q3. Program performance remained strong across the portfolio.

轉向細分利潤。我們對動態環境中的這些底線結果感到滿意。總體而言，該部門營業收入比去年第三季成長了8%。正如我們預期的那樣，我們的部門 OM 率較今年前幾季有所改善，第三季擴大至 11.1%。整個投資組合的計畫表現依然強勁。

Our Aeronautics and Defense businesses generated a healthy volume of favorable EAC adjustments through efficient execution and risk retirements. MS margins were down slightly as mix shifted to more cost-type development efforts, particularly in their restricted portfolio. In that space, given the rapid backlog growth we've experienced, strong execution and program performance are our top priorities. Space margins improved by 80 basis points this quarter compared to Q2. Diluted EPS in the third quarter were $6.18, up 5% from the prior year. The increase was driven by higher sales and segment performance, along with a lower share count. We also recognized a gain from the sale of an Australian minority investment in Q3 that we described on prior calls and included in our guidance. Partially offsetting these items was lower net pension income of roughly $1 per share, a nonoperational impact consistent with the first 2 quarters.

我們的航空和國防業務透過高效執行和風險退出，產生了大量有利的 EAC 調整。由於組合轉向成本型開發工作，特別是在其受限的產品組合中，微軟的利潤率略有下降。在這個領域，考慮到我們所經歷的積壓的快速成長，強大的執行力和計畫績效是我們的首要任務。與第二季相比，本季的空間利潤率提高了 80 個基點。第三季稀釋後每股收益為 6.18 美元，較上年同期成長 5%。這一增長是由更高的銷售額和部門業績以及更少的股票數量推動的。我們也確認了第三季出售澳洲少數股權投資的收益，我們在先前的電話會議中對此進行了描述，並將其納入我們的指導中。每股約 1 美元的淨退休金收入較低，部分抵消了這些項目，這與前兩季的非營運影響一致。

Q3 was a strong period for cash generation with free cash flow of nearly $900 million. On a year-to-date basis, this brings us to nearly $500 million of free cash flow, well ahead of where we were at this time last year. We continue to remain disciplined in managing our working capital, and we saw improvements in these accounts across the company in Q3.

第三季是現金產生的強勁時期，自由現金流接近 9 億美元。今年迄今，我們的自由現金流達到近 5 億美元，遠高於去年同期。我們繼續嚴格管理營運資金，第三季我們看到整個公司的這些帳戶有所改善。

With respect to cash taxes, the IRS recently provided additional guidance on the amortization of research and development expenditures under Section 174 of the tax code. This guidance did not change our interpretation of the provision. But upon finalizing our 2022 tax returns, we lowered our estimates for Section 174 cash taxes based on applicable R&D costs that were below our original estimates. Offsetting the lower 174 taxes is an increase in other tax items, the net result of which is a multiyear cash tax forecast that is roughly unchanged.

關於現金稅，美國國稅局最近根據稅法第 174 條提供了有關研發支出攤銷的額外指引。該指導意見並沒有改變我們對該條款的解釋。但在最終確定 2022 年報稅表後，我們根據低於我們最初估計的適用研發成本降低了對第 174 條現金稅的估計。其他稅項的增加抵消了較低的 174 項稅收，其最終結果是多年現金稅收預測大致不變。

Moving to 2023 guidance. I'll begin with a few updates to our segment estimates as shown on Slide 7 in our earnings deck. First, based on the strength of our year-to-date results, we now expect modestly higher sales in our Aeronautics business in the mid- to high $10 billion range. This represents a return to growth this year at AS, a year earlier than expected, and continues to assume that we will be awarded the first LRIP lot on the B-21 program in the fourth quarter after first flight.

轉向 2023 年指導。我將首先對我們的細分市場估計進行一些更新，如我們收益表中投影片 7 所示。首先，根據我們今年迄今的強勁業績，我們現在預計航空業務的銷售額將小幅上漲，達到 100 億美元的中高水準。這代表 AS 今年恢復成長，比預期早一年，並且繼續假設我們將在首飛後的第四季度獲得 B-21 項目的第一批 LRIP 批次。

The Air Force said in September at the AFA Conference, we are progressing through ground testing, and we're on track to enter flight testing this year in line with the program baseline schedule. And we are again increasing our top line expectations for our Space segment based on new wins and continued strength in this business. We now expect 2023 sales of approximately $14 billion, which represents year-over-year sales growth of 14%.

空軍在 9 月的 AFA 會議上表示，我們正在通過地面測試取得進展，並且預計今年將按照計劃基準時間表進入飛行測試。基於該業務的新勝利和持續實力，我們再次提高了對太空業務的最高預期。我們目前預計 2023 年銷售額約為 140 億美元，年銷售額成長 14%。

For operating margin rate, we're projecting a slightly lower operating margin rate at MS to reflect their year-to-date trend line. Other segments are unchanged. At the enterprise level, we're increasing our sales guidance by another $400 million and now expect 2023 sales of approximately $39 billion. This represents year-over-year growth of roughly 6.5%. We are maintaining our guidance for segment operating income. Year-to-date trends would indicate figure towards the lower half of that range, and we're reaffirming our estimates for EPS and free cash flow.

對於營業利潤率，我們預計 MS 的營業利潤率將略低，以反映其今年迄今的趨勢線。其他部分不變。在企業層面，我們將銷售指引再增加 4 億美元，目前預估 2023 年銷售額約 390 億美元。這意味著同比增長約 6.5%。我們維持分部營業收入的指導。今年迄今為止的趨勢表明該數字接近該範圍的下半部分，我們重申了對每股收益和自由現金流的估計。

Next, I'll build on Kathy's comments on our 2024 outlook. Sales growth has accelerated sooner than we expected in 2023, and we continue to project growth at all 4 of our business segments next year. We expect segment margins in the low 11% range, and we continue to project improvement over time as we see benefits from the stabilizing macro environment, our cost efficiency initiatives, and our business mix improvements. We continue to anticipate CapEx to be roughly consistent as a percentage of sales in 2024 before declining in 2025 and beyond. And shareholder returns will remain a top priority for our free cash flow deployment, including returning at least 100% of free cash flow to shareholders next year.

接下來，我將根據 Kathy 對我們 2024 年展望的評論。 2023 年銷售成長加速快於我們的預期，我們繼續預期明年所有 4 個業務部門都會成長。我們預計分部利潤率將在11% 的低水準範圍內，隨著時間的推移，我們將繼續預測改善情況，因為我們看到穩定的宏觀環境、我們的成本效率措施和業務組合改進帶來的好處。我們仍預期 2024 年資本支出佔銷售額的百分比將大致保持一致，然後在 2025 年及以後出現下降。股東回報仍將是我們自由現金流部署的首要任務，包括明年將至少100%的自由現金流回饋給股東。

Given the volatility in the financial markets, I'd also like to provide a quick update on our pension plans. Our funded status is now above 100% as of the end of Q3. And we continue to expect minimal required cash contributions over the next several years. This is a discriminator for us that supports our affordability and competitiveness as well as our capital deployment optionality. Given that our GAAP earnings per share are affected by net pension income, as we did last year, we have provided a pension income sensitivity table for 2024 on Slide 9. Our forecast in early 2023 was predicated on asset returns of 7.5% and a discount rate of roughly 5.5%.

鑑於金融市場的波動，我還想快速介紹一下我們的退休金計畫的最新情況。截至第三季末，我們的資金狀況現已超過 100%。我們仍然預計未來幾年所需的現金捐款將達到最低限度。這對我們來說是一個歧視因素，它支持我們的承受能力和競爭力以及我們的資本部署選擇性。鑑於我們的GAAP 每股盈餘受到退休金淨收入的影響（正如我們去年所做的那樣），我們在幻燈片9 上提供了2024 年退休金收入敏感度表。我們對2023 年初的預測是基於7.5 % 的資產回報率和折扣率約為5.5%。

Through September 30, financial market movements have led to a roughly 50 basis point increase in discount rates and a year-to-date asset return of 1% to 2%. This combination of results would reduce net FAS pension income and increased CAS recoveries from our prior projections. Based on the sensitivities highlighted on the slide, the net result would be an impact to 2024 GAAP EPS of roughly $0.50 compared to our initial outlook provided in January. Keep in mind that FAS pension income is noncash in nature. Higher CAS estimates would provide a modest benefit to our cash flows but could have a modest downward impact on EACs in the quarter in which they are updated, consistent with this year's pattern.

截至 9 月 30 日，金融市場走勢導致折現率上升約 50 個基點，年初至今資產報酬率為 1% 至 2%。與我們先前的預測相比，這些結果的組合將減少 FAS 退休金淨收入並增加 CAS 回收率。根據幻燈片中突出顯示的敏感性，與我們 1 月份提供的初步預期相比，最終結果將對 2024 年 GAAP 每股收益產生約 0.50 美元的影響。請記住，FAS 退休金收入本質上是非現金。較高的 CAS 估計將為我們的現金流帶來適度的好處，但可能會對更新季度的 EAC 產生適度的下行影響，這與今年的模式一致。

Speaking of cash flow, we continue to see a path to grow our cash flows at a greater than 20% CAGR next year and through 2025 with further expansion in the following years. As is our practice, we'll provide our latest multiyear outlook for free cash flows on the January earnings call. We remain confident in the long-term value creation opportunity from free cash flow expansion and disciplined capital deployment through the rest of the decade.

說到現金流，我們繼續看到明年和到 2025 年現金流將以超過 20% 的複合年增長率增長，並在接下來的幾年中進一步擴張。按照我們的慣例，我們將在一月份的財報電話會議上提供最新的多年自由現金流展望。我們對未來十年自由現金流擴張和嚴格資本部署帶來的長期價值創造機會仍然充滿信心。

With that, let's open the call up for questions.

接下來，讓我們開始提問。

(Operator Instructions) Our first question comes from Douglas Harned with Bernstein.

（操作員說明）我們的第一個問題來自伯恩斯坦的道格拉斯·哈尼德。

In Aeronautics, you're raising your top line guidance. Dave, you talked about this. I mean, Kathy, we've talked about this subject many times, with the valley that you had kind of forecast for revenues this year as legacy programs declined. But things are getting better. So what are the puts and takes here that appear to be starting you on a growth path going forward? And given the mix, do you still see Aeronautics is able to maintain 10% margins in the coming years?

在航空領域，您正在提高您的頂線指導。戴夫，你談到了這個。我的意思是，凱西，我們已經多次討論過這個話題，隨著遺留項目的下降，你對今年的收入做出了某種預測。但情況正在好轉。那麼，這裡的哪些看跌期權和採取的舉措似乎可以讓您走上未來的成長之路呢？考慮到這種組合，您是否仍然認為航空業能夠在未來幾年保持 10% 的利潤率？

Thanks, Doug. So the puts and takes that we've been talking about have materialized as we expected. The biggest factor was the programs that were declining are largely through our year-over-year comparison now. Those include Global Hawk, which is in sustainment; Triton, which is still in production. But as we look forward, that rate is fairly stable and so it is not contributing to significant growth. What is contributing to growth is B-21, and we expected that ramp to start this year and continue and we still anticipate that. And then other stabilizing factors of the F-35, E-2D large programs that have generally remained constant.

謝謝，道格。因此，我們一直在談論的看跌期權和看跌期權已經如我們預期的那樣實現了。最大的因素是，下降的項目主要是透過我們現在的同比比較得出的。其中包括正在維持的「全球鷹」； Triton，仍在生產中。但正如我們展望的那樣，該比率相當穩定，因此不會對顯著成長做出貢獻。推動成長的是 B-21，我們預計這種成長將於今年開始並持續下去，我們仍然預期這一點。然後F-35、E-2D大型專案的其他穩定因素整體保持不變。

As we look forward, we see that same profile in those program categories, and that will contribute to growth at AS. We do expect that margin rates will be near that 10% mark that we've been talking about. And we've gone through, again, those major categories of the portfolio and how they contribute. Our mature production is about 60% of the portfolio and that tends to have above 10% margins, whereas the B-21 has contributed lower margins and will, as we move into production, contribute 0 on the production. That's our planning assumption, of course. And so it's the mix of that entire portfolio that brings us to that approximately 10% expectation toward the near to midterm.

展望未來，我們將在這些項目類別中看到相同的情況，這將有助於 AS 的成長。我們確實預計保證金率將接近我們一直在談論的 10% 大關。我們再次了解了投資組合的這些主要類別以及它們如何做出貢獻。我們的成熟生產約佔產品組合的 60%，其利潤率往往高於 10%，而 B-21 的利潤率較低，並且當我們投入生產時，其對生產的貢獻為 0。當然，這是我們的計劃假設。因此，正是整個投資組合的組合讓我們對近期到中期的預期約為 10%。

And then when you look forward into 2024, I know in the guidance today, you said 4% to 5% increase in sales, 4% to 5% increase in operating income. I mean that implies really no margin expansion overall in 2024. Can you talk about that and just how you're thinking about margin progression going forward?

然後，當您展望 2024 年時，我知道在今天的指導中，您說銷售額增加 4% 至 5%，營業收入增加 4% 至 5%。我的意思是，這實際上意味著 2024 年整體利潤率不會成長。您能談談這一點以及您如何考慮未來的利潤率成長嗎？

Absolutely. So at this point in the year, as is normal, we wanted to provide an outlook. They are broad ranges. So the 4% to 5% both for sales and operating margin, it gives us opportunity to do further planning and characterizing of the budget as that becomes more clear, and we'll provide more precise guidance in January.

絕對地。因此，在今年的這個時候，正如往常一樣，我們希望提供展望。它們的範圍很廣。因此，銷售額和營業利潤率均為 4% 至 5%，這讓我們有機會在預算變得更加明確時進行進一步規劃和描述，我們將在一月份提供更準確的指導。

What I would say is that we are still on track for the trends that we have spoken of in operating margin. We see improvements, and that is reflected in our guidance for 2023 in the fourth quarter, again, sequential improvement over Q3 performance. And we expect as we move into next year, there are continued opportunities for improvement in operating margins. They are related to macroeconomic trends largely inflation, labor cost, productivity. And so we'd like to get a little bit more time under our belt before we get concrete about what that improvement might look like. So we are expecting some modest margin rate improvement into next year as we have outlined for Q4 of this year.

我想說的是，我們仍然處於我們所說的營業利潤率趨勢的軌道上。我們看到了改進，這也反映在我們對 2023 年第四季的指導中，再次，比第三季的業績連續改善。我們預計，隨著明年的到來，營業利潤率將有持續改善的機會。它們與宏觀經濟趨勢有關，主要是通貨膨脹、勞動成本、生產力。因此，在我們具體了解改進可能會是什麼樣子之前，我們希望多花一點時間。因此，正如我們對今年第四季的概述那樣，我們預計明年的利潤率會出現小幅改善。

I also just want to point to the fact that the free cash flow growth is the real point for our investors to understand, while earnings growth will be there, we also have headwinds that have historically in the last couple of years, challenged us on free cash flow that are dissipating. We've talked about -- and I'm sure we'll talk more on today's call about Section 174, which is a decreasing headwind over time. We also see the pension headwind curtailing. And then, of course, since we reduce our CapEx spend starting in 2025, even more robust free cash flow growth. But looking at 20% year-over-year free cash flow growth is really an important milestone for us. and something we're very focused on delivering.

我還想指出這樣一個事實，即自由現金流的增長是我們投資者真正需要理解的一點，雖然盈利增長將會存在，但我們也面臨著過去幾年曆史上對我們的自由現金流構成挑戰的阻力。正在消散的現金流。我們已經討論過——而且我確信我們會在今天的電話會議上更多地討論第 174 條，隨著時間的推移，該條款的阻力會逐漸減少。我們也看到退休金逆風正在減弱。當然，由於我們從 2025 年開始減少資本支出，自由現金流成長將更加強勁。但自由現金流年增 20% 對我們來說確實是一個重要的里程碑。以及我們非常專注於交付的東西。

Our next question comes from Ronald Epstein with Bank of America.

我們的下一個問題來自美國銀行的羅納德·愛潑斯坦。

Yes. Across the industry, there's been a lot of discussion about from supply chain capacity constraints, labor constraints. One thing that's popped up in a lot of discussions is just the availability of solid rocket motors for missiles and so on and so forth. Just broadly, Kathy, how is Northrop handling? You're getting a surge in demand at a time where kind of post COVID and all that, I mean, labor has been tough and supply chains are tough. I mean how is it going? And what's Northrop doing to handle that?

是的。在整個產業中，關於供應鏈產能限制、勞動力限制的討論很多。在許多討論中出現的一件事就是用於導彈等的固體火箭發動機的可用性。簡單來說，凱西，諾斯羅普處理得怎麼樣？在新冠疫情之後，勞動力和供應鏈都面臨困難，需求激增。我的意思是進展如何？諾斯羅普正在採取什麼措施來解決這個問題？

Ron, we got ahead of seeing the demand, not quite to the degree that the demand has increased in the last 18 months, but we had forecasted an increase in demand, particularly in our solid rocket motor business, but broadly as we've been ramping up for production of satellites, aircraft and mission systems capability across the board. It's why our CapEx has been elevated. And so first and foremost, we did what's necessary, and that is invest in our workforce and our facilities to be able to support that demand. And it's what's allowing us to support both our direct customers and prime who are now coming to us at for that capability. We are going to continue to do that, and that's why we still have some robust CapEx plans in place for 2024 reflected in the outlook we provided.

Ron，我們提前看到了需求，雖然沒有達到過去 18 個月需求增加的程度，但我們預測需求會增加，特別是在我們的固體火箭發動機業務中，但總的來說，正如我們一直以來的那樣全面提升衛星、飛機和任務系統能力的生產。這就是我們的資本支出提高的原因。因此，首先也是最重要的是，我們做了必要的事情，那就是投資我們的勞動力和設施，以便能夠支持這項需求。這使得我們能夠為我們的直接客戶和主要客戶提供支持，他們現在正在向我們尋求這種能力。我們將繼續這樣做，這就是為什麼我們仍然制定了一些穩健的 2024 年資本支出計劃，這反映在我們提供的前景中。

We are seeing labor back to pre-pandemic levels in terms of our ability to hire, retain. Certainly, inflation is causing more labor rate escalation than we saw pre-pandemic, but we are able to get the workers that we need. Our focus now is on productivity. And there too, we've invested in training. We've invested in standard work instructions in digital technology, all of which are enabling productivity in our workforce. That has been a little slower to materialize with our supply chain. And so we are spending a lot of Northrop Grumman resource with our suppliers, co-locating with them. and helping them to improve productivity as well. And once we remove that bottleneck, I think we'll, as an industry, be able to no longer have capacity to be our constraining factor.

就招募和留住人才的能力而言，我們看到勞動力回到了疫情前的水平。當然，通貨膨脹導致的勞動力價格上漲比我們在大流行前看到的要多，但我們能夠獲得我們需要的工人。我們現在的重點是生產力。我們也在培訓方面進行了投資。我們投資了數位科技的標準工作指令，所有這些都提高了我們員工的生產力。我們的供應鏈實現這一目標的速度要慢一些。因此，我們在供應商身上投入了大量諾斯羅普·格魯曼公司的資源，與他們共處一地。並幫助他們提高生產力。一旦我們消除了這個瓶頸，我認為作為一個行業，我們將不再有能力成為我們的限制因素。

But with that said, and now we're looking at a supplemental and growing international demand, all of which continue to add to the demand equation. So we are still going to be a bit in a catch-up mode because it does take generally 18 to 24 months to lay in new capacity to support that demand.

但話雖如此，現在我們正在考慮補充和不斷增長的國際需求，所有這些都繼續增加需求方程式。因此，我們仍將處於追趕模式，因為通常需要 18 至 24 個月才能建立新產能來支援這項需求。

Got it. Got it. And then maybe a follow-on for Dave. Is there -- can you give us any update on how you're thinking about the B-21 LRIP? Because that's something that's kind of always on everybody's mind.

知道了。知道了。然後也許是戴夫的後續作品。可以為我們介紹一下您對 B-21 LRIP 的看法嗎？因為這是每個人都一直在思考的事情。

Sure. It's Dave. So we continue to anticipate, as we noted in the earlier part of the call that the first LRIP contract will be awarded in the fourth quarter. That's consistent with our expectations that we've described throughout the year and reliant upon first flight occurring between now and that LRIP contract award. And we continue to evaluate our performance and our outlook on the LRIP phase of the program each quarter and did not make any significant changes to our estimates for that phase during the third quarter. So we'll continue to update everyone over time as we have updates.

當然。是戴夫。因此，正如我們在電話會議的前半部分指出的那樣，我們繼續預計第一份 LRIP 合約將在第四季度授予。這與我們全年描述的預期一致，並且依賴從現在到 LRIP 合約授予之間的首次飛行。我們每季都會繼續評估我們的績效和對該計劃 LRIP 階段的展望，並且在第三季沒有對該階段的估計做出任何重大改變。因此，當我們有更新時，我們將繼續向大家更新。

Our next question comes from Sheila Kahyaoglu with Jefferies.

我們的下一個問題來自 Jefferies 的 Sheila Kahyaoglu。

Kathy, you highlighted a few moments ago that free cash flow growth is the real story here. So I want to focus on that since you mentioned it. Can you talk about multiyear free cash flow growth? You've done so in the past. But how do you think about the biggest drivers from a top line networking -- net income drop-through tax CapEx perspective?

凱西，您剛才強調自由現金流成長才是這裡的真實情況。既然你提到了這一點，我想重點關注這一點。能談談多年自由現金流成長嗎？你過去也這樣做過。但是，您如何看待頂線網路的最大驅動因素——淨利潤下降稅收資本支出的角度？

Sheila, it's Dave. I'm happy to provide some additional color there. The 2024 updates that we provided on the call today should give you a sense for our near-term sales and earnings growth expectations underlying that free cash flow expansion. We do expect to continue to see a leading sales profile in the growth of our business. And as we've talked about, we anticipate long-term margin expansion opportunity as well. And so both of those are foundational to our multiyear free cash flow growth expectations.

希拉，我是戴夫。我很高興在那裡提供一些額外的顏色。我們今天在電話會議上提供的 2024 年更新應該能讓您了解我們自由現金流擴張背後的近期銷售和獲利成長預期。我們確實期望在我們的業務成長中繼續看到領先的銷售狀況。正如我們所討論的，我們預計還會出現長期利潤率擴張的機會。因此，這兩者都是我們多年自由現金流成長預期的基礎。

On top of that, we've talked about the last couple of years that the 2023 and 2024 would be a period of peak capital intensity for the business, and that is consistent with our current expectation. Large programs that we've had for a number of years as well as new wins we've had that have grown our backlog so significantly over the past couple of years have all contributed to a peak period of capital intensity right now that we have clarity on sources of decline in the middle of the decade. And so we expect that capital intensity to be alleviating in 2025 and beyond.

最重要的是，我們在過去幾年中談到，2023 年和 2024 年將是業務資本密集度最高的時期，這與我們目前的預期一致。我們多年來進行的大型項目以及過去幾年中我們的積壓量顯著增加的新勝利都促成了資本密集度的高峰期，因此我們現在很清楚關於本世紀中期衰退的根源。因此，我們預期 2025 年及以後資本密集度將會減輕。

Working capital performance is really among the best in class at this point. And even with a modest headwind from the progress pay changes, we anticipate continuing to be able to deliver stable working capital performance, not a meaningful driver of headwind or tailwinds there.

目前，營運資金績效確實是同類中最好的。即使進度薪酬變化帶來了適度的阻力，我們預計仍將能夠提供穩定的營運資本績效，而不是那裡的阻力或順風的有意義的驅動因素。

And then you get to the 2 items Kathy mentioned earlier, modestly higher CAS pension recoveries currently projected over the next few years. Of course, those will continue to fluctuate based on -- primarily on asset returns, but other actuarial changes that are possible as well.

然後你會看到凱西之前提到的兩個項目，目前預計未來幾年 CAS 退休金回收率將略有上升。當然，這些將繼續波動——主要是資產回報率，但也可能發生其他精算變化。

And then on the cash tax side, as we've noted, a pretty stable outlook for free -- for cash taxes from what we've been anticipating previously, and that outlook is for declining cash taxes over the next several years largely driven by the Section 174 movement as we get through the period of amortization over these 5 years. So all in all, a number of key tailwinds most critical of which, of course, is the expectation of continued growth and margin opportunity in the business.

然後在現金稅方面，正如我們所指出的，免費現金稅的前景相當穩定，與我們之前的預期一致，而這種前景是未來幾年現金稅下降的主要原因當我們度過這5 年的攤銷期時，第174 條變動。總而言之，有許多關鍵的推動因素，其中最關鍵的當然是業務持續成長和利潤機會的預期。

Our next question comes from Myles Walton with Wolfe Research.

我們的下一個問題來自沃爾夫研究中心的邁爾斯·沃爾頓。

Kathy, could you comment a bit on relative growth rates at a minimum for the segments next year? And just playing off the space backlog, which continues to expand pretty wildly, maybe just dig in a little bit deeper as to how the complexion of that backlog might play out on hopefully a margin expansion profile from here?

凱西，您能否至少對明年各細分市場的相對成長率發表一些評論？只是利用空間積壓，它繼續瘋狂地擴張，也許只是更深入地挖掘積壓的情況可能如何在希望從這裡開始的利潤擴張曲線上發揮作用？

Yes, Myles. So as we have been saying all year long, we expect space growth to moderate as we go into next year, still be our fastest-growing segment, but the growth profile across the 4 businesses will be more similar next year, more tightly clustered, if you will, around that growth rate we're projecting for the enterprise at 4% to 5%. DS and MS will likely be around that profile in the mid-single-digit range, although I will say DS this year is experiencing some upward pressure on growth due to the demand that we spoke about, particularly globally for air and missile defense and weapon systems.

是的，邁爾斯。因此，正如我們全年一直在說的那樣，我們預計明年空間成長將放緩，仍然是我們成長最快的細分市場，但明年 4 個業務的成長狀況將更加相似，集群更加緊密，如果您願意的話，我們預期企業的成長率約為4% 至5%。 DS 和 MS 可能會處於中等個位數範圍內，儘管我會說，由於我們談到的需求，特別是全球範圍內對防空和導彈防禦以及武器的需求，今年 DS 正在經歷一些增長上行壓力系統。

If that continues, that would continue to push DS' growth expectations even higher into 2024. And then AS will still be in growth territory, but as we've talked about, it will be modest growth into 2024. So that gives you a sense of the relative order that we see. And for Space, in particular, while we have approximately doubled that business in the last 5 years, so it's been just on a tremendous growth tier. We are very focused now on the performance of that backlog and ensuring that we can, as you said, deliver the margin expansion, and that is still very much our pathway in 2024.

如果這種情況持續下去，這將繼續推高DS 的成長預期，直到2024 年。然後AS 仍將處於成長區域，但正如我們所討論的，到2024 年它將是溫和的成長。所以這給了你一種感覺我們看到的相對順序。特別是對於太空業務，雖然我們在過去 5 年中將該業務增長了大約一倍，但它仍處於巨大的成長階段。我們現在非常關注積壓訂單的表現，並確保我們能夠像您所說的那樣實現利潤率擴張，這仍然是我們 2024 年的發展路徑。

And can you just clarify on the underlying margins, EACs were still negative within space. Is there -- and we've seen that for now 5 quarters. Are there programs you could point to, to say, okay, these are running off and that's why we're going to have this margin expansion profile?

您能否澄清一下基本利潤，EAC 在太空領域仍然是負面的。是否存在——我們已經看到這一點已經有五個季度了。您是否可以指出一些計劃，說，好吧，這些計劃正在運行，這就是我們將擁有這種利潤擴張概況的原因？

Myles, this is Dave. On that one, there has not been any 1 or 2 particular programs driving the majority of the negative EAC adjustments you're referring to over the last year plus. It's broader. And to Kathy's earlier point, there has been so much backlog expansion that there are so many new programs in our space business over these last few years, examples of really strong market share gains. And it's been across a number of those programs that we've seen EAC pressure given the newness of those development programs. And so I wouldn't characterize them as falling off anytime soon.

邁爾斯，這是戴夫。就這一點而言，過去一年多來，並沒有任何 1 或 2 個特定計劃推動了您提到的大部分負面 EAC 調整。它更廣泛。對於凱西之前的觀點，在過去的幾年裡，我們的航太業務中出現瞭如此多的積壓擴張，以至於出現瞭如此多的新項目，這是市場份額增長真正強勁的例子。鑑於這些開發項目的新穎性，我們在許多項目中都看到了 EAC 的壓力。所以我不會認為它們很快就會脫落。

If anything, we see opportunities for a number of programs in our Space business to transition to more mature phases of those programs, including production phases over the next couple of years, which is important to the broader margin expansion opportunity point that Kathy described. So I think what we see here is an opportunity for margin growth as we see the continued stabilization of the macro factors that have really been underlying industry-wide pressures over the past couple of years and the continued maturity of those programs over those same couple of years coming up.

如果有的話，我們看到我們的太空業務中的許多項目有機會過渡到這些項目的更成熟階段，包括未來幾年的生產階段，這對於凱西描述的更廣泛的利潤擴張機會點非常重要。因此，我認為我們在這裡看到的是利潤成長的機會，因為我們看到宏觀因素的持續穩定，這些因素在過去幾年中確實構成了整個行業的壓力，而這些計劃在這幾年中持續成熟。未來幾年。

Our next question comes from Kristine Liwag with Morgan Stanley.

我們的下一個問題來自摩根士丹利的克里斯汀·利瓦格。

Kathy, on the Stand in Attack Weapon win, some of your competitors indicated that the risk/reward profile wasn't as strong in this particular program. Can you provide more color on your competitive edge and how this pursuit drives with the risk tolerance you've demonstrated elsewhere, like on the decision not to bid on NGAD as a prime?

凱西，在攻擊武器獲勝時，您的一些競爭對手錶示，該特定計劃的風險/回報狀況並不那麼強。您能否提供更多關於您的競爭優勢的信息，以及這種追求如何推動您在其他地方展示的風險承受能力，例如決定不競標 NGAD 作為主要項目？

Yes. Thank you. So in my comments, I alluded to the fact that AARGM is a product line that we have. We've talked about the base AARGM product, the AARGM-ER, or extended range, and now the SAW award and with each of those products are building off of a mature technical baseline.

是的。謝謝。因此，在我的評論中，我提到了 AARGM 是我們擁有的產品線這一事實。我們已經討論了基本的 AARGM 產品、AARGM-ER 或擴展範圍，現在 SAW 獎以及這些產品中的每一個都建立在成熟的技術基線之上。

As I've talked about our approach to thinking about fixed price, I have often said fixed price is appropriate where it's either a commercial item or an item that has reached a design maturity and been risk reduced to where we know what it will take to deliver that product. Because of the maturity of AARGM and us having a product line that met the Air Force requirements for SOL to bring forward, we are able to reduce cost schedule and, of course, have better risk management. That allows us to have the risk tolerance then to bid fixed price.

正如我談到我們考慮固定價格的方法時，我經常說固定價格適用於商業項目或已達到設計成熟度並且風險已降低到我們知道需要採取什麼措施的項目。交付該產品。由於 AARGM 的成熟以及我們擁有滿足空軍對 SOL 提出的要求的產品線，我們能夠降低成本進度，當然也能進行更好的風險管理。這使我們能夠有風險承受能力來投標固定價格。

And I recognize that in competition, there are many factors, but when a company has invested and gotten the mature product line, there is a natural advantage that comes with that. And that's the situation we found ourselves in with SAW in that specific competition.

我意識到，在競爭中，有很多因素，但當一家公司投資並獲得成熟的產品線時，就有天然的優勢。這就是我們在特定比賽中發現 SAW 的情況。

I had a follow-up question on the B-21. Does the current budget standoff in D.C. impacts flight testing or the timing of the LRIP award?

我有一個關於 B-21 的後續問題。華盛頓特區目前的預算僵局是否會影響飛行測試或 LRIP 授予的時間？

No, it does not. As we look at the timing of the LRIP award, as Dave said, we still expect that to happen this year. And as we have talked about before, first flight is a milestone that the Air Force is looking to achieve before they make that award, and we are on track still anticipating first flight this year.

不，不是的。正如戴夫所說，當我們考慮 LRIP 授予的時間時，我們仍然預計今年會發生。正如我們之前談到的，首次飛行是空軍在獲得獎項之前希望實現的里程碑，我們仍然期待今年的首次飛行。

Our next question comes from Robert Stallard with Vertical.

我們的下一個問題來自 Vertical 的 Robert Stallard。

Kathy, I just wanted to follow up on your budget commentary at the start of the call. I'm wondering if you're putting any contingency plans in place in case we get arbitrary DoD budget cuts as a result of this craziness in Congress.

凱西，我只是想跟進您在電話會議開始時的預算評論。我想知道你們是否制定了任何應急計劃，以防我們因國會的瘋狂行為而任意削減國防部預算。

So Rob, we have looked -- it would be irresponsible of us not to run some numbers and look at where we might have risk. And as I mentioned in my commentary, we are working with our customers to navigate any budget challenges that they see, either as a result of not getting appropriations passed in a timely fashion in accordance with the Fiscal Responsibility Act requirements or even as they look into 2025 and the pressures that they have there with a minimal top line growth rate. But we are not seeing any significant risks to our portfolio at this time, but we will continue to monitor that as such as discussions progress. We're just very pleased to see that the House Speaker and we should expect to begin to see those bills moving through Congress now.

所以羅布，我們已經研究過——如果我們不運行一些數據並看看我們可能有風險的地方，那將是不負責任的。正如我在評論中提到的，我們正在與客戶合作，應對他們看到的任何預算挑戰，無論是由於沒有根據《財政責任法案》的要求及時通過撥款，還是在他們調查時2025 年以及他們在收入成長率極低的情況下所面臨的壓力。但目前我們沒有看到我們的投資組合有任何重大風險，但我們將繼續監控這種情況，例如討論進展。我們非常高興地看到眾議院議長和我們現在應該開始看到這些法案在國會獲得通過。

Yes. And then as a follow-up, you mentioned the strong demand on the defense export market at the moment. I was wondering if there could be any capital deployment opportunities there, either Northrop Grumman acquiring companies overseas or making other investments.

是的。作為後續，你提到目前國防出口市場的強勁需求。我想知道那裡是否有任何資本配置機會，要么諾斯羅普·格魯曼公司收購海外公司，要么進行其他投資。

We are already making capital investments that support that growing demand in missile defense and armaments. And so as we have talked about our CapEx investments over the last several years and planning forward into 2024, those do support our international product lines. We are not seeing a significant increase that we would anticipate in that demand signal yet. We are monitoring it both through the supplemental, but we've already baked in a good bit of product line growth that we've accounted for in our CapEx planning over the next several years. And so at this point in time, I don't see that providing more upward pressure on CapEx.

我們已經進行資本投資，以支持導彈防禦和軍備不斷增長的需求。因此，當我們談論過去幾年的資本支出投資併計劃到 2024 年時，這些投資確實支持了我們的國際產品線。我們尚未看到需求訊號出現預期的顯著成長。我們正在透過補充來監控它，但我們已經在未來幾年的資本支出規劃中考慮了產品線的大量成長。因此，目前我認為這不會對資本支出帶來更大的上行壓力。

Our next question comes from Cai von Rumohr with TD Cowen.

我們的下一個問題來自 Cai von Rumohr 和 TD Cowen。

Yes. So to go back to Doug's question, I mean, you're looking for basically flat margins next year. And kind of in recent quarters, Kathy, you've made the point about the opportunity for space margins to go up. Certainly, if I look at defense, basically with more munitions moving up, I think you've made the point that there should be some opportunity there. You've brought the target down for MS this year, which would suggest an easier base of comparison for next year. I think you've talked about Aero as being roughly flat.

是的。回到道格的問題，我的意思是，你希望明年的利潤率基本上持平。凱西，在最近幾個季度，您已經提出了空間利潤率上升的機會。當然，如果我看看防守，基本上隨著更多彈藥的增加，我認為你已經指出那裡應該有一些機會。您已經降低了今年 MS 的目標，這表明明年的比較基礎更容易。我想你已經說過 Aero 是大致平的。

But as you look at your portfolio, is there opportunity for those margins to move up next year? And if so, which of the sectors that have the greatest opportunity for margin improvement and which are the ones that perhaps face greatest risk that margins would be flat to down?

但當你審視你的投資組合時，明年這些利潤率是否有機會上升？如果是這樣，哪些產業最有機會提高利潤率，哪些產業可能面臨利潤率持平甚至下降的最大風險？

Yes. I like the way you're thinking. It's exactly the challenge that me and the team are discussing amongst ourselves is to how we do drive margin improvements next year. And in the Q2 call, I laid out for our investors what that path is and the key factors associated with improvement. And let me just touch on each of those and then I can tie it also to where the segments see the greatest opportunity. For macroeconomic factors, I've talked about those already on the call. We are seeing inflation be a bit secure than we had hoped at this point in time. We are incorporating that into our forward estimate, but it is impacting our ability to return to higher levels of profitability factor.

是的。我喜歡你的思考方式。這正是我和團隊正在討論的挑戰，我們明年如何推動利潤率的提升。在第二季的電話會議中，我向投資者闡述了這條道路是什麼以及與改善相關的關鍵因素。讓我簡單談談其中的每一個，然後我也可以將其與細分市場看到最大機會的地方聯繫起來。對於宏觀經濟因素，我已經在電話會議中談到了那些因素。我們看到通膨比我們目前所希望的要安全一些。我們正在將其納入我們的前瞻性預測中，但這正在影響我們恢復更高水準的獲利能力的能力。

Productivity is another area where we are working to improve productivity, not just within our company, but our supply chain. That is opportunity. That would be upside to a flattish look next year. Although, as I also indicated, we are expecting some modest improvement in margin rate next year. What then we look at is the mix, and that has been a factor for both base and mission systems over the last couple of years, particularly notable for mission systems this year. We don't see a significant mix shift going into next year. It is a very gradual mix shift. And so that -- those 2 pieces of the business will still feel some margin rate pressure until they can shift to more production in the portfolio.

生產力是我們努力提高生產力的另一個領域，不僅在我們公司內部，而且在我們的供應鏈中。那就是機會。這將有利於明年的平淡外觀。儘管如此，正如我也指出的那樣，我們預計明年的保證金率會略有改善。然後我們關注的是混合，這一直是過去幾年基地和任務系統的一個因素，特別是今年的任務系統。我們認為明年不會有重大的組合轉變。這是一個非常漸進的混合轉變。因此，這兩項業務仍將感受到一定的利潤率壓力，直到它們能夠轉向投資組合中的更多生產。

As you note, our Defense Systems business has the most both top line and margin upsize that could come as the result of growing international demand as well as what we see domestically, particularly through the supplemental. Those are uncertain at the moment. So we do factor those in our plan, but that could be a source of upsize. But then, of course, we are managing risks across the entire portfolio. And so when we put all of that together, we're looking at some modest rate improvement into next year and really striving to do better. But at this point in the year, we are very comfortable with what we've laid out as a set of expectations.

正如您所指出的，我們的國防系統業務的營收和利潤率增長幅度最大，這可能是國際需求成長以及我們國內需求成長的結果，特別是透過補充。這些目前還不確定。因此，我們確實將這些因素納入我們的計劃中，但這可能是擴大規模的一個來源。當然，我們正在管理整個投資組合的風險。因此，當我們將所有這些放在一起時，我們希望明年的利率會有所改善，並真正努力做得更好。但在今年的這個時候，我們對我們所設定的一系列期望感到非常滿意。

Our next question comes from Ken Herbert with RBC Capital Markets.

我們的下一個問題來自加拿大皇家銀行資本市場的肯·赫伯特。

Kathy, maybe I just wanted to follow up on the strong bookings this year. Can you call out or maybe help quantify how much of that could have been or is international? And as we think about sort of this growing set of international opportunities, maybe not so much in '24, but how much international growth could you see next year and into '25? And I guess, more importantly, how could that impact margins as I think about maybe international being slightly accretive to margins?

凱西，也許我只是想跟進今年的強勁預訂。您能否指出或幫助量化其中有多少可能是或已經是國際性的？當我們思考這種不斷增長的國際機會時，也許在 24 年不會有那麼多，但明年和進入 25 年你會看到多少國際成長？我想，更重要的是，這會如何影響利潤率，因為我認為國際業務可能會略微增加利潤率？

Yes, Ken. So you're pulling on all the right threads. Our bookings are up for the international portfolio this year. And as we look into our future plans, we expect that, that trend will continue. It takes a little while to then materialize that into sales in a meaningful way. So we see a gradual shift in terms of the percentage of our overall sales that will come from international.

是的，肯。所以你正在拉動所有正確的線索。今年我們的國際組合預訂量增加。當我們研究未來計劃時，我們預計這種趨勢將持續下去。需要一段時間才能以有意義的方式將其轉化為銷售。因此，我們看到來自國際市場的總銷售額的百分比正在逐漸改變。

We've talked about achieving a double-digit growth rate. I would expect that not necessarily in 2024, but into 2025 because of the time it takes to ramp sales on these awards. And so you could also expect that any upward margin opportunity would also be more material starting in that 2025 time frame than 2024, but we are actively working those opportunities now so that they do materialize in that time frame.

我們談到了實現兩位數的成長率。我預計不一定要在 2024 年，而是要到 2025 年，因為要提高這些獎項的銷售需要時間。因此，您也可以預期，從 2025 年開始，任何利潤率上升的機會都將比 2024 年更重要，但我們現在正在積極利用這些機會，以便它們確實在該時間範圍內實現。

That's helpful. And is there any way to think about just with, obviously, a lot of what we hear in the geopolitical environment, are you seeing that yet translate into sort of bid opportunities when you think about international? I'm just trying to get a sense as to with all of the -- all of sort of this growing expectation, how much you're actually seeing that yet transpire or actually materialize in terms of real opportunity you're going after?

這很有幫助。顯然，我們在地緣政治環境中聽到的許多消息，是否有任何方法可以考慮，當您考慮國際時，您是否看到這些消息並轉化為某種競標機會？我只是想了解一下，對於所有這些不斷增長的期望，你實際上看到了多少，但在你所追求的真正機會方面，你實際上看到了多少？

We are seeing it in signals of demand. So I mentioned on our last call that we have over 10 countries that have expected -- expressed interest in our IBCS product line. Today, I noted another dozen or so that have expressed interest in AARGM. As we look forward, we do expect that, that demand signal for many of those countries will translate into contracts it takes time. And that's why I was talking about seeing 2024 is a time frame where we'll be working to translate those demand signals into contracts, but 2025 being more the time frame we expect them to materialize. And I'd say the same is true with the domestic marketplace as we look to replenish U.S. stockpiles or to work through the supplemental budget that I would expect to be more material for us in 2025, but we're working now to ensure that we're qualified to be a supplier on either second source or new missile programs.

我們在需求訊號中看到了這一點。因此，我在上次電話會議中提到，已有 10 多個國家對我們的 IBCS 產品線表示了興趣。今天，我注意到另外十幾個人也表達了對 AARGM 的興趣。展望未來，我們確實預計，許多國家的需求訊號將轉化為合同，這需要時間。這就是為什麼我說 2024 年是我們將努力將這些需求訊號轉化為合約的時間範圍，但 2025 年更是我們期望它們實現的時間範圍。我想說，國內市場也是如此，因為我們希望補充美國庫存或製定補充預算，我預計這對我們來說在 2025 年會更加重要，但我們現在正在努力確保我們有資格成為第二來源或新導彈計劃的供應商。

Our next question comes from Scott Deuschle with Deutsche Bank.

我們的下一個問題來自德意志銀行的 Scott Deuschle。

Kathy, in the emergency supplemental request from the White House, there was $2.6 billion included for classified Air Force procurement programs. Do you have any sense for whether that could potentially help support your programs in the event that there's an extended CR here? Or is that just entirely a black box as we might otherwise expect?

凱西，在白宮的緊急補充請求中，有26億美元用於空軍機密採購計畫。如果這裡有延長的 CR，您是否知道這是否可能有助於支持您的計劃？還是正如我們所期望的那樣，這完全是一個黑盒子？

Yes, there's really nothing I can comment on with regard to that, Scott. I will simply say we do continue to work with the Air Force on ensuring that we have the resources necessary to make B-21 program successful.

是的，斯科特，對此我真的沒什麼好評論的。我只想說，我們確實會繼續與空軍合作，確保我們擁有使 B-21 專案成功所需的資源。

Okay. Fair enough. And then Dave, the updated margin guide on MS implies something like a 15.9% margin in the fourth quarter. Just curious if you could talk a little bit about the drivers there. Obviously, you've done above 16% before so I assume something like what we've seen historically. But just curious for any commentary on drivers.

好的。很公平。然後戴夫，MS 更新的利潤率指南暗示第四季度的利潤率約為 15.9%。只是好奇你能否談談那裡的司機。顯然，你之前已經做到了 16% 以上，所以我假設類似於我們歷史上看到的情況。但只是想知道有關司機的評論。

Sure. A couple of thoughts there. One, you saw a similar trend last year in our MS business with its strongest margin performance in the fourth quarter of the year, driven by the mix of business that we tend to see spike in the fourth quarter with more predominance of mature fixed price programs in that fourth quarter sales mix. We anticipate a similar trend this year.

當然。有一些想法。第一，去年我們的MS 業務也出現了類似的趨勢，今年第四季度的利潤率表現最為強勁，這是由我們傾向於在第四季度看到峰值的業務組合推動的，成熟的固定價格計劃佔據了主導地位在第四季的銷售組合中。我們預計今年也會出現類似的趨勢。

With that said, need to continue to perform and execute well and with efficiency across that MS portfolio to deliver on that result. In aggregate, the 23% margin guidance change for MS is really driven by mix. A lot of the growth in MS this year has been in critical work in the restricted portfolio that tends to be at this phase in its life cycle cost-type work. There is opportunity for that work to shift back towards more fixed price over time. But the fact that most of the growth in MS this year has been driven by growth in cost-type contracts has been a pressure on its margin rate. With that said, it along with the rest of our businesses drove margin dollar growth year-over-year in Q3, and we anticipate the same trend in Q4.

話雖如此，需要在整個 MS 產品組合中繼續有效率地執行和執行，才能實現這一結果。總的來說，微軟 23% 的利潤指導變化實際上是由混合驅動的。今年 MS 的大部分成長都集中在受限的投資組合中的關鍵工作，這些工作往往處於其生命週期成本類型工作的這個階段。隨著時間的推移，這項工作有機會轉向更固定的價格。但事實上，微軟今年的成長大部分是由成本型合約的成長所推動的，這對其利潤率構成了壓力。話雖如此，它與我們的其他業務一起推動了第三季的利潤率同比增長，我們預計第四季度也會出現同樣的趨勢。

Our next question comes from Gavin Parsons with UBS.

我們的下一個問題來自瑞銀集團的加文‧帕森斯。

Dave, I was hoping you could go into just a little bit more detail on the Section 174 change and what the offset is given it would seem like that has to be pretty sizable, especially if you get some recapture from 2022?

戴夫，我希望您能更詳細地了解第 174 條的變更，以及給出的偏移量，看起來必須相當大，特別是如果您從 2022 年重新獲得一些內容的話？

Sure. Happy to go into that. I think the important takeaway here is that our cash tax forecast is, in the aggregate, largely unchanged, and that remains a tailwind for our free cash flow outlook over these next several years. To your point, 174-driven taxes have come down a bit in that outlook. That's largely due to lower-than-projected cost applicable to the 174 guidelines, not a change in our interpretation of the latest guidelines. To be clear there, we will continue to assess any future guidance that comes out on 174 and continue to apply our best interpretation of that guidance to our own costs and the appropriate and applicable cost there. With that said, the issue that others in the industry have discussed around the difference between cost type and fixed price R&D-related expenditures is less impactful for us than it appears to be for some of our peers, particularly given the reduction in our 2022 174-driven costs. So less of an impact based on our interpretation than for others.

當然。很高興能深入探討這一點。我認為這裡重要的一點是，我們的現金稅預測總體而言基本上沒有變化，這仍然是我們未來幾年自由現金流前景的推動力。就你的觀點而言，174 驅動的稅收在這一前景中有所下降。這主要是由於適用於 174 條指南的成本低於預期，而不是我們對最新指南的解釋發生了變化。需要明確的是，我們將繼續評估 174 上發布的任何未來指南，並繼續將我們對該指南的最佳解釋應用於我們自己的成本以及那裡適當且適用的成本。話雖如此，業內其他人圍繞成本類型和固定價格研發相關支出之間的差異討論的問題對我們的影響不如對我們的一些同行的影響，特別是考慮到我們 2022 年 174驅動成本。因此，根據我們的解釋，影響比其他人的影響要小。

So with all of that said, there are some puts and takes across a business of our scale with as many open tax years as we have, and we disclose all this in some clarity in our 10-Qs every quarter. There is a balance of upside and downside items that are largely driving an unchanged cash tax forecast.

綜上所述，在我們這樣規模的企業中，有一些看跌期權和看跌期權，我們有盡可能多的開放納稅年度，並且我們在每個季度的10-Q 中都清晰地披露了所有這些內容。上行和下行項目之間存在平衡，這在很大程度上推動了現金稅預測不變。

Got it. That's helpful. Kathy, you mentioned stickier inflation. Any update on discussions with customers for relief on that front?

知道了。這很有幫助。凱西，你提到了黏性通膨。與客戶討論緩解這方面問題的最新情況？

Discussions continue, and I think we're making good progress in having awareness of the issue. And with Congress setting a precedent last year of having some funds available, I'm hopeful that once again this year, we will see funds appropriated that give the departments the flexibility, both in language and dollars to address these issues.

討論仍在繼續，我認為我們在認識到這個問題方面取得了良好進展。由於國會去年開創了提供一些資金的先例，我希望今年我們將再次看到撥款，使各部門在語言和資金方面具有靈活性來解決這些問題。

Our next question comes from Seth Seifman with JPMorgan.

我們的下一個問題來自摩根大通的 Seth Seifman。

Apologies to be deep in the weeds on the taxes, but kind of what I got left here now. And so I just wanted to ask you, Dave, just to understand that a little better and your interpretation of this. If I look at what Lockheed paid in 174 payments last year, it was like 38%, 39% of their IRAD and you guys paid like 75% of your IRAD. So it would seem like that's a very different interpretation. And it would seem like there -- the guidance is consistent with the idea that IRAD is kind of the basis of what's subject to Section 174. And so maybe if you can provide -- I know we spoke about this, but just a little bit more color on what's different about your business.

很抱歉在稅收問題上陷入困境，但這就是我現在留下的東西。所以我只是想問你，戴夫，只是為了更好地理解這一點以及你對此的解釋。如果我看看洛克希德去年支付的 174 筆款項，就會發現，這相當於他們的 IRAD 的 38%、39%，而你們支付了 IRAD 的 75%。所以這看起來是一個非常不同的解釋。看起來——該指導意見與 IRAD 是第 174 條規定的基礎的想法是一致的。所以也許如果你能提供——我知道我們談到過這一點，但只是一點點更多地展示您的業務的不同之處。

So I appreciate the question, Seth. I know it's been a common line of discussion for us, and it's an interesting topic. I would say this probably isn't the time or the place for us to assess differences in our own interpretation of guidance from peers. We're not familiar with the interpretations of our peers. When it comes to our own view of Section 174, it is broader than IRAD and includes a portion of our contract-driven R&D as well. With that said, as I mentioned, we'll continue to assess potential future guidance, even following on and clarifying guidance provided in September. And we're open to different interpretations based on different guidance we may get in the future.

所以我很欣賞這個問題，賽斯。我知道這是我們討論的共同話題，也是一個有趣的話題。我想說，現在可能不是我們評估我們對同儕指導的解釋差異的時間或地點。我們不熟悉同行的解釋。當談到我們自己對第 174 條的看法時，它比 IRAD 更廣泛，也包括我們合約驅動的研發的一部分。儘管如此，正如我所提到的，我們將繼續評估潛在的未來指導，甚至遵循並澄清 9 月提供的指導。我們對基於未來可能獲得的不同指導的不同解釋持開放態度。

But importantly, as I mentioned, a difference in contract type interpretation is not nearly as impactful for us as others have said it is for them. And so I think, in aggregate, this should be less of a focus. That interpretation difference should be less of a focus for the Street going forward than it has been for us in the recent past. And the important point to take away is that our cash tax forecast hasn't changed in any meaningful way and remains a tailwind for us. It's a small piece of the much more important puzzle that is really strong free cash flow growth opportunity for us over these next 5 years, leading to a lot of optionality as it relates to capital deployment. And I think that's the more important headline.

但重要的是，正如我所提到的，合約類型解釋的差異對我們的影響並不像其他人所說的那樣。所以我認為，總的來說，這應該不是一個焦點。與我們最近相比，這種解釋上的差異應該不再是華爾街未來的焦點。需要注意的重要一點是，我們的現金稅預測沒有任何有意義的變化，並且仍然對我們有利。這只是更重要的難題中的一小部分，這個難題在未來 5 年對我們來說是真正強大的自由現金流成長機會，導致與資本部署相關的大量選擇。我認為這是更重要的標題。

And our final question comes from David Strauss with Barclays.

我們的最後一個問題來自巴克萊銀行的大衛·施特勞斯。

Wanted to ask specifically on B-21 and your guidance for -- it sounds like 10% margins at AS next year. Are you assuming, Kathy, any incremental inflation (inaudible) on B-21 in that?

我想具體詢問 B-21 以及您的指導——聽起來 AS 明年的利潤率為 10%。凱西，你是否假設 B-21 會出現增量通貨膨脹（聽不清楚）？

So we look at the EAC, and it has a number of factors incorporated into our expectations performance, our expectations for the contract terms. And so all of that is factored into what goes into the expectations that I laid out for B-21. And as we've consistently said through the year, we are planning at a 0 profitability. But we have to perform and we are working hard to ensure that, that plan is what we achieve.

因此，我們研究了 EAC，它包含了許多因素，這些因素納入了我們的預期表現以及我們對合約條款的預期。因此，所有這些都被納入我對 B-21 的期望中。正如我們全年一直所說的那樣，我們的盈利能力為 0。但我們必須執行，我們正在努力確保我們實現該計劃。

Okay. And apologies, Dave, I got to go back to Section 174. Just to level set us, are you -- in your free cash flow forecast this year, are you still assuming $700 million impact from Section 174 and stepping down roughly 20% from there next year?

好的。抱歉，戴夫，我必須回到第174 條。為了讓我們了解，您在今年的自由現金流預測中，是否仍然假設第174 條帶來7 億美元的影響，並從第174 條中削減大約20%明年有嗎？

No, I appreciate the clarifying question. We have stepped down about 20% below our prior estimates for the impacts of the annual effect of Section 174, and we've detailed that further in our 10-Q in terms of the impacts on 2022, 2023 and beyond based on the numbers that we've calculated with the benefit of actual cost to apply as we have formulated our 2022 tax return. So it's a bit lower than that. As I mentioned, that's offset by a couple of factors moving in the other direction, which in aggregate, leads to no change in our cash tax forecast for this year or the next couple of years. So no change to that element of the free cash flow guidance.

不，我很欣賞澄清問題。我們對第 174 條年度影響的影響比先前的估計降低了約 20%，並且根據以下數據，我們在 10-Q 中進一步詳細說明了對 2022 年、2023 年及以後的影響：我們在製定2022 年報稅表時，根據實際申請成本進行了計算。所以比這個低一點。正如我所提到的，這被幾個相反方向的因素所抵消，總的來說，我們對今年或未來幾年的現金稅預測沒有變化。因此，自由現金流指導的該要素沒有變化。

Thanks, David. So quickly before concluding the call, I just want to take a moment to acknowledge our team and thank them for their contributions to our company and our customers. And in particular, I want to thank our General Counsel Sheila Cheston, who is retiring after 13 years with the company. Sheila has been instrumental in instilling a culture of strong ethics and she has provided outstanding counsel for the company and been a trusted partner to the Board and to me and the leadership team.

謝謝，大衛。在結束通話之前，我只想花點時間感謝我們的團隊，並感謝他們對我們公司和客戶的貢獻。我特別要感謝我們的總法律顧問 Sheila Cheston，她在公司工作了 13 年後即將退休。希拉在灌輸嚴格道德文化方面發揮了重要作用，她為公司提供了出色的建議，並且是董事會、我和領導團隊值得信賴的合作夥伴。

Kathy Simpson is our new General Counsel. She is also a valued member of our team. She's been with us for many years, and she brings a wealth of broad-based legal and strategic expertise to the role. So we're thrilled to have her.

凱西辛普森 (Kathy Simpson) 是我們的新任總法律顧問。她也是我們團隊的重要成員。她已在我們工作多年，為這一職位帶來了豐富的、廣泛的法律和策略專業知識。所以我們很高興能擁有她。

And I also want to congratulate Rob Fleming, our new Space System Sector President and thank Tom Wilson for his leadership in guiding the space business for the last several years during a period of just tremendous growth. Tom is now taking a new role with the company who's going to help us expand our business development capabilities across the entire enterprise. And Rob has extensive experience running complex businesses during his 18 years with our company. He most notably and recently led the Strategic Space Systems division, which is the largest segment of our space sector, and I think what you see from our team is that the depth and strength of our team allows us to make these internal transitions very smoothly. I'm looking forward to working them and them meeting you in future years.

我還要祝賀我們新任太空系統部門總裁羅布·弗萊明 (Rob Fleming)，並感謝湯姆·威爾遜 (Tom Wilson) 在過去幾年的巨大增長時期對太空業務的指導。湯姆現在在公司擔任新職務，他將幫助我們擴展整個企業的業務開發能力。 Rob 在我們公司工作了 18 年，在經營複雜業務方面擁有豐富的經驗。他最引人注目的是最近領導了戰略空間系統部門，該部門是我們太空部門最大的部分，我認為您從我們團隊中看到的是，我們團隊的深度和實力使我們能夠非常順利地進行這些內部過渡。我期待與他們合作，並期待他們在未來幾年與您見面。

So thank you for joining the call today, and we look forward to speaking with you again on our fourth quarter call in January.

感謝您今天參加電話會議，我們期待在 1 月的第四季度電話會議上再次與您交談。

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.

謝謝。女士們、先生們，今天的電話會議到此結束。感謝您的參與。