Huntington Ingalls Industries, Inc. (HII) Earnings Call Transcript & Summary

Good morning, and welcome to the HII Investor Day. Thank you to all of you who are participating in person as well as those of you participating on the webcast. I have a few housekeeping items before we get started, and I'm Christie Thomas, the Vice President of Investor Relations for HII. First, if there is an emergency, please follow the NYSE staff to one of the exits on the sixth floor. Second, please silence your cellphones and your computers for the duration of today's presentation. During the presentation today, statements will be made that are not historical facts and are considered forward-looking statements. They involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different. Also in our remarks today, we will refer to certain non-GAAP measures. For reconciliations of these metrics to the comparable GAAP measures, please see the appendix in the presentation. Today's agenda is on the screen. We're going to be kicked off with our President and CEO, Chris Kastner, who will talk about the HII corporate strategy. Then we'll hear from our 3 division presidents: Jennifer Boykin, President of Newport News Shipbuilding; Kari Wilkinson, President of Ingalls Shipbuilding; and Andy Green, President of Mission Technologies. They will discuss their operational strategies and overview their businesses. Then we'll take a 15-minute break. After the break, we'll hear from our Executive Vice President of Strategy and Development, Eric Chewning. He'll discuss our growth catalysts, AUKUS and nuclear. Then we'll hear from our Chief Technology Officer, Todd Borkey, who will discuss synergies in technology across the enterprise and alignment with national security priorities. Then we'll finish up with our CFO, Tom Stiehle, who will discuss our financial strategy and outlook. Chris will wrap up the presentation, we'll take a quick break and then we'll have Q&A. For Q&A, you'll find a barcode -- QR code near your seat, and you can scan this code and enter questions whenever you would like. So before we get started, we're going to have an HII video that highlights our products and capabilities. Roll the video. [Presentation]

It's my pleasure to introduce our President and CEO, Chris Kastner.

Okay. Welcome, everybody. Thanks for coming last night, if you were able to attend. Had some pretty good food, some conversations, some Q&A that I'm sure we're going to do later today as well. We're really excited to be here. We're looking forward to walking you through the business in a lot of detail. You're going to see the division presidents that you don't ordinarily see. And they'll walk through their business, as I said, in a lot of detail. And then Eric and Todd are going to dig into the business a little bit into our strategy and our technology. And then Tom will go through the financials. So I really think it will be informative. What I hope you take away from this meeting is that we have the right strategy, we're in the right markets and we're positioned to take advantage of those markets, and we have an amazing amount of visibility into the business moving forward. So with that, I want to go backwards a little bit, back to 2020. I want to spend some time on this chart because it gets you into the head of a shipbuilder and how we develop strategy and the kind of visibility we have. We made express commitments back in 2020 of driving growth, managing risk and generating strong returns. And this is all before COVID. It's all before COVID. So do we drive growth? Yes. And if you get into the actual words, the way we were thinking about it, and this is the chart from back in 2020, consistent, predictable long-term shipbuilding growth. We were confident that was going to happen, and it's happened and even more. The outlook is even better for shipbuilding now. A disciplined pursuit of high-growth market opportunities, we did that, Hydroid, Alion, very disciplined in how we evaluate those markets. Consistent with the national defense strategy as it was evolving. We executed on that and 6.6% revenue CAGR has resulted. Managing risk and this was about efficient execution of backlog insulating us from DoD budget dynamics, absolutely have done that. The backlog is up at $48 billion. These are all ships we know how to build. The only first to ship class here is a Columbia class, where 23% of that building the parts of those submarines that we really know how to build. And then generating strong returns. We made a $3 billion commitment over 5 years. Lot of you were in the audience when we made that commitment. There were some skeptics in the audience when we made that commitment. So even during COVID coming through COVID, making some pretty significant capital investments, we were able to -- we are on our way to make that commitment. We need to close strong in 2024, but I'm very confident we will. And then how have we evolved since the spin, really $6.6 billion to $11.5 billion. And you could kind of write the narrative on the kind of visibility that we have as an organization. If you were to write down 2024, what our objective is and what our strategy is because of our visibility in 5 years from now, we're going to walk down this and say we did just that. Capture the shipbuilding upside. We're absolutely laser-focused on execution in our shipyards. Kari and Jennifer are going to talk about that. We will continue to grow Mission Technologies. We're going to grow our nuclear presence because we have pretty amazing calls in that regard. AUKUS is interesting. Eric is going to talk about that. And then we'll leverage all the mutual reinforcing capabilities we have, including technology for growth. I can honestly say I've been part of HII since it started. I was a CFO down at Ingalls, went through increasing the margin rate down there with an amazing team. I ran strategy for Mike and then was Mike's CFO and COO and now the CEO. I feel better now than I ever have about this company and the outlook for the company. This is the team that's making it happen. It's a combination of some great shipbuilders that we will always have at HII, some external hires that are bringing a broader, more diverse perspective to the business and then some Alion talent that we elevated within organization. So this is doing a very good job leading the organization and driving this performance. So we start with mission and values at HII always. And our mission for the last 138 years has been to create the advantage for our customers. It's been something that we believe in. It's been essential. We played a part in every conflict that the United States has had over the last 138 years, and potential conflicts because presence matters when you talk about shipbuilding. And then who we are; we treat people with integrity and respect. We're all teammates at HII. We have a culture of winning, but we're going to win the right way. So at HII, we always start with mission and values. Every meeting starts with a safety moment at HII because safety is very important to us. We need to make sure we take care of our employees. We'll go through the numbers. A lot of you are familiar with a lot of these numbers, but some of them may be a surprise to you. 138-year history, I just talked about. 44,000 employees and growing. R&D, $1 billion of R&D that we execute. Most of that's in Mission Technologies and most of that is customer funded, but that's the legacy of Alion. They brought commercial tech. They bring commercial tech to the war fighter to bring the most cutting-edge solutions for them to execute their missions. Over 7,000 engineers, 4,000 suppliers. We're in 40 countries. And one of the stats I'm probably most proud about or one of the most proud about is we have 17% veterans within the organization, which makes it very easy to buy into the culture. $11.5 billion of sales and $48 billion of backlog. So a little bit more detail. The analysts in the room, the shareholders in the room, I know there was concern about the milestones we missed at the end of last year. Not to do a program review in an Investor Day, but 798 is in the water, floated off. 796, we're going to show a great video on the trials. Had a successful trial. That will deliver around the end of the quarter. And then LPD-29 had a very good trial as well. So that will deliver by the end of the quarter. So that's very positive. But Newport News, it's a $6 billion business now, significant, significant. Jennifer is going to talk about their outlook for the business and all their execution operating system, how they're managing that business now, maturing that operating system. Ingalls, $2.8 billion last year. The '25 budget just came out. Really solidifies Ingalls moving forward. When you think about the amphibs and how the amphibs both the LTDs and the LHAs are an integral part of their future. Done a very good job winning 7 of 10 DDG-51s. So Kari will talk about Ingalls, their future and how they're thinking about the business. And then Andy Green will come talk about Mission Technologies. Had a stellar 2023 by all accounts in Mission Technologies. He's going to build on that and he has the opportunity to build on that because of their -- both the markets they're in and the wins they had last year. So strategy. This strategy has been put together very close to the core, very close to what we do and very close to what we have very good visibility into. It's been consistent. It is consistent with the national defense strategy. If you look at the national defense strategy and align it with our strategy, it's very consistent. And first and foremost, the greatest thing we can do to generate value for shareholders is executing shipbuilding, executing shipbuilding, capture the growth and improve the margin rates, greatest source of value that we can do. We'll continue to grow Mission Technologies. We're in the exact right markets. We'll go through those markets, but LVC, unmanned C5ISR, electronic warfare, nuclear fleet support, we're in the exact right markets to grow. You're going to hear a lot about AUKUS later. Eric is going to step into through AUKUS. Probably the most -- probably the best review we've received on AUKUS from an industry player relative to how it's happening, when it's going to happen, the pace and how we're participating in it. And then nuclear, we have a pretty special nuclear expertise that comes out of executing very well in Newport News and nuclear operations for the last 60 years. That's an important market, and we need to pay attention to it. So a bit more detail on those markets and why we feel so good about the market trends that will drive our growth. Military shipbuilding, we used to think $12 billion to $15 billion. We were worried about sequestration when we spun. It's $32 billion now. And when you look at the '25 budget, there's room to grow and we don't see a backup. And we don't see a backup in that budget for a number of reasons. One being just the threat environment that we're facing and the priorities in the Pacific. So that we call the military shipbuilding super cycle, we think will continue, and we will participate in that. Defense Tech integration, it's what Alion has done. It's what the Mission Technologies organization is doing. They take commercial tech, they integrate it to provide the best solutions for the war fighter. That will continue. AUKUS is a $250 billion opportunity in Pillar 1. We are uniquely qualified for it, both in shipbuilding and nuclear. We've taken, we think, the appropriate steps to prepare ourselves for that market, and we're going to go into a lot more detail in that later. And also Pillar 2. Pillar 2 aligns almost precisely with Mission Technologies core capabilities. So that's the opportunity. And then nuclear or the nukes, it's 8% growth on the NNSA budget. We already participate there on DOE sites. SMRs will happen. We're not going to design nuclear plants, but with our calls in fabrication and nuclear operations, we will participate in that, and we have the right partners for that. And then nuclear D&D of ships both in the U.K. and in the United States is an opportunity for us because we do that work. And I'd like to dig down a little bit more detail, right, on just real tangible work that we have in front of us. We have 43 ships in process, 43 ships in process, between Newport News and Ingalls. $8 billion of awards in the last 18 months within Mission Technologies. We paid down our debt to target metrics, which provides a lot of flexibility. And as I said previously, we're positioned for market tailwinds. Now just that in and of itself provides a pretty strong outlook. Then you look at what's going to happen in the next couple of years, we're going to negotiate 22 ships in the next 36 months across both shipyards. We have a $75 billion pipeline in MT, that's only growing, and it's in the right markets. AUKUS and shipbuilding has -- there's upside potential, along with nuclear. We're going to continue to integrate commercial tech into our products, and we're going to point it not only at our customers, but we're going to point it at the shipyards, too, for efficiency. And then we've got a very strong free cash flow growth and balance sheet strength in the future. So it's a pretty significant tangible outlook going forward for our business. I want to spend some time on how we're making some investments for our customers. It's very important to us. We spent $4 billion -- starting in 2017 through 2026 we will spend $4 billion. A lot of you have been in our shipyards. We appreciate that. We love you to come to our shipyards and show it off. I know everybody enjoys it. Those shipyards have changed over the last 10 years. If you were at Ingalls and Newport News, 8, even 5 years ago, they're totally different. The entire north yard there or the Columbia class part of Newport News, all those brand-new buildings, all those jigs and fixtures, Jennifer is going to talk about that. It's really changed Newport, the outlook at Newport News. And at Ingalls, the automation and getting everything under cover, if you've been in. Hopefully, we did invite you down to Mississippi in August, but you need to get under cover Ingalls and that's what they've done. So we transformed those shipyards expressly for capacity and throughput. And we're going through a bit of another investment cycle. Now we're very disciplined in how we do that. We've got a number of questions from analysts over the last few years, how are you going to prepare for 2 plus 1 additionally or additional capital. We've always said we can't do that without participation from the customer. Now fortunately, with SIB Money and the Navy understanding the risk and the supply chain and the need for new throughput, we have a really good partner with the Navy to ensure that it makes sense financially for us to make that capital investment. So we've stepped into that. But there could be no doubt that we're a strong partner with our customer and we're making the appropriate investments to make sure that they're successful. And to boil this down into numbers is very simple, and then Tom is going to talk about this, and Eric will talk about this in his strategy chart as well. Shipbuilding, about 4%, which is higher than we had previously been. Mission Technologies is about 5%. This will be lumpy from time to time, adhere to a 4-plus kind of medium-term growth rate with upside and growth catalysts in the medium to long term AUKUS and nuclear, which gets us potentially to a mid-single digit growth rate for the business, which is pretty good and really different than we've ever been in at HII. From a margin standpoint, I firmly believe and I'm confident that we're going to be back at 9% to 10% return on sales in shipbuilding. I know this because we've done it before, and we're following the same playbook. Paramount to this is fighting like crazy right now, where you're working through the ships that you're about to deliver and then making sure you negotiate the new ships consistent with the current macroeconomic environment to ensure that you got the supply chain squared away, inflation squared away and that the cost for these ships is consistent with how you're executing. So we're going to run that playbook and we expect it to be successful and we'll be back at 9% to 10%. Mission Technologies, 9% to 10% EBITDA. We'll get there. It's going to take some time because we have to modify the portfolio a bit and transition into a bit more fixed-price work, but have high confidence will do that as well. Tom is going to talk a lot about this on the shipyard presidents, and Andy you are going to talk about this as well. And then derisking, it's been an express strategy for us as a corporation to derisk the company. We do that by a number of different ways, ensuring we have fair contractual relationships, capturing backlog, making sure we take advantage of and partner with the Navy in the SIB funding. Our operating system maturity has come so far from when we spun the company to where we are now in both shipyards relative to the operating system, that we have absolute visibility on where we are in every ship every day. Weekly, monthly, quarterly, we have a lot of visibility to ensure that we can manage risk and risk and opportunities throughout the portfolio. Expanding our international presence through AUKUS and the U.K. just provides revenue diversity for us and portfolio diversity, which is important. And then we're going to maintain a strong balance sheet, always. We've done that, and we'll continue that going forward. From a capital allocation standpoint, there's really no changes here. We've been very consistent as a company since we spun actually, where we wanted to be investment-grade; we achieved that. We -- and we're back to investment-grade metrics. We're going to maintain and grow capacity in our shipyards. We need to continue to do that. We need to support our customer and their mission. We'll continue the annual dividend and provide excess cash and share buyback back to shareholders, important part of our strategy. And then we'll continue evaluating M&A at our core. When you think about shipbuilding, nuclear and defense tech, we will evaluate M&A, if it makes sense, to create value for shareholders. So the investment thesis for HII, I think it's a unique company right now. It's $11 billion platform prime with room to grow; with room to grow in markets that are growing. So I think that's very compelling. There's a margin upside here as well, where we have the opportunity to lift margins within each of our divisions and a path and the strategy to get there. And then we're going to generate a bunch of free cash flow that will provide a lot of optionality relative to capital allocation so we can increase shareholder value. So with that, I will turn it over to Jennifer Boykin, my teammate, who runs Newport News Shipbuilding.

Good morning. I am Jennifer Boykin, as you heard, the President of Newport News Shipbuilding, and it's my pleasure to be here to talk to you today about our incredible business. I've been with the company for 37 years, a year after graduating from the U.S. Merchant Marine Academy and in that time I've had the opportunity to work in a number of divisions and to lead a few of the divisions. When I took this job in 2017, I talked with the entire workforce, and I told them that my priorities were going to be people and technology. So 2024 is a little different than 2017. But I can tell you, there's nothing more important to focus on to get where we need to go than people and technology. So before I jump into the slides, I thought I would start with a video that shows you the intersection of our incredible workforce and some of our very cool technology. Roll the video. [Presentation]

You have to love this business. It's what we call the romance of shipbuilding. So Newport News shipbuilding is poised for growth, and we are laser-focused on execution. We're a 138-year-old business with a $27 billion backlog through 4 primary lines of business. We are the sole designer and builder of all aircraft carriers for the U.S. Navy. We are 1 of 2 businesses that can design and build nuclear-powered submarines. We are the only company and facility that can perform the RCOH or 25-year mid-life refueling of all the Navy's aircraft carriers. And we perform fleet support services both on-site and off-site and have engineering service that support our customer. And over the last 5 years, we've seen a growth rate of over 5% as a result of the demand for our products and services. So this is always going to be a people-centric business, and investing in our workforce is always going to be core to our success. As the largest industrial employer in the state of Virginia with over 26,000 employees, it's not surprising that we have many third, fourth and even fifth-generation shipbuilders. Nor is it surprising that we have over 1,000 shipbuilders that we consider master shipbuilders. They've been with the company for 40 or more consecutive years. And core to our people strategy is our 105-year-old apprentice school. This very competitive program is really designed to graduate the next generation of production leaders. In fact, we'll graduate the next class this Saturday, about 220 more future leaders. And today, 40% of my production leadership team are apprentice school graduates and that includes 3 executives on my staff. So this focus on workforce is always going to be core to Newport News. So this is what our shipbuilders build. Newport News plays a key role in every aspect of the life cycle of every one of the Navy's aircraft carriers. Gerald R. Ford is the newest class. And while the USS Gerald R. Ford is in the fleet today, setting new standards, we're building the next 3 classes -- next 3 ships of the class. The John F. Kennedy is at our outfitting and testing pier today, finishing the last 10% of construction. The next -- the third ship, the next Enterprise is in our 2,200-foot long dry dock. And at the end of this year, the Enterprise will be 40% complete. And then the fourth ship of the class, the Doris Miller is in early stages of fabrication. And so while the Ford class is going into the fleet, the Nimitz class will continue to come in for the 25-year RCOH or mid-life refueling. And this RCOH is actually more than just a refueling. It's a modernization of those Nimitz class carriers. In fact, about 1/3 of the total life cycle maintenance dollars are spent during the RCOH. The John C. Stennis is in the shipyard today undergoing RCOH. And the Harry S. Truman, the next ship in the class, is in the planning period that precedes that. And the Truman will come in as the Stennis completes and goes out. And then the final 3 ships of the Nimitz class will follow that in a heel-to-toe manner. And then when you consider the Nimitz class completes, and the Ford class begins the 25-year RCOH program, that line of business runs out mid-century. And then the third step, the final step of the 50-year life of aircraft carriers is the defueling and inactivation. And this will start with the Nimitz class, again in a heel-to-toe manner and when the Nimitz class is completely inactivated, the Ford class starts the same process. This is work that can only be done at Newport News. We're the only shipyard that has the nuclear facilities. We're the only shipyard that has a nuclear qualified workforce and the nuclear qualified leadership team. And when a ship is completely inactivated and defueled, there's a step, that's disposal. And because of the qualifications and the capability that we have, you'll hear Eric talk about the disposal of the carriers as a growth market for MT. Newport News also has a role in the construction of every Virginia class submarine in every Columbia class submarine. So for the Virginia class, we're in a teaming agreement with General Dynamics Electric Boat and each yard builds the same roughly 50% of all of the submarines, really creating kind of centers of excellence at each yard. And then we alternate the role of the delivery yard, which is when we final assemble, test and deliver the completed submarine. In our 50%, we build all the bows and sterns of every Virginia class submarine. And we build them in the most advanced manufacturing fixtures of their kind. Chris referred to this. These segment assembly machines or SAMs, as we call them, they've been a key part of our capital investment because, again, we're the center of excellence for the construction of Virginia. And right now, today, we're completing the last 2 ships of Block IV. We're building the 10 ships of Block V. The 10 ships of Block VI will be negotiated later this year and the 10 ships of Block VII are in the Navy shipbuilding plan. On the Columbia class, we're actually a major subcontractor to Electric Boat. And as you heard Chris say, we build 23% of every Columbia class. And in that 23%, again, because of the investment in the facilities for the centers of excellence, we again build all the bows and all the sterns, and then we'll ship all those modules to Electric Boat who will deliver all of the Columbia class. And today, we're building the first 2 Columbia class submarines in the yard. And then the next 5 will be negotiated as a block later this year, along with the Block VI of Virginia class. Altogether, across these 2 classes of submarines, we deliver the Navy the most advanced nuclear-powered submarines in the world. And really, whether we're talking about the combatant commanders' desire for more submarines in the fleet today, or the support of AUKUS and a free and open Indo-Pacific region or the demand for more aircraft carriers, which the Navy considers the most survivable air field in the world, our shipbuilding programs are 100% aligned with the Navy's shipbuilding priorities in the national defense strategy. In fact, the demand for submarines today is greater than it's been since the Cold War, and that demand is driving submarine production enterprise at a rate unseen since that time, and that growth demand presents tremendous opportunities for HII. And as a result of that, we've been investing in the core parts of the business to prepare for this growth. So when I think about what are the elements of the business that we have to invest in and pay attention to, to make sure we're prepared for the growth, it's really these 4. It's people, supply chain, technology and our infrastructure. And from a people standpoint, it's really about making sure that we have the workforce ready for the growth that's coming. We're doing that through partnerships with the local community, the state and with the Navy and investments through the submarine industrial base. The supply chain focus and investments are really around helping the suppliers today improve their performance post COVID, expanding the capacity of the supply base, and we are very close to disrupting some parts of our supply base with additive manufacturing. It's starting to happen. From a technology standpoint, really, the investments are intended to enable our workforce today to become more proficient. So whether we're talking about an augmented reality app to improve worker safety or smart welding machines or machine learning for our buyers, again, all of our investments are targeted at making each worker more efficient as this new workforce is coming in. And then finally, preparing for growth from an infrastructure standpoint means investing in the things that are core and unique to Newport News. Our submarine centers of excellence, our very unique nuclear capable assets and then everything that it takes to build the aircraft carriers from the dry dock to the assembly halls. So I'm going to talk a little bit about where we are on each of these. So workforce has always been a core strength at Newport News shipbuilding. And we're continuing to invest in training and development of the workforce that's coming in and the workforce that we have. But in addition to that, we're really paying attention to this pretty fast changing focus area for us. From a hiring standpoint, we're investing in data analytics to find the workforce where the workforce is. And we're changing our hiring practices in the ways necessary to meet the professional -- the incoming professional workforce and to meet the incoming craft workforce. From a development and growth standpoint, again, traditional investments in training and development, but we're also scaling up our world-class apprentice school to make sure that we have the leaders -- a growing number of leaders to meet the growing workforce demand. And then finally, from a retention standpoint because we can hire people, we can develop them. But if we can't keep our workforce, we're in a constant turnover cycle. And this is another place that we're using analytics in a way that we never have before. Through data that comes from employee surveys and other available data, we are actually finding what drives a person to make a decision to stay with this company and continue to be a shipbuilder or to take another opportunity. And by leveraging the data and taking the appropriate actions, we saw a significant increase in the retention of our professional workforce last year in 2023, almost back to pre-COVID numbers. And we're starting to see those same positive trends for our craft workforce, combined with sort of where we're hiring them and how we're changing the training. So this is going to continue to be a challenge. This is a persisting challenge, and we're going to continue to make sure that we invest in our workforce because the stabilization of this workforce will continue to be key to our success. And our work teams cannot build the ship on time if they don't have the material on time. And you can imagine that our supply chain management team stays pretty busy with 80,000 purchase orders open on almost every given day, across 2,500 suppliers, mostly in the U.S. with a handful abroad, managing over $4 billion of orders, which really means that our suppliers, many of our suppliers, are providing material that is critical to a planned sequence build, which means their on-time delivery is critical to our on-time performance. And these are suppliers that have also -- are also continuing to deal with some of these same COVID challenges. The suppliers have challenges with workforce. The suppliers have challenges with inflation, and we're seeing as a result of that longer lead times from our suppliers. And so our investment is really in boots on the ground. We deploy engineers or quality assurance personnel, buyers, project managers, whatever it takes to help the suppliers really improve their performance, improve their processes or improve their hiring practices. Again, depending on each supplier, what is their need, we are providing boots on the ground to help them and that's something that we will continue to invest in. And then in parallel to what we're doing with the supply chain today and in partnership with the Navy, we're investing submarine industrial base funding to grow capacity. We'll outsource large volumes of work units or modules to strategic suppliers who can efficiently bring in workforce, add footprint can perform this work and deliver on time with first-time quality. Again, people and supply chain are going to continue to be critical to us, and we're going to continue to invest strategically and be innovative to make sure that we can manage this challenge as we go forward. And then technology and infrastructure, again, is really about helping each employee be more efficient and helping the teams build continuously. The second picture here, the Ford class, was designed digitally. And we're continuing to invest in the full digital thread, developing digital twins today that allow the engineers to solve problems in the lab before we install solutions on this ship. And the other benefit of the full digital thread is digital shipbuilding. So we made a decision when we had the 2 ship buy for CVN-80 and 81 in partnership with the Navy to make CVN-80 the first digitally built aircraft carrier. The work teams today are building CVN-80 with tablets with the product model and the information that they need and only the information that they need. They're not using the big 2-dimensional planned view drawings that my contemporaries and I grew up on. And it's really meeting that workforce where they are. And then the top photo shows the segment assembly machines or the SAMs inside the [ JMAT ] that Chris talked about. And when we complete the complex, when we complete the investment in this [ JMAT ] complex, in 2026, we will have invested over $700 million to add over 560,000 square feet of covered manufacturing space with 4 SAM fixtures. And so why make those investments? What difference does that make? I want to give you an example of the benefits we're seeing from the investments on the Columbia class. So when we were designing the SAM fixtures and designing the layout of the building, we were also developing new processes because these SAM fixtures, they augment the human worker. They create a safer environment. They're designed for 24/7 operation with actually fewer people than the traditional build process. So we learned a lot as we were starting to commission and build in those machines. We learned a lot about the building, and we learned a lot about the process, these new processes we were using. And we also have a very innovative workforce that brought a lot of new ideas to how to leverage these investments. And the results were when we took the stern out of the fixture of the second Columbia submarine, that stern was 22% more complete than the stern of the first Columbia when it came out of fixture. And so this is a picture of the stern of the Columbia on transit on its way to EB, coming up our beefed-up roadways and for context, when that stern comes out of the fixture, it weighs about 450 tons. So really incredible improvement from Boat 1 to Boat 2. So the investments in the facilities are helping improve our performance. But as you heard Chris mention, we're also investing in strengthening our complete operating system and this is how I think about the Newport News path to growth of margin expansion. First of all, you heard Chris mention this, too. We're going to naturally evolve from the contract portfolio mix we have today, the majority of which was contracted for pre-COVID, meaning it does not fully reflect the workforce challenges and the supply-based challenges that I mentioned. Secondly, as we contract for the upcoming work, we'll ensure equities for those realities and those realities, again, include the supply-based challenges with workforce, inflation and longer lead times. And then third, internally, we have invested to strengthen this operating system. And we've invested in our own business systems to make sure that our teams are ready for this growth and set up for success. So I want to just talk for a minute about what that really means, what does that really look like? So our execution operating system really has 3 elements. And the first element is our phase commitment, our phase review here. Essentially, what that means is we take the multiyear long shipbuilding contract, and we break it down into 12-week or quarterly phases. The phases enable each work team to understand what they're supposed to accomplish daily, weekly, monthly. So they have performance goals to that, but it also enables the buyers to make sure that we have the right material on time for that phase. So the first element is our phase management system, breaking the multiyear contracts down into quarterly phases. For that to be successful, the material and the technical instruction have to arrive on time. We have invested over the last couple of years in our business systems and now have new real-time data dashboards. And the dashboards enable impact analysis quicker and decision-making faster. This is an area -- this has actually been critical to strengthening our overall operating system. And this is the part of the business that I am most excited about working with Todd in the CTO's office on the AI-powered ship building, which you'll hear Todd talk about and then the final element of the execution operating system is really about leadership because the workforce and the incoming demographics of the workforce are different than when many leaders who, again, are my contemporary started this business. And it's really around making sure every leader at every level, including myself, really understand what it means to lead today's workforce, ensuring that each employee understands not just their role, but the criticality of their role to the success of the business and making sure every team has the visibility to how they're doing on those weekly, daily, monthly performance goals. So they can see how they're doing, and they can take the appropriate action and then finally, it's about making sure that we have a culture where every employee, whether you've been there a week or you've been there 30 years can stop the process if they have a question or if they're not sure what they're supposed to do next. This is helping drive first-time quality and safety of this workforce or if they have an idea of a better way to do it. So we have a formal training program that's going through the entire leadership team to make sure that we're aligned on how you lead today. This operating system and the investments we've made in this operating system, along with the investments we've made in people, supply chain, technology and infrastructure are really setting this team up for success. It's a very exciting time to come into shipbuilding. So there's 4 things I really want to leave you with. First, our backlog is solid and it's growing, and it's growing in a way that's aligned with national priorities. Secondly, we understand what the workforce and the supply base challenges are. We're making the appropriate investments and we're seeing improvement in those areas, although they will persist, we're staying ahead of that. Third, we're leveraging all of the investments We've made capital investments as well as business systems -- system investment to make sure that we can capture the growth and expand the margins as we move forward. And finally, Newport News is laser-focused on execution every day. So I appreciate the opportunity on behalf of 26,000 shipbuilders in Newport News, Virginia to share our story with you today, and I look forward to talking with you all more later. With that, I am very pleased to introduce my teammate, Kari Wilkinson.

All right. Well, good morning. I am Kari Wilkinson as the big head on the screen behind me would suggest. It's good to be with you this morning. Thank you so much for your interest and participation. So before I also queue a video that's going to make every one of you want to be a shipbuilder, I'll share just a little bit about my background. So I've been with HII Ingalls Shipbuilding for 28 years now. My plan was to go to the shipyard for just a couple of years. I went straight out of college, University of Michigan, Go Blue, and went down there. I was going to stay for a couple of years and then come back to the Virginia DC area and design ships because by 2 years in, I figured I'd know how ships were built. Complexity, as you well know, would suggest otherwise. And so I got to the shipyard, and I was absolutely mesmerized by the processes, the complexity, what happens in South Mississippi that almost no one knows about in the country, let alone south of Highway 90, right? And so just incredible things happening there, incredible people doing the work. So with that, I'm going to queue the video and give you a little bit of perspective. For those that have not been with us, please come down any time. I do suggest you come in August. We will give you bottled water. We will give you ice cream. You will be able to close your exercise wheel in one tour on an amphib, so you're welcome to come down any time. With that, please queue the video. [Presentation]

Who wants to say the Pledge of Allegiance with me? No, thank you for that. So obviously, really passionate about what we do. Really excited to be with you here today. Lesson learned, we hot wash everything in the shipyard. We do phase management, as Jennifer described. And the lesson learned for me is next time I need to put a QR code. If anyone wants to apply to be a ship setter, pipe welder, everyone is a recruiter, so we'd be happy to have you. But I'll jump into the presentation. So at a glance, obviously, Ingalls from a revenue perspective, $2.8 billion part of the enterprise. Proud to have that position. And you can see the makeup of that, about half of our workforce is amphibs, half of our workforce is destroyers. So when you look at it from a revenue perspective, amphibs make up better than half of our revenue. The destroyers, obviously, has been our bread and butter for a very, very long time. And so we're proud to be fully into the DDG Flight III construction, and we'll talk a little bit about that when I go over the programs. National security cutters, as everyone likely knows, we are sunsetting that program. We're proud to build the last ship of that class, NSC 11. It's in early construction, moving to the shops now and out into the unit areas, and we'll be proud to deliver that. We've been a good partner to the Coast Guard for many years now in that program. And then lastly, I would talk about planning yard services. So planning yard services, if any do not know what that part of our organization does, they support the fleet around the globe. So they do the engineering, the material kitting for modernization and overhaul availabilities around the nation. We have folks in the home ports here in the countries, in Japan and other places in order to make sure that we're delivering those products the way that we need to support what activities are happening offsite. So obviously, headquarter in Pascagoula, Mississippi, 85 years as you saw in the video. We're really proud to have $16 billion in backlog. A whole lot of that we've gotten just in the last year. We have demonstrated an ability, and this is going to be important to my case study, to talk about delivering the most technologically advanced and relevant capabilities to our customers, right? So from an agility standpoint, we've spent a lot of effort in making sure that we can adapt to the threat environment. It's important to our customers. It's very important to us, and I'll talk little bit about that. Supply base, right? We're part of an extended team. We consider our suppliers, our supplier partners. They're an extended network of shipbuilders around the country, working with over 1,300 of those. Touching 8 classes of ships on any given day, 5 of which are in the shipyards, and I'll talk about those in more detail. And of course, 11,000 shipbuilders in Pascagoula. So with that, it starts and ends with our people right? I would be remiss if I didn't spend most of my time this morning talking about our shipbuilders. Representing over 11,000 people just in Pascagoula and as I mentioned, some of those around the globe, we are the largest industrial employer in the state of Mississippi. We take that responsibility very seriously, and it affords us great partnerships at the state level as well as with our Navy customer. So from a master shipbuilder perspective, veteran hiring, all of those things will continue to be a focus for us as they are in Newport News. A significant amount of our leadership team has been doing this for a very, very long time and had a lot to teach our incoming shipbuilders. We're very involved in early STEM programs. But likewise, we at our core have an apprenticeship program. We're very proud of that. We have increased the enrollment in that school over the last couple of years and are now over 700 enrolled. And I had the privilege of helping graduate 99 of those folks this past Saturday. That was a terrific event. So really proud. They absolutely are part of our leadership team in the future, and we very much want to continue to invest in that part of our workforce. So having said that, we'll talk a little bit about our programs. So obviously, I mentioned NSC in sunsetting. I'll go into more detail now on the capabilities that really take us into the future. Give us the perspective, that long line of sight with respect to our backlog and also growth opportunity. So I'll start with the Flight III destroyer. So with the delivery of Jack H. Lucas not too long ago, that was the first SPY-6 capability, that flight 3 step function in capability to our Navy customer, and we're really proud of that position. So that team, like I said, I'm going to talk a little bit more about some of the new muscles, if you will, that we've generated on that program that apply to the entire portfolio. But to turn this for just a second into a program review. DDG-128 is in the water and doing good things, tracking to get to see this year. We've got 129 still up on the Hill, which is up on land, has not yet been launched. It will launch later this year. We've got 131, 133, and we've already started fab on 135. So we've got a lot of ships in production. Really proud of the team and how they are taking what we learned on flight III and applying that to 128 and follow and into the next multiyear, which we were able to secure this past year. Next, I'll move on to the DDG-1000, the Zumwalt program. So we are proud to have 2 of those ships in the shipyard, DDG-1002, Lyndon B. Johnson was the first to arrive in Pascagoula for her combat system activation. So we're doing the equivalent of new construction work, but we're finishing that ship from a combat system standpoint. DDG-1000, Zumwalt is actually up on the hill also. We were able to put her on land at the end of last year. And now we're in the heavy structural rip-out associated with installing the conventional prompt strike capability on that platform. All of that is tracking to plan. And so we're glad to be doing that work as well. The plan there will be that ship will be on land until that portion of the work is complete. The ship will go back in the water and then 1002 will come up on land and then 1001. And so we have a plan laid out for the foreseeable future in support of getting that important capability to the Navy. And then lastly, on the page, the amphibs. As I mentioned, over half of our revenue, about half of our workforce, so LHA 8 is in the water. It launched not that long ago and is steadily moving through compartment completion and test completion and then LHA 9, of course, earlier in fabrication, and we are actually already procuring material for LHA 10. So we're in a good place there. Now we were extremely pleased to see the President's budget and the strong support for amphibs. Obviously, that is absolutely critical to our expectations going forward. And so that is a step in the right direction. We were honored to host senior leadership from the Marine Corps just a couple of days ago, and they also, as you would imagine, are in a very good place with respect to that. But LPD-29, as Chris mentioned, certainly coming through. All of the work is done, the sea trials are done, and we're in the process of submitting paperwork to deliver the ship. So we're feeling good about that program and how it's closing out. LPD 30 we will launch this year. LPD 31 is coming up fast just to the north of LPD 30 on land as we sit here today. Of course, LPD 32, very early, but we're looking forward to securing the contracts for 33 and follow to the extent that the Navy wants to pursue that, and we feel really good about that. So what is our strategy? Very consistent across the enterprise, right, accelerating growth, expanding margins and reducing risk. So for us at Ingalls, we want to be the engine that the enterprise can count on to execute as we commit to execute. And so that is absolutely what we're focused, right? Relentless execution of our backlog, and we're in a very good place with respect to our backlog as we've discussed. Workforce Development, it is always going to start and end with our people. It is the most, I'll say, important part of our strategy. It is where we are spending the most part of our time is making sure that we have the folks that we need. We have done a tremendous amount of hiring. We have overhauled our onboarding programs and how we are teaching and developing new shipbuilders. And I'll talk a little bit more about that as we go into the presentation. Expansion through partnerships. So our suppliers have always been our partners, but along the Gulf Coast and other places, there are all sorts of partnership opportunities with what historically have been competitors, now can be collaborators and partners. And so we're in the process of looking to those avenues to expand and grow the business. And then lastly, new technology evolution. So really exciting things talking -- looking at Mission Technologies and the things that Todd's organization is bringing across the business, and both Eric and Todd will talk about those in a much more compelling fashion but very exciting for shipbuilders as we go forward. So we find ourselves in a very, very good position with respect to the priorities of our customer. That has not always been the case. But I will say it's been an honor to be -- have the top 2 CNO stated priorities behind submarines and carriers in the conventional prompt strike and the delivery of Flight 3 capability to the fleet. Our shipbuilders are acutely aware of those 2 priorities being in the Pascagoula yard simultaneously. And so committed to mission and purpose. You saw that in the video. A lot of patriotism in the shipyard and very aware of the priorities of our customers. So those are absolutely in line with where we are focused as an organization. And then lastly, on amphib operational availability, making sure that those ships are complete when they deliver, operating according to expectation. We've had the ability in the past to pull some of the post sail-away activity into the -- I'll say, the pre sail-away activity in industrial post delivery availabilities, and we're going to continue to look for those opportunities and that would grow the business as well. So very good alignment from a national defense priority standpoint, feeling very strongly positioned to take advantage of those tailwinds. So in the past, I would have told you that in any given day, any given year, we have between 10 and 12 ships in construction in Pascagoula. Today, we find ourselves with 14, and we see opportunities for that to increase over time. And so you can see the time line at the bottom. That is just what we have line of sight of today and the programs that we enjoy work on as we sit here. The right-hand side of the page, I would highlight. So on the top right-hand corner of the page, 1969, that's a picture of the East Bank. And we had ship after ship after ship -- I'll say that carefully, ship after ship, we had them lined up on the East Bank. And so there was a tremendous amount of opportunity. I will say, back in the '70s and '80s, we had as many as 7,000 to 8,000 people working on the East Bank. We have about 300 today. So there is a huge opportunity, not just from a real estate perspective, you can see the picture at the bottom, which is present day. We have done some investments in the East Bank. We have installed unit manufacturing capabilities, but you can see there is a lot more opportunity to go. So how are we going to do that? What's our actual plan? What are we going to do to capture the -- and execute on the backlog we have today? So first, we have to execute on our commitments, right? And so performing on our current contracts is tantamount to that. Offering affordability. We think bundling makes a whole lot of sense, and you've probably heard us say that before, especially as it relates to amphibs because it gives us that predictability, gives us solid backlog, not just for ourselves, but for the hundreds, literally thousands of suppliers that we touch from a consumables and commodities perspective as well as our major procurements. So that's really important to us and making sure we do that. Driving additional efficiencies, there is always opportunity to perform. We were having a conversation before. Where are there opportunities? Everywhere, right? Everywhere, if you're looking at the business the right way, we want to continue to push ourselves to be affordable, to be profitable, to do the things that we need to do, not just as good corporate citizens but as taxpayers, right? Because we understand the business that we're in. And so we've got the partnerships that I mentioned. Applying technology; I'll talk a little bit more about that in a page or 2. And then lastly, capturing new contracts, making sure that we certainly have the programs of record, and we see good growth opportunity just within those spaces, but we are also being a good partner to our customers with respect to other programs that may be of interest to us should something change. We're not putting all our eggs in one basket, ready to execute and we're building up to execute the growth we have in backlog today, especially as it relates to DDG Flight III and the increased cadence on those ships coming with the FY '23 multiyear procurement. So investing, right? So we've done a lot of investment, and I'll talk about that in just a minute. More pictures than words on the next page, I promise. But on this one, we're going to continue to invest in people, right? It is about absolutely taking care of our people. It's always been about taking care of our people, but they have different expectations today than they used to. They have different opportunities. The pay gap between manufacturing and nonmanufacturing careers is not as great as it used to be. And so we have to be the place they want to be, right? For whatever reason, whatever that means to our folks and meet them where they are. So I mentioned hiring, right? We've hired thousands of people, our focus. We figured the hiring thing out. We're going to continue to hire. Onboarding, getting that as efficiently and effectively getting people through the process to onboard, but it's about retention, and it's about offering development opportunities. So whether it's tuition reimbursement for long-term strategies, career counselors that we brought on the team over the last year in order to focus on our represented production workforce to let them know how valuable they are and how we see opportunities for them beyond what they do today, although we love what they do today and we would like them to do it in perpetuity, that's probably not realistic in today's environment. And so we're giving folks opportunities. I'm going to call out, in particular, the operations resource centers that we stood up in the yard. That is something different and gets to the heart of performance. So as we -- easy round numbers as we hire and onboard 1,000 new shipbuilders, that means we create about 100 new foreman. And these 100 new foreman in days of old would have had 10 years' experience on their tools. They would know how to operate in the environment. They would understand expectations. They would know how to work through obstacles or roadblocks that come with the complexity of what we do, right? And so those days are behind us largely. So we have folks that yesterday worked with the crew. Today, they're being asked to drive and hold accountable the crew. And that is a very different skill set as we all know. And so operations resource centers, we've piloted that. They're in place now in the shipyard in 4 locations. They're painted a ridiculous graffiti pattern that makes them stand out as the things they are meant to be. They are meant to be whatever they need to be to support the foreman and working through obstacles. And so we're already getting some great feedback. We've seen some pockets of improvement where we focused those efforts, pipe on a particular ship where we know we've got inexperienced folks, et cetera, et cetera. So we're going to continue to be really agile with that whether it's they come in and have a bottle of water and vent about wanting to choke the life out of somebody because they need to get this done and they don't understand or if it's to help redrawings blueprints, things like that, we're going to absolutely make those things available. In addition, the new technologies comes in here. We've got the tablets and devices where they can see the 3D models of the machinery space they're trying to build. So some really exciting things that Mission Technologies and our pioneers in Newport News, for the digital approach to shipbuilding. We're getting a lot of good feedback on that. And then lastly, the infrastructure right now focused on support to people and quality of life. Like I said, I'm going to walk through brick-and-mortar in just a second and give you a feel for how we're headed. We are modernized, right? We spent over $1 billion over the last 5 to 6 years really targeting brick-and-mortar to modernize the shipyard fully. We've got a panel line that we used to talk about panels every single day, every single week because it pastes everything else in the shipyard, now nothing can touch the panel line capabilities that we have with our new hybrid laser panel line. So some great things have happened, but we've got more opportunity on the horizon. So with that -- I'm not going to go through all of these. You'll see unit manufacturing, unit construction in a lot of these pictures. We knew that we had to increase our capacity based on the demand we saw coming from our customers. The fact that we hire thousands of folks, the advantages, we're a large volume organization, we can move some material and some ship through the facility; the bad news is we're a large volume facility, we need the volume to move through the facility. And we're in a great position today and as I mentioned, fully utilized or fully modernized. Our conversation now is about people. So back to the investing in people, quality of life, capturing the middle of the shipyard as part of the huge 300,000 square foot unit manufacturing and outfitting haul that we put in the middle of the shipyard. We also attached to it a cafeteria for the workforce and Wi-Fi, Chick-fil-A all the things that we knew that our folks would appreciate. Everybody loves the Chick-fil-A, that's a good thing. We're getting tacos next. So food trucks, whatever it is, right? We want to make sure that our folks know we care about them. They're important. They're not just important to us as human beings and as family members because we see them a whole lot more sometimes than we see our families, they are important to the nation. So opportunity in the future. So while we have done investment on the East Bank, we see greater opportunities. So we recapitalized one of the outfitting piers, the southernmost pier, where we've already turned on the engineering to go ahead and capitalize the pier adjacent to it to the north. We can put everything except for the LHAs on the East Bank. We will need the third outfitting pier -- excuse me, the second outfitting pier on the East Bank for the DDG acceleration, but we've got line of sight to all of the things strategically we need to do to support that growth. Lots of opportunity. So with that opportunity, back to people, right? It always comes back to people. We have the team in place. We have, I'll say, somewhat unique set of skills that we take from the front part of R&D and our [indiscernible] demonstration and how we're thinking about the relevance of amphibs to the Navy and how unmanned could be a really important part of that platform and that strategy through the planning processes, intricacies of shipbuilding, the complexities, if one part of a very well-oiled orchestrated machine doesn't work, it's a fly in the ointment and we have a planning team that can react to that with agility. Supply chain, we see ourselves as the hub and a connector of our supply base. And so we are sleeves rolled up in our supply base, working with our suppliers, whether that's sending engineers and planners, IMS experts, people that have done MRP conversions. All of those folks are at our suppliers' disposal. Sometimes they love that. Sometimes they don't, but they're there, right? We are -- they are an extension of us and we are an extension of them. And that's how we think about that. From a business perspective, whether it's governance and business systems, Sarbanes-Oxley, all of the things that we know that are absolutely central to how we have to operate. We also -- cybersecurity, all of these things are in our core competencies and not just in the divisions, but in reach-through to Chris Soong as our CIO, to Todd Borkey, as our Chief Technology Officer, the capabilities that are on the table for us to take advantage of. And then lastly, operations right? It all happens. That's where the rubber meets the road, making sure that our folks' safety and quality are table stakes, right, and making sure that our people are safe or sailors are safe and the products that we build because we build them with first-time quality. So the case study I wanted to talk about really briefly. So first Slide 3, yes, step function capability, great things for the fleet. I want to talk more about the muscle that it developed for us than the capabilities that it brought. Now the win for the organization from a business perspective is because of this capability that we were able to -- muscle we were able to build and we're continuing to build up was that we were able to deliver basically a first-of-class ship. It was a cardinal change to the contract. So first-of-class ship within single-digit weeks of a date we set 5 years earlier. This kind of, complexity, that is a really hard thing to do. And so -- but we have a process that allows us to do that, and we are deploying it across the portfolio. Understanding that all of the stakeholders have to play a part in that, and we can't do things serially as we might otherwise do on a different day and a different contract. But to be able to work those things collaboratively was absolutely instrumental to making that happen, and we are deploying that across the portfolio. So what do I want you to take away for Ingalls? One, we're really excited to be shipbuilders. That's the first thing, right? We consider an honor to do what we do for the nation, for the enterprise, and we're focused on continuing to do that and doing it the best that we can. 85-year partner to the Navy inserting new technologies. We want that to become our bread and butter. We've worked very hard on that because we know that on a 3- to 7-year contract, depending on the platforms that we build, thinking that nothing is going to change over that period of time is absolutely going to make us irrelevant, right? And so we have to be able to insert technology, do it well, do it affordably and do it the way we say we're going to do it. Investing strategically in our people and facilities is going to position us to not only execute on the backlog we have, but then potentially to grow beyond what the backlog will already allow us to grow and then absolutely being relentlessly focused on executing the backlog in order to keep ourselves relevant, driving affordability and profitability for the enterprise. I thank you for your time. It's been an honor to represent the 11,000-plus shipbuilders in Pascagoula, Mississippi and around the country. I'll turn it over to my colleague, Andy Green, for Mission Technologies.

Thanks, Kari, and thanks everyone, for being here today. It's good to see some familiar faces as well as a bunch of new faces. I'm Andy Green, I run the Mission Technologies business for HII. I've got a little over 30 years' experience in the industry, including my time in the Navy. And actually, my first day at HII was the day we spun off from Northrop Grumman. So been around seeing a lot of changes in HII and really excited about where we are here today. Before we get into some details around Mission Technologies, what I'd like to do is show you a short video then encapsulate some of the things that we do, and then we'll talk some more details. Roll the video, please. [Presentation]

Thank you. Before we get into kind of where we are today in Mission Technologies at a glance, what I thought I'd do is kind of talk about our vision for Mission Technologies. We get asked a lot where you're going with this. This has been over the past several years. Where are you going with this? Who do you want to be, et cetera? And I thought it would be good to lay out how we think about it internally where we're going and where we're driving towards. Starting from left to right, and all of these things are very interconnected, obviously. First of all, the people and the culture. We have to become the employer of choice if we're going to attract the best people in the industry to keep us on the leading edge of technology in the industry. So we've got to become the employer of choice in defense technology so we can complete -- compete for our raw talent, which is going to make us successful. Industry-leading top line growth. We had a phenomenal 2023. We're very well set up going into 2024. We believe with the successes we've had, with the work we've done to create this platform, the alignment that Chris talked about with our portfolio and national defense strategy, it positions us perfectly to be in that top quartile of industry growth and technical capabilities. We're going to continue to invest in and expand our technical capabilities because as you all know, we've got to offer a differentiated solution to be able to compete and win in this business and we're going to continue to invest and expand our capabilities in the technology area, and Todd is going to talk a little bit more about that later. Then service delivery. This is something that is absolutely critical that we be renowned for being best-in-class and have what we like to call that client obsession, that obsession with customer satisfaction. That's going to enable us to do a couple of things. It's going to enable us to expand business with existing customers, but also continue to win re-compete and win new business at a higher-than-average rate. It's absolutely critical that we're obsessed with customer satisfaction and that's why it's on this list. Then when you think about brand awareness, a lot of people know HII as a shipbuilder, but this is about elevating HII's brand. So people look at us and think of HII as synonymous with advanced technology solutions. So when they're looking for -- they've got a problem, customers have a problem, they know they can go to HII and we're going to leverage the most advanced technologies out there to provide the best solution possible. And then all these things, we do all these things right, and we get to where we want to be on all these elements. Does what at the end of the day, what we need to do, which is to create shareholder value by driving growth in earnings, but more importantly, driving growth in free cash flow. So we are very focused on all of these elements, and it gives you a sense for kind of what we think about and what drives our decision-making every day. So Mission Technologies at a glance. We've come a long way since we created the division in late 2016. If you recall, we were at a little over $600 million in revenue. We're up to $2.7 billion now. This portfolio is vastly different from where we were several years ago. And like Chris has said, we took some very deliberate actions in shaping this portfolio over the past few years to make sure that we are aligned with national defense priorities and the national defense strategy. You can see a very significant concentration around C5ISR, cyber and EW and live-virtual-constructive solutions. For those of you not familiar with the term, LVC, you'll see it sprinkled throughout the presentation. LVC, it's essentially advanced modeling and simulation based training solutions that you saw in the video early on. That's what live-virtual-constructive is or also known as LVC. We believe that this portfolio, very deliberately shaped through M&A, we did divestiture, some equity investments, et cetera, deliberately shape this to make sure that these capabilities are very well aligned with our defense customers and they're aligned with high-growth markets. So that's kind of how we went about it. A lot of you all who have been following the company are familiar with it. We had a phenomenal 2023. Back in 2022, we had -- 2022 was a heavy, heavy integration year. We spent a lot of time, a lot of our folks had almost 2 jobs doing integration of Alion at the same time trying to grow the business. We grew the business at 4%. But really, when we were finishing it with integration at the end of 2022, we hit 2023 running. And it shows up in our numbers. We were at 13 -- over 13% revenue growth. Had a bunch of awards, almost $6 billion in awards, and that doesn't even count $1 billion MAC that we were a part of the winning team on. Our book-to-bill was just a hair under 2x, which positions us very well for strong growth in 2024 and beyond. The other stats, we're in a lot of countries. We're spread out all over the world in terms of the locations and facilities. We have about 7,000 employees and that number is growing. So looking at -- I mentioned we won almost $6 billion in awards. I like this chart. This shows you kind of some of the larger awards that we won last year. Well, one of the things about this chart that I like is it shows you across a number of different customers, still a lot of Navy centricity there, but also Air Force and the other DoD customers. So a more diverse customer set than just Navy. And it also shows you, from a capability standpoint, winning across a variety of these capabilities. And in fact, in 2023, we saw growth across the board in every business unit. It was not limited to 1 or 2 outliers. We saw very strong growth across the board. Just to give you a couple of examples over here on the left is what we call [ Genio ]. This gets back to what I mentioned earlier about our obsession with client satisfaction and a relentless focus on execution. Chris mentioned it. Jennifer mentioned it, Kari mentioned it. The HII focus on execution. This is exactly where it pays off because this contract was less than $900 million originally. We had exceptional performance. We absolutely focused on keeping the customer -- actually customers satisfied on this. This is taking new technologies very quickly, fielding them for the war fighter in the market. We focus on the execution and making sure that our customers were happy. When it came around for the re-compete last year, that contract was upsized from less than $900 million to $1.4 billion, okay? That's phenomenal growth for just an existing piece of business. Press is even a more magnified example of that. Press started out as about a $350 million contract just about 3 years ago, okay? And then we just won the re-compete last year. That contract was upsized to $1.3 billion because of our performance on the contract and that obsession with client satisfaction. So I'm not going to go through all those details for every single one of these. But every single one of these large awards kind of illustrate strong execution and a focus on customer satisfaction and excellence that's going to enable us to continue to win. I will say -- point out just a couple of real quick ones. The Lionfish $350 million contract for small -- the most advanced small UUVs for the Navy, that contract because of our performance and the quality of our product was doubled in size. And then the -- this is actually a classified contract that we can't talk about, but it's a contract we've been doing for 30 years involving the most advanced next-generation electronic warfare. And then I'm going to talk a little bit more -- a little bit of a case study on Minotaur, which is -- here, it shows you about $244 million. That was another example where that original contract was about $70 million, $73 million to be exact, back in 2020. And because of our performance on that contract, it was more than tripled in size when it came time to renew it and expand it. So great examples. These are some of the things that are driving that $6 billion in awards that we won last year and what gets us set up for strong growth in 2024 and beyond. So our capabilities. I talked a little bit about this before. We've been very deliberate about how we've shaped this portfolio around these very important and what we view as high-growth capabilities. C5ISR, I'm going to talk a little bit about Minotaur. It's a great example of where we're rapidly fielding doing R&D and fielding advanced technologies and getting products out to the war fighter very, very quickly in C5ISR. LVC solutions, again, that's the advanced modeling and simulation training solutions that we provide. We operate the largest LVC network, which is the training network for the Navy, and you've probably seen contract awards lately. We've been expanding that business, but also expanding into the Air Force and see the opportunity to expand elsewhere. Cyber and electronic warfare we have the big data platform that ingests petabytes of data daily across almost all of the services, providing support for cyber operations and analysis, franchise position that we've had for a number of years and we continue to grow. And then electronic warfare, again, can't go into details on that. We've got some cutting-edge capabilities there with some key customers that had been growing for 30 years, and we see significant growth potential going forward. And then unmanned systems, absolutely without a doubt in the unmanned area we're the leader there. We've got over 600 UUVs in place. We do UUVs, we do USVs. We do the autonomy. We're constantly investing in that business and releasing modernized and updated versions of these vehicles. And I'm going to talk a little bit more about that in some later charts. The -- underlying this, the reason we put artificial intelligence down here at the bottom is because AI is not really a separate capability or business unit for us. AI is a capability that pervades all of these capabilities that we have. It's becoming embedded in almost every solution that we provide, there's an AI component. It's kind of like you don't talk about IT separately. AI, it really cuts across all the different domains. So Minotaur, just a quick case study on Minotaur. I talked about that. We expand that contract from $75 million to almost $250 million. Big success story. What Minotaur is essentially -- if you're not familiar with it, it's essentially a mission management system that takes data and it takes input from a variety of sensors, whether it could be a shipboard radar, it could be a synthetic aperture radar on a predator or up from a satellite, it can be AIS ship data, it can be electrooptical data from a satellite or a UUV or another plane. It takes all of that data, and it combines it in one spot out at the edge where the war fighter can actually use it and it takes AI tools out at the edge and declutters that environment. So the war fighter out on the edge can say, okay, I'm in a very congested area, there's a lot of things in theater. I want to get all the good guys out of the picture, I want all the neutral things out of the picture that I don't care about. I want it to be reduced to the things that I actually care about and provide me intelligence and surveillance information. And what Minotaur does is help the war fighter. It processes all that data in real time at high speed using AI tools to very quickly provide the war fighter out at the edge decision-making data. It's a priority of the Navy. It's very well aligned for those of you who are familiar with JADC2, joint all-domain command and control. It is an absolute priority for the Navy in terms of JADC2 or you've probably heard DMO, distributed maritime operations, also aligned with that. Again, significant situational awareness benefit, big success story and franchise position for HII. So just a great example of the kind of stuff that we're doing. And then this -- there's a lot of stuff on this chart, but I can kind of boil it down into 3 big chunks. One is this big dome around this entire theater. What we're trying to show is how HII actually participates in all domains and is aligned with national defense priorities, right? For example, this big dome that basically encapsulates the entire theater, we have the tools like the Big Data platform that provide the ability to provide cyber defense support throughout the theater. It also provides the potential data fabric for JADC2 or CJADC2, combined joint all-domain command and control, which includes our allies. That's what the C in CJADC2 stands for. So it gives us the ability to, across the theater, control that platform. Then kind of coming in a little bit this next dome right here, this shows you sort of the reach that I was just describing around Minotaur. Can take data, whatever data it is from UAVs, from satellites to other recon aircraft, other ships, et cetera, takes all of that data and then combines it, pushes it out and gives a common operating picture to the war fighters that need it, where they need it, when they need it. And then unmanned, we talked a little bit about this. We've got an extremely strong position in a very large installed base of UUVs. We continue to support the Navy's efforts around USVs and in particular, USV autonomy. And specifically in USV autonomy, we have a very strong position in multi-agent or collaborative or swarming autonomy. It gives you the ability, you probably heard a lot about it. We have that capability for the Navy or the Marine Corps today, to do that, to apply that autonomy to multiple platforms and coordinate activity in theater. And then lastly, I'll point out, we have it here, Yellow Moray UUVs. HII Yellow Moray is our torpedo tube launch and recovery system. And what that does is it gives the ability to send a submarine -- the operational submarine, the ability to send that UUV out and recover it all through a torpedo tube. We're the only ones that have successfully demonstrated Yellow Moray, which is a torpedo tube launch and recovery system. We've done that on an operational submarine at sea. That's a huge game changer for UUVs to be able to do that. So underlying all this, I'll just say it one last time, the training aspect. You can't overlook it. Very different from when I was in the Navy. You've got to -- training is very expensive. You've got to have the most advanced modeling and simulation to provide that LVC training activity. Much more cost effective for the Navy, for the Air Force, and it kind of underpins the ability to simulate all of this and train on it like it's real-time. Okay. So how are we going to continue to grow? And where are we going from here? Protect and grow the base business. That's kind of motherhood and apple pie, but we got to do it. It gets back to that obsession with the client and that relentless focus on execution. Our job is to make sure that we execute on the existing business, stay focused on our customer and make sure that we can continue to expand business with existing customers, but also make sure we can defend the recompetes as they come up. Most of our contracts are 5 years, and they tend to come up -- there's always something going on. So make sure that we can defend it and expand it. Capture strategic new work. Make sure those capabilities that I talked about around like CJADC2 and unmanned and big data, make sure that we can capture work in those areas and continue to extend into other DoD customers. And then we talked about AUKUS. Chris talked about AUKUS. Eric is going to talk about it here in a little bit in detail That's a once-in-a-generation opportunity. We have -- Mission Technologies is very, very well positioned to support not just Pillar 2 where our capabilities align, but also through the nuclear and environmental business support Pillar 1 and what Jennifer and the broader HII is going to do, and Eric is going to talk a little bit more about that. Chris also mentioned margin expansion. We are focused on expanding margins. We're going to continue to grow. We've got a largely cost-plus portfolio. We're going to continue to grow, but we're going to try to expand the fixed price portion of our work. So migrate that portfolio over time to have a greater percentage of fixed price work that enables us -- in our piece of the business enables us to improve margins. And then lastly, investing in future solutions. We're going to continue to invest. I talked about R&D, the importance of investing. We're going to continue to invest to stay at the leading edge of technology. We're going to continue to refine our practices. We're going to continue to look for partnerships with nontraditional technology providers that enable us to act as a partner and kind of bridge that technology to the DoD and the war fighter themselves. So what are we going to do to make that happen? We have to have high-caliber talent. There's just no question about. This actually is the most important thing that we can talk about. We've got to have the highest caliber talent. We continue to focus on that, getting programs in place to make sure we attract the best people, the best technical talent and we make sure that they understand being part of HII offers you a lot of opportunity. We very quickly -- Jennifer has talked about the use of data analytics in human capital. We've done the same thing. We very quickly realized that people would leave to go get a promotion or get a new job, something like that. At HII now, they're starting to see that there's 44,000 jobs at HII, 44,000 different things that you can do at HII. They're starting to see that and realize I can go over there. I can do this, I can do that. Well, I can go work. I've sent plenty of people to go work with Jennifer in her group and Kari with hers. So they've seen that career mobility is actually a big positive at HII. And then like Chris talked about at the beginning, building that engaged, diverse and inclusive culture, those values. Everybody talks about them. Jennifer does, Kari does, Chris does. It's something that is foundational to all of HII, and it's very consistent across HII. And I think people like it. You can see we've got a pretty well-qualified workforce with a lot of security clearances, very technical workforce, heavy, heavy, heavy on the veterans. About 35% -- this is my workforce, about 35% are veterans. So we've got a very, very strong and qualified workforce. All of these programs that we're doing to improve retention and to improve hiring are paying off. Our retention is very, very strong. It's much better than industry norms. We're very proud of it that people come to work for HII and they want to stay and keep working for HII. So just to wrap up here with my key takeaways. Again, we had a great year last year. We've built off growth in '22 with some -- and really took off in 2023. We're very, very well positioned with this almost $6 billion in awards. We're very, very well positioned to grow going forward where we've got leading franchise positions when you look at each of those key capabilities that I talked about. We've got leading franchise positions within those. We're aligned with the defense priorities. We are very disciplined when we think about driving growth, our processes. We have disciplined processes around execution, and we have highly disciplined processes around business development and how we go after and prosecute new business. It is a very organized, methodical way to do it, and that's what gives us the comfort that we're going to grow going forward. And then, again, we nurture high-caliber talent because that's going to make us successful in the future. So that's all I have. We're going to take a 15-minute break. So we'll restart at 10 minutes to 12. Thank you. [Break]

Great. So if you wouldn't mind please finding your seats. I promise it'll be interesting. Terrific. Great. Well, welcome back. I'm Eric Chewning, the Executive Vice President for Strategy and Development. I joined the HII team about 1 year ago with 24 years of industry experience in a couple of different roles across both government and the private sector. Those roles included being the Chief of Staff for the U.S. Defense Secretary, the Deputy Assistant Secretary of Defense for Industrial Policy and Co-Leader of McKinsey's Aerospace and Defense practice in the Americas. What I'm going to talk to you about this morning are 3 things. One, the enterprise capabilities that HII brings. Two, why those capabilities are coherent. And then three, how we're using them to unlock new sources of growth. So when we think about the HII capability system, and this was a consistent set of themes across both Jennifer, Kari and Andy's conversations, I think are 3 interlocking sets of capabilities. At our core is Sea Power Generation. We are America's largest shipbuilder with the full breadth of design, construction, sustainment and disposal activities. Building on that strength and with the acquisitions of Alion, Hydroid and SIS, we also militarize advanced technologies, extending our support to the war fighter from the undersea domain all the way through space. And finally, we have 60 years of deep nuclear expertise operating a nuclear shipyard. And we've demonstrated the ability to take those nuclear competencies and expand them outside of the shipyard to support a depth of both commercial and civil customers. Now these capabilities are interlocking and they're mutually reinforcing. Let me give you a couple of examples. So our advanced technology militarization skills bring with them business agility, new sources of innovation, talent and technical acumen, that makes our ability to generate Sea Power that much more compelling. Our position as the largest shipbuilder brings with it mission expertise and customer intimacy that enables us to be more efficient in how we militarize new technologies, and there are tangible synergies resulting from this relationship. Andy talked about our manned-unmanned teaming, right? The Yellow Moray capability we demonstrated in December, torpedo tube launch and recovery of a REMUS 600 vehicle on a deployed U.S. submarine, right, game-changing capability for the U.S. Navy. We talked about our Odyssey technology stack that we use today to support the U.S. military as an unmanned application for both USVs and UUVs. Both Jennifer and Kari spoke to how we're taking mission technology technical acumen and deploy it into the shipyard to be more efficient and deliver higher outcomes on how we produce the ships. Kari spoke specifically about the use of natural language processing to drive better quality outcomes, the Shipyard Ingalls. And there's a new set of opportunities associated with AUKUS Pillar 2 that I'll get to in more detail. Similar to the complementary relationship between the advanced technology militarization and the Sea Power, we also have significant synergies between Sea Power generation and nuclear expertise. Through Newport News, we operate an at-scale nuclear infrastructure, the workforce, the supply chain, the certifications and the culture that enables us to do remarkable things. We're the only company in the world that does carrier refueling complex overhauls, right? We have a depth of capability that enables us to do nuclear disposal and [ dismailment ] of both aircraft carriers and submarines. But in addition to those services we provide to the U.S. military, we also take those competencies and apply them to commercial and civil customers, right, for like the Department of Energy. And then there's a range of opportunity associated with AUKUS Pillar 1 and how we'll get the Australian Sovereign Ready to operate and maintain Virginia-class submarines. Now while we're realizing the benefits of these today, I'm going to focus on 2 as growth catalysts, AUKUS and the broader nuclear opportunity. But before I do that, just let me put it in context. Chris spoke about the path we have to mid-single-digit growth. It starts with the business today, $11.5 billion. Kari and Jennifer talked about the impact of the military shipbuilding super-cycle, which will drive the shipyards at 4% top line growth. And then Andy spoke to the tailwinds we have around defense technology integration that will take our Mission Technologies portfolio at about 5%, putting the aggregate portfolio north of 4%. And then we have the 2 new catalysts, the Australia and U.K. market opening up both AUKUS Pillar 1 and Pillar 2, and in this broader nuclear resurgence opportunity, which will put us to mid-single-digit top line growth. Now let me spend some time on AUKUS because I know there are a lot of questions around what that means. Taking a step back, when I think about AUKUS, I think about it in the context of a defense free trade agreement or an aspiration to be a defense free trade agreement between the U.S., the United Kingdom and Australia. There's 2 major pillars to that agreement today. The first is around the transfer of nuclear-powered submarine technology to the Australians. Obviously, for Newport News, that's an increased demand signal of 3 to 5 Virginia-class submarines that they will work to satisfy. But what's important to understand is that unlike other technology transfers in the military context, like, say, taking a fifth generation or taking a fourth-generation aircraft and then upgrading to a fifth-generation aircraft, it's a step function change to go from diesel-powered submarines to nuclear infrastructure associated with the nuclear-powered submarine. So that creates a significant amount of enabling infrastructure that fits very well within what our Mission Technologies Nuclear Environmental Group does, right? How do they take that discipline nuclear operations talent, that nuclear workforce and supply chain development, all the nuclear infrastructure enhancements and the sustainment support to help the Australians upskill their capabilities so they can operate Virginia-class submarines. In addition to our ability to do Pillar 1, we have Pillar 2. And as Andy and Chris both indicated, the priority areas for Pillar 2 fit very well within our mission technology skill set: advanced cyber, artificial intelligence, autonomy, data sharing, defense innovation, electronic warfare and undersea capabilities. And then there's a third set of opportunities that are inherently cross-pillar in nature, right? The manned-unmanned teaming example, right, taking capabilities that we have today in Mission Technologies and then applying them to manned-unmanned teaming concepts for the AUKUS Alliance, as an example. Now let me do a bit of a deeper click into Pillar 1 because I know there are questions based on how this opportunity will play out over time. So as we approach the AUKUS Pillar 1 opportunity, when it was announced, the Australian government announced as a $250 billion investment program over 30 years, okay. So how does that play out? In December of 2023, the U.S. government announced a $2 billion AUKUS FMS Case to effectively help the Australians do the training, planning, engineering and support to begin on the pathway to be Sovereign Ready. In parallel to that, the Australian government is undergoing significant investments in their own infrastructure to help make them Sovereign Ready to operate SSNs. So that's investments in infrastructure around where the base will be, infrastructure investments around a depot facility or a disposal facility as well as investments in their own supply chain and their workforce, so that they're able to operate these submarines on their own. In 2025, the Australian government is committed to start doing an investment in the U.S. submarine industrial base to help increase shipbuilding cadence. They've committed to a $3 billion investment to help U.S. shipmakers do that. In parallel to these activities, there's an increasing number of port visits by both U.S. and U.K. submarines to Australia. This will culminate in 2027 with the establishment of Submarine Rotational Force West, which will be a multilateral Submarine Force to 4 Virginia-class submarines, 1 Astute-class submarine and the Collins-class submarines that Australia currently operates. After Australia has distinguished themselves to be Sovereign Ready, we'll take ownership of over 3 to 5 Virginia-class submarines sometime in the 2030-time frame. And that's this line here. Now beyond that, there's the SSN-AUKUS, which is a U.K. led design, which will be the Next-Generation Attack Submarine for the United Kingdom and for Australia, which is expected to be delivered in the 2040-time frame. So when you think about it from an HII perspective, our primary focus is how do we help from here to here to make sure we have the Australian Sovereign Ready to operate our products and Electric Boat's products, the Virginia-class submarines in Australia. Now as Chris indicated, we've taken several thoughtful steps around putting together strategic partnerships in country to help deliver on that. So you've seen announcements over the past year about our relationship with Babcock International to pursue opportunities in Australia. Babcock, as a U.K. submarine sustainer, has significant nuclear expertise as well as supports the U.K. submarines. We announced an MOU between Babcock, Bechtel and us around infrastructure projects in Australia. In addition, we've announced strategic partnerships with the government of Western Australia where SSN West will be based and then South Australia, which is where there's a lot of industrial activity. And so we're putting in place a network of partners in country to help deliver on these commitments. In addition to the Pillar 1 opportunity, we have Pillar 2, right? And has been noted by several industry watchers, if Pillar 1 is historic, Pillar 2 has the potential to be revolutionary because at the heart of what Pillar 2 is trying to do is increase not only industrial-based integration, but interoperability among the 3 allies. Now our ability to participate in this revolution is entirely dependent on the acquisitions the company made through Alion, Hydroid and SIS. So when you think about it, Alion brought to the table deep capability in cyber, artificial intelligence and electronic warfare, all AUKUS Pillar 2 priorities. Hydroid and SIS bring within the autonomy and the undersea capabilities. So collectively, as a portfolio, now we can fully engage across both Pillar 1 and Pillar 2 as the U.K. and the Australian markets open up for us. Now this is all just the catalyst associated with AUKUS. In addition to that, we have a growth catalyst around the expansion of our nuclear competencies. Today, we operate a differentiated operating model between Newport News and the MT Environmental Group, where the Nuclear and Environmental Group with MT is able to take capability, deploy it in the shipyard and bring it back out to expand our overall nuclear workforce competencies. We're already involved in 4 different Department of Energy joint ventures. These are long-duration contracts, high ROIC with strong visibility and growing demand. That enables us to expand on that nuclear workforce we have at Newport News and deploy it outside of the shipyard. As has been noted, nuclear has strong tailwinds in itself. A couple of those tailwinds are the increase in the DoE, NNSA budget. As we recapitalize the Triad, we also need to recapitalize the nuclear infrastructure that enables us to create those platforms, right? That's what this investment is going to go to. In addition, as countries begin to grapple with their 2050 decarbonization commitments, there's the opportunity for new nuclear applications in a civil and commercial context. This provides us with a significant pipeline around how we think about expansion of nuclear. We've got over a $5 billion DoE M&O contract value pipeline. In addition to that, as Jennifer indicated, as the Nimitz-class aircraft carriers aren't activated and the Ford-class carriers come online, you need to do something with the aircraft carriers, right? This creates a new evergreen pipeline associated with this [ element ] and disposal of Nimitz-class carriers, the first of which being CVN 65, which is outside of my window at Newport News. This will be a new generation of potential opportunity for the D&D of the Nimitz-class carriers. And then in addition, there's the global and commercial opportunities we talked about. All this enabled by an operating model that enables us to deploy nuclear competencies across the divisions within the company. Now specifically, the opportunities look like this. We have our current DoJ, our DOE JV footprint. And then we've got the range of upcoming opportunities that we're pursuing. The darker blue are the DOE opportunities, starting with the OSMS opportunity, but then you've got Pantex and the Strategic Petroleum Reserve. And then Kansas City and Y-12 out there a couple of years from now. The gray are the upcoming D&D opportunities. So we talked about CVN 65 and then the potential to support U.K. SSN D&D. And the light blue are the AUKUS related opportunities around Pillar 1 Sovereign Ready support. So a significant set of pipeline in the short to midterm, all leveraging core capabilities that the company has across Nuclear and Sea Power. Now as I mentioned, the strategy is accelerated by a range of strategic partnerships. I'll talk a bit about the Babcock one here in a minute. So in July of 2023, we announced a strategic agreement with Babcock to explore complementary maritime opportunities globally. We have collectively between us deep expertise in an operating model around nuclear modernization and maintenance as well as familiarity with maritime platforms. We added to that partnership in December with Bechtel Australia to pursue opportunities specifically in Australia around the maritime infrastructure build out. And there'll be those opportunities we discussed collectively through this team. So in summary, a couple of things to kind of reflect on. I think one, if you think about the portfolio, think about it in the context of these mutually reinforcing capabilities, our advanced technology militarization, Sea Power generation and our nuclear expertise, and how those are unlocking new catalysts for growth, AUKUS and Nuclear is just 2 examples. Our portfolio, with respect to AUKUS, is well aligned to both Pillars 1 and 2. The near-term opportunity for us in AUKUS is going to be nuclear infrastructure, workforce and supplier development in Australia. The FMS Case was already put out there in 2023. And then we've got a $5 billion nuclear opportunity pipeline across both the civil, commercial and international markets, and we're pursuing a range of strategic partnerships to help accelerate this growth. And with that, I'll pass it off to my colleague and friend, Todd Borkey, our CTO. Todd?

Good morning. I'm Todd Borkey, I'm the CTO at HII. I joined HII with the acquisition of Alion, where I was the CTO since 2017. And my career is 50% Bell Labs, AT&T, Global Communications, and I spent a lot of -- half of my career in defense. But what I did do over that whole period was aligning R&D portfolio to unmet market needs. So today's discussion is going to be about getting you from what we see in the environment until you see -- you will see in our portfolio and why you've heard several times today, starting with Chris and each of the group presidents, a remarkable alignment of capabilities with where we are going next -- to the next 10 years in defense. We are in unprecedented time of technical change and technical urgency as we pivot to the Pacific for -- and ready for a great power competition, which is going to last quite a time. But there's a lot of concepts here in these 4 boxes that I'd like to just walk through because they set the table for the environment, how we think about steering the business going forward. So there's a very new business environment, right? Silicon Valley has brought us an Information Race. It has brought us AI; autonomy and it has brought space commercialization. These are radically altering technologies that the DOD can leverage to increase lethality while decreasing budgets. It's very, very powerful tech. But the acquisition practices of the DOD for years have to evolve. One of the great reasons Andy has enjoyed J-NEEO and $6 billion of achievements in 2023 is the business model we have in our Mission Technologies unit, we bring models, analyst data and analysts alongside the DOD, and we do turnkey solutions for technology transition. It's a great model for the coming period. The strategic transformational tech is so consequential that I have to talk about it, AI distributed, compute and big data is massive in the way we will drive efficiencies of data flow, collect earlier, no first, no more, and could create tactical advantage with that information. And the autonomous systems are going to be the method by we -- which we persist at the edge to no more and do that early detection. Commercial space is revolutionary. It cannot be processed by humans, AI and smart data sharing are how you harness the capabilities from commercial space. The quantities of petabytes that are collected in short periods of time overwhelming an human analyst, and AI get us through the rich pieces of that information, and we distribute it into the force. You've heard about hypersonic weapons. They changed the calculus and the speed of conflict. We will put humans on the loop progressively to prevail in a conflict where these weapons are present. And then lastly, everybody talks about Quantum. We will see Quantum sensing near term in both the RF spectrum and in magnetometry, and we have testing of these technologies as we speak today. But make no mistake, there are new threats by which our DOD is razor-focused and we're in the middle of helping them with that problem. So we have a vast area of denial. We have weapons parity in quantity. We have space threats and hypersonic threats. We have a new contested logistics dimension that frankly hasn't been really had to be planned since -- like it was in World War II, with a world of hypersonic and orbiting rounds, what losses behind the front complex zone will occur. And we will virtualize logistics at the defense industrial base to recover and prepare for that type of very complex conflict. And we also see every time in our news how UAS technologies, $3,000 drones are taking out $1 million dollar tanks, right? The advancements in autonomy and the counters to those techniques are also something we're studying, of course. So a new era of urgent priorities exist for which the new Mission Technologies and the shipyards are poised in an ideal position, not just to be part of it, but to actually lead it. Information Dominance is how we're going to prevent the next conflict. AI, big data, natural language processing at scale, and I'll talk about more about that in my coming slides. Deciphering the data that comes in enormous quantities from space to understand how to position our assets for deterrence is now happening every day. You heard from Andy about Yellow Moray and the launch of a medium-sized UUV from a torpedo tube, this will change how our submarine force will be not only more lethal, but more survivable and can prepare the battle space for advantage. Decision Dominance, it's all about -- we don't take a kill change anymore. We talk about kill webs, right? And getting the right information spatially and temporally at the right place, for the right asset, at the right time. This is now with AI helping us do this. We have the data connectivity and the efficiencies of data flows to make it happen. As Andy talked about big data platform, that big bubble diagram he had, we are moving petabytes daily to the right places, at the right time and making sure it's cyber clean. And now I'll just add, you've heard about Replicator, where replicator will go is still being determined, but replicator is an Indo-Pacific strategy, where we have our modern interpretation of how to complicate the conflict zone with unmanned assets that will also not only keep eyes open, but also deliver lethality when and where needed. Lastly, Contested Logistics. We, as part of the defense industrial base, are actively preparing and thinking about our role in that. And our LVC business is extraordinarily suited for the virtualization of everything from the training you heard about, but also in how we train operational plans, how we deploy them and generate demand and manage logistics. We are virtualizing the entirety of conflict and the technology, the physics-based models, the ability to manage the data is all here today. This is a functional diagram of HII. This is how I look at HII. And what I want to share with you is, this portfolio, which is ideal for the coming decade, I'm not going to walk through these bullets, but these bullets depict the dynamics in each segment that are driving that, I'll call it, ubiquitous growth that Andy spoke of, in every unit. Our portfolio, because of these items are bulletized here, are the reasons we're enjoying growth in every segment. Those 6 boxes on the left represent. Mission Technologies. The technology in those 6 left to boxes, we are now harvesting in joint efforts in shipbuilding. Make no mistake, AI harvest time. And you heard from Jennifer and Kari today how important time is to our Navy. They want more submarines. We want faster carrier overhauls. AI is going to help us with constraint removal, decision aids, copilots at all the places it's needed and understand and remove those constraints progressively and do a great deal of automation. We could not -- I could not be more excited about generative AI and what it means to us. Its capabilities are extraordinary. And so I'll talk a little bit more about it in the coming slides. But let me just canvass a few high points about these 8 boxes. C5ISR, it's all about getting faster, pushing the data at the right time, at the right place and being resilient because in a contest, we will suffer losses. And the resiliency of that kill web is extraordinarily important. Cyber. We're going to begin with information operations and try to prevent deterrents at every cost. And that's an information advantage situation. That's not knowing more, knowing first, and knowing -- being able to pour through data at scale. We are doing this as we speak. But make no mistake, Cyber is being modified by the speed of AI. And for -- command and control has been accelerated by the speed of AI. Unmanned. Unmanned is helping us today not only prep the battle space, but also conduct a wide range of new missions to make existing platforms more capable. Unmanned technologies are going to pour, just like they do in our cars today, there's truly unmanned cars, but everyone who doesn't buy an unmanned car is also getting technology that does accident avoidance, emergency braking, makes us look at our mirrors. The unmanned technologies are going to proliferate across manned platforms as well in the coming period. And you will see human machine teaming take place at an unprecedented level. LVC has never been a better time to be in virtualization. The physics-based models we have in our NCTE enterprise, which allows that train like you fight, fight like you train concepts to take place all over the globe, where we can generate synthetic threats for Norfolk and drive threats into actual workstations on chipset sea on the other side of the earth, that technology, those physics-based models of trust have enormous great future for us. The best way to train AI -- generate the synthetic data that great AI models will require will become from our trove of physics-based models we have in our virtualization environment. We are working on this and this, we will enjoy for the coming decade. Nuclear and Environmental. I believe nuclear microreactors and small modular reactors are here. They create an unprecedented opportunity for us to mobilize around the globe without carrying hydrocarbons with us. That has an implication of speed and resiliency. And also, I believe there is -- it's an era of directed energy where the 2 technologies have a natural synergy together: continuity of government, continuity of economy, and the next conflict will come from these technologies. Readiness, digital twins are no longer just for the engine or the machine, but they're for the entire platform, the human, the environment in that platform, but they're also for the entire enterprise. The economies, the constraints and the lethality of the entire enterprise, whether it's a fleet of ships, a fleet of satellites or a fleet of cars and trucks. The enterprise twin concept, now possible with generative AI, is transforming how we look and how we actually maintain and create organizational sustained intelligence growth, understand deeper -- deeper relationships into our supply chain, our designs, our people and our processes, but by which we harvest that knowledge and grow it over time. In 5 years, you will all look at companies that do evaluations based on the quality of their data maps and the quality of their generative AI models. We're working towards that now. So a little deeper dive. These 5 boxes talk about that near-term portfolio power. This is about that alignment with DOD priorities in the coming period. AI and Big Data, I think, speaks for itself. We use every -- we were an early mover in AI at Alion. By 2019, we were ingesting 20 million records a day, mapping human train with natural language processing from hundreds of periodic plain English queries to map you and train up for our clients. Today, that continues to expand. We can use that technology to diagnose the human enterprise. What we use to map the globe to understand friends and foes, we can actually put it ourselves and understand constraints. If there's a narrative for a problem you wish to understand, natural language processes can find it for you microseconds after it occurs, so you can get to leading indicators. Enterprise realization, of course, has been historically lagging indicators. AI is going to get shipbuilding, C5ISR, asset management to leading indicators, and that's a massive transformation. That is an Industry 4.0 phenomena that is coming quick. And this all ties to the Decision Dominance, all-domain war fighting, the LVC links to coalition rehearsal. We now think of LVC in not only in training, but also in operational planning, and we also think about it in working with our coalition partners, and also now emerging in Contested Logistics. You've heard of Replicator, a massive pivot in a way to neutralize a parity situation to keep advantage in the U.S. for our security interest. And then lastly, that great power -- that great power competition, we play a role in the nuclear triad, which will be recapitalized continuously over the next 20 years. But also that $1 billion of RDT&E that Chris mentioned on his first slide, stands to grow as we conduct a great deal of RDT&E on behalf of the DOD. And that effort gives us a lens by which we've been using since 2017 to perfect this portfolio, but that R&D, that RDT&E base allows us to put the best solutions at the right time and look broadly across Silicon Valley, small business, university research and our own work to come up with the best solutions that are solving combatant command needs. So a lot of people asked after the Alion acquisition about synergy. That synergy is alive and well. And this slide is depicted to kind of give you a little bit of insight to those. So Shipbuilding Transformation, followed by Navy Transformation and Interdivision Solutions, which Eric just alluded to, are really the deep examples of the new HII capabilities, and how those 8 functional boxes I showed are working together, creating new value, new delivery and execution, confidence and speed, more throughput, and more kinetic and lethal effects ultimately where we need it. So generative AI makes us or positions us potentially from massive levels of automation. We write 100,000 work instructions to build a carrier. And in any given day, there's probably 15,000 of those work instructions active. Generative AI is going to eliminate thousands of hours in preparing documentation every day for us and getting it 70% right. We will put more and more humans on the loop. We will provide more and more co-pilots and decision aids out at that workforce that's out across the different shipyards or across the other side of the earth inside a compound where Mission Technologies is working. Ultimately to create superior informatics, remove constraints and get a higher effective performance. So that AI concept of harvesting time, we're all about it. The Navy, whether it's a warship management, a program office or literally a fleet, we help to stand the Navy's transformation by getting on top of its data and saving it billions while increasing lethality. Our relationship with the Navy will progressively change because of these, and we're excited about that as well. The power of harnessing AI on top of our data and the Navy's data at the same time is extraordinary and no one else could do it but us. New Nuclear, I think I've spoken about, I think it is an exciting era coming that provides a resiliency to the U.S. economy, to the U.S. defense infrastructure, to the U.S. government in a period of potential global conflict risk. But Eric, as he pointed out, Pillar 2, when those functional capabilities we saw in Mission Technologies allow us to do these Interdivisional Solutions both for Australia that will take Pillar 2 and Pillar 1 together and create this new trilateral treaty to new places, HII is uniquely suited to do that. So what I'll leave you with, I can affirm all units are experiencing growth and our technologies align. I hope we've presented that to you today. AI and Big Data synergies are going to help not only HII get data centric to get on top of its data and get on top of execution at unprecedented levels, but we could do with all our government clients simultaneously. And that's that third bullet. Lastly, I think the AUKUS treaty is an exciting evolution for us, which we are mobilizing upon. Eric is working at a great set of strategies with industrial teammates, and how we're going to operate that and harvest and monetize that treaty and promoting U.S. interest at the same time. So thank you for your time this morning. I will now pass it on to Tom Stiehle, our CFO.

Well, good morning, everybody. It's great to see everyone. I appreciate your interest in HII and for participating in our Investor Day right now. I am Tom Stiehle, and I'm happy to be here to provide some remarks on HII's financial performance or -- performance or strategy and our outlook and give some financial context to the briefings that we've heard earlier here. You've heard from Chris and several of my peers about where we find the business right now. And hopefully, that you've gotten a better appreciation of where we believe we can expand and grow the company going forward. Just some quick background on myself here and I think with my experience, I've spent 38-plus years in A&D, all within the legacy companies with HII, Grumman, Northrop Grumman, down at Ingalls Shipbuilding, and now with the corporate office here in HII. I'm a mechanical engineer by degree, and I spent the first 6 years of my career doing that function, the last 32-plus years in various forms and capacities within business management. So with that said, how about we move on to the key financial messages here. As I work myself through the presentation, I'd like you to think about a couple of things here. First, we believe you heard Chris kind of hit it upfront, but we believe our portfolio is well diversified right now of products and services across the enterprise, and it's well positioned to compete, win and grow in the current environment and going forward. In shipbuilding, we have a very strong position with the industry with mature production programs, and that's foundational to the Navy's 30-year shipbuilding plan as well as its evidence in the DOD's 5-year provider for the future year of defense programming. For 2023, Andy hit it, that Mission Technologies had achieved record revenue and revenue growth for that division, validating the construction of that portfolio, the opportunity space in the marketplace. Secondly, I'll review the financial performance over the last 5 years. And you'll see that there's been solid performance and growth across our key financial metrics. From now, I'll spend some time discussing our current performance and what that means for expected improvements on revenue, our margin and our free cash flow. And lastly, Chris hit it, I'll go into some more detail. I'll talk about our detailed and disciplined capital allocation strategy, which drives value creation by investing in the business, growing the enterprise and providing shareholder returns. Along the way, I'll highlight where we have our current investments in targeted markets to support both growth and financial performance. My hope is that you gain a perspective how HII is financially delivering the advantage to our stakeholders. When we look at our financial performance over the last 5 years, you can see that we've had meaningful growth across the revenue, the segment operating income, free cash flow and the diluted earnings per share. I'll have slides for each of the 3 first categories here that follow. From a revenue perspective, both the shipbuilding emission technologies has had strong growth, with a CAGR or compound average growth rate of 6.6% over the period. The segment operating income has been equally solid with a CAGR of 7.5%. The segment operating income has benefited both from the top line of the revenue across all 3 divisions as well as the Mission Technology build-out with the addition of Alion. The free cash flow over the 5 years has grown at an average rate of over 10%. And the EPS over that period evidences a strong record of consistent positive performance with a CAGR of 6.5%. I will note that these financial results have occurred over a very difficult business environment period. We've seen 3 years of COVID, the high inflation, weakened supply chain and a tightening of the labor availability, all headwinds to our performance, which really gives credence to the increases that we've seen here in growth and performance. I couldn't be more proud of the tenacity and the dedication of the workforce has exhibited during these very challenging times. We recently increased our revenue growth profile going forward long-term. On this chart, we've highlighted our previous long-term revenue guidance for Shipbuilding of 3% and Mission Technologies at 5%. And we've compared that to the actual performance that we incurred between '22 and '23, which clearly shows that we've exceeded the guide with a Shipbuilding average revenue growth of 4.2% and a robust 8% for Mission Technologies. Also over the -- just the last year, we saw in Shipbuilding a growth of 5.5%, in Mission Technologies at 13.1%. So the growth is actually accelerating over the performance period here over the last 2 years. From a revenue perspective, we have a clear path forward for that strong growth driven by the demand that we have seen on our captured awards. Customer program planning for follow-on awards that we expect. Our current and future anticipated backlog levels, and most importantly, our evidence sales growth that we've seen across the enterprise. Our current backlog level right now stands at $48 billion, and our current plan has the backlog staying at this level or higher for the rest of the decade. Over 75% of the projected revenue over the next 3 years is already under contract, and over 60% is on contract over the next 5 years. So that provides us excellent visibility into our revenue and our manufacturing planning process, so we can plan those ships out very detailed, whether it's labor, material and where it will flow through the yard. All this guidance gives us a mindset that conservatively, we can raise the HII revenue going forward for Shipbuilding to be at 4% and for Mission Technologies to be at 5% with a composite growth rate of 4-plus percent. Now you've heard a lot about potential of additional growth from the other speakers, I want to break that down for you here. Included in the guide of 4% and 5% prospectively between the Shipyards and Mission Technologies, that's the major construction programs, the carrier refueling complex and overhaul and the carrier inactivations. The current Los Angeles Sub and Zumwalt modification programs and the fleet support and service contracts. With the exception of the NSC program, which is sunsetting as we're building the last ship, all of our programs are in production with planned ships, blocks and lots to follow, no new start programs or first-to-class ships other than the Columbia, which were already building asset. Number 2 are in the mix, and that's from a medium- to long-term perspective. For Mission Technologies, the baseline portfolio covers when Andy ran through there against the 6 business units. The division's new business acquisition pipeline process has expanded that opportunity portfolio. Last year, we talked about the pipeline to be about $60 billion. And this year, we rolled into 2024 with that expanded to $75 billion. And there's some tailwinds against that as we find some momentum behind that division. As the banner states here, there's opportunities that we could continue to accelerate the growth even higher. This includes work with new class programs, MRO or maintenance, repair and operations opportunities and modernization programs. And the AUKUS work that Eric talked about, the new international auditors from U.K. and Australia and nuclear operations, both within the country via the Department of Energy and opportunities abroad. Earlier, I highlighted the business environment challenges we have had and continue to work through. Our current portfolio has projects that were impacted by first and second on the COVID effects. The crisis did directly affect our performance. In terms of labor and material availability, supply chain effectiveness, inflationary costs and the efficiency of our operations. For the Shipyards, the 4 key drivers that will improve cost performance, driving margin expansion are well understood, it's labor: hiring, training and retention rates. Improving retention rates will result in more experienced craft personnel in the yard, increasing productivity, lowering our rework and improving operational efficiency. Supply chain. The supply chain is dealing with the same labor pressures, shortages of resources and raw materials and higher commodity pricing. Along with the Navy, we are working with our vendors to improve their skills, investments and execution to support our programs. Third, we believe performance will also improve as a result of our investments. Our operating system upgrades and technology insert into the yards that you heard earlier from the 2 Shipyard presidents. And lastly and importantly, our new bids and contracts will align our bids to the current cost environment that we find ourselves in the business environment that we find ourselves in. This will bring about a better balance of cost risk and contract equity on our awards going forward. So people ask me from time to time, what's the timing of that? We have not given a time frame of it, but I'll give you a rhythm that I expect for the margin improvement and it's over 3 elements, right? The first is that the COVID impact that ships have and will continue to sell off with new ships entering their place in the factory. The new ships have more profit potential. And as we burn down profit -- as we burn down the -- and we tie the risk, that will drive margin expansion against the portfolio naturally over time. Secondly, we are relentlessly focused on steadily improving our current performance, weekly caucus reviews, monthly program reviews, quarterly division reviews, improved operating system execution. We focused on the critical path items that are holding us up, improved quality and rework metrics, training and proficiency of the workforce, ensuring that we're passing those lessons learned from ship to ship to achieve learning, and closing out -- and closely working with our suppliers for improved performance in the material front as well. And the third element I touched upon is the improved contracting balance and equity going forward on the future awards. You've heard Chris kind of mention how many digital ships and boats that we'll be putting on contract over the next 3 years. So you can frame that out and model the 3 elements and how that's going to expand margin over time. From a Mission Technologies perspective, margin expansion will occur by evolving over time, both the portfolio contract mix and content. Currently, over 80% of the contracts are cost type in Mission Technologies, which is kind of limits its profitability. We have focused on complementing, not replacing, complementing existing portfolio -- that existing portfolio with additional work that has more fixed price work and has more technology and company intellectual property, which can generate higher margin rates. Currently, Mission Technologies has over $1 billion of RDT&E work. And usually, that could kind of work is cost type and has lower margins. The back end of these efforts, which will result in programs and projects against those solutions when bid and won should yield higher fee as well. And then the last point here is the international FMS work that we've talked about could add to the portfolios margin rate as well, too. So as the banner states here, we still believe, as I've been saying since I took the helm here in 2021, that the margin rates of both the Shipbuilding and Mission Technology will expand over time, okay? On free cash flow, I believe we've been extremely transparent on our plan, our forecasts and our performance. On our 5-year free cash flow target that we provided from 2020 through 2024 at the beginning of the period, we have been on the mark each year, exceeding that year's guide. And on our [ ARPU ] -- just last earnings call, we raised the cumulative total by $100 million. Also on that call, we provided the next 5-year increment from 2024 through 2028, raising the target by 20%, an increase in the target of $3.6 billion. The higher target will be achieved by higher top line growth that we expect. The margin expansion that I just discussed, disciplined value-creating CapEx with customer participation, continued efficient management of the balance sheet, working capital, cash taxes, interest, our pension is fully funded and a focus on cash management. Our contracts have good payment terms, which allow for regular collections. And so free cash flow conversion should gravitate to a 1.0 conversion rate annually. We've established a solid culture and process and approach, stressing the importance of timely billings and cash collections. And for Mission Technologies, a dedicated focus towards the number of targeted -- a dedicated focus towards a targeted number of DSOs or Days Sales Outstanding for our collections. Chris touched upon this upfront, I'll give a couple of more words here on our capital allocation strategy model, which has been in place since 2011, has served us very, very well, driving value creation. We've come through a period of significant deleveraging since the Alion acquisition, facilitated by our annual increased cash generation. The allocation strategy shown here prioritizes investment grade of highest importance as it allows the best access to capital and ensures our financial security as we execute on long-term contracts. We've paid down debt of $480 million against that debt in 2023, and we'll finish delevering this year with $229 million of additional payments. Next, we maintain our yards to be in good working order with both sustainment and discretionary capital -- project capital to ensure that the yards run effectively and with the expected rate and flow. We've invested for growth with our Navy customer, and I'll highlight that on the following slide. Since 2013, we provided an annual dividend, and we've increased that dividend each year since then. We guide to mid-single digit annual dividend growth rate with a net pension adjusted income payout ratio of approximately 30%. We've increased the dividend in the last 2 years at 5.1% and 4.8%, respectively. As we've done in the past, we'll continue to evaluate potential M&A opportunities for accretive enterprise value creation. This is a very disciplined evaluation review, evaluation and approval process that requires that we meet accretive earnings and free cash flow over specified time frames. We target about $300 million for working capital use within the company, and any remaining cash is planned to be returned to our shareholders. As we announced last month -- let me stay on that page for a second here. As we announced last month, we paid the remaining balance of the Alion $600 million term loan last January, so that's concluded. We expect to provide approximately $500 million to shareholders this year in returns. We recently reviewed our share repurchase program, resulting in the extension of the term of the program through 2028 and an increase in authorization by $1.5 billion. The pie chart on the top right here shows -- highlights our balanced capital allocation across CapEx, dividends and stock repurchases over the last 5 years. With CapEx leading the way at 53% or $1.6 billion in maintaining and growing the business. So the summary here is with the debt squared away and with the current cash generation, we have allocation optionality to achieve our allocation strategy, which is to invest and grow in the business and provide balanced shareholder returns. On the balance sheet -- and our balance sheet and liquidity are in good shape and provides for substantial flexibility for our capital allocation. We finished 2023 with $430 million in cash. And along with our revolver of $1.5 billion, total liquidity just under $2 billion, while total debt sits at $2.5 billion. Our credit rating profile is investment grade and with all the rating metrics going green by the first half of this year. Since the Alion acquisition in 2021, we received upgrades from each of the 3 rating agencies. Lastly, our leverage ratio has come down to under 2 turns delevering through cash generation a year ahead of plan when we announced the Alion purchase. Relative to investing, we announced at the Q4 earnings call that we will continue to partner with our Navy customer to invest in Shipbuilding operations near term, to support our growth and demand by increasing capacity and throughput, predominantly in Shipbuilding and focused at Newport News. HII corporate-wide has averaged the CapEx spend against sales at 3% over the last 4 years, and 2.5% and 2.4%, respectively, the last 2 years. We expect to increase the CapEx for the next 3 years, averaging roughly 5% and in partnership with our -- with the Navy. It will facilitate additional buildings, tools and fixtures, peer upgrades and portable transports to allow for the higher volume of shipbuilding work that we expect. The investment will run through 2026, and then we'll return to our normal targeted CapEx spend in the low to mid-2% range. Once facilitized, these investments are expected to increase our revenue, operating income and free cash flow. The last bullet on this chart here is very, very important underneath the key drivers. The newly provided 5-year $3.6 billion free cash flow target accounts for the higher 3-year CapEx spend. Our 2024 outlook slide is consistent with what we provided at the Q4 earnings day release, no newer change forecasts, and we are reaffirming our outlook numbers at this time. And for the multiyear targets, I've summarized the improved business parameters that we have already discussed. Improve long-term revenue across the corporation at 4-plus percent, a healthy backlog for years to come that will provide excellent visibility to revenue and our manufacturing planning process to ensure we get those ships off to a great start. And improved 5-year free cash flow of $3.6 billion, near-term CapEx spend to increase the flow in the yards, which is incorporated in that 5-year free cash flow guide. A continued strong balance sheet coming from the delevering that we accomplished a year earlier and increased returns to shareholders that we announced for 2024. So in summary, our Shipbuilding divisions have highly visible and stable, strongly supported and long-term production programs, driving Shipbuilding growth at 4%. The Mission Technologies top line growth will continue to drive HII's revenue profile. Free cash flow generation has grown and will continue to do so going forward. Our focused investments in Shipbuilding and Mission Technologies will meet customer needs and improve performance, while making our offerings both more affordable and profitable. Lastly, with our strong balance sheet, we will continue to be very disciplined with our capital allocation process, driving value creation across the enterprise. This concludes my remarks. I'd like to thank you for your time and attention, and I'll turn the call back over to Chris here for his final remarks.

Okay. So rather than have a lengthy bit of remarks, jeez, we just went through the entire company in 3 hours. We're going to take some Q&A in a bit here. But I have a lot of confidence that by the end of the decade, we're going to be the $15 billion company organically, and next 5 years, to generate $3.6 billion of free cash. We got a real good line of sight to that. But I wanted to run a video that's really why -- part of the reason Jennifer talked about the romance of Shipbuilding, this is what gets us to come in every morning and fight it out every day, is the ability to work with great people like on this video. This is coming back from sea trials on 796, just happened, very successful. Let's roll the video. [Presentation]

All right. So we're going to take a 6-minute break to set up for Q&A for anybody who needs to use the facilities, but just give us 6 minutes here. [Break]

Christie, we're ready to get going.

Great. Excellent. So yes, this is my favorite, Q&A because I can kick it to some of my staff to answer some of the questions. So I'm just going to go down the list, okay? The first one is for Jennifer Boykin and workforce. Is the growth that we're looking at in labor stable in 2027 and 2028 staffing mainly driven by the submarine workforce or is the carrier workforce at the required staffing level? So Jennifer?

Yes. Well, thank you for the question. The growth that you saw on the one chart really represents growth for the programs that I talked about are going to be coming into the portfolio. So it's not just Virginia-class submarines and Columbia-class submarines, but also the inactivation of the aircraft carriers. And then we really model the manning for the core programs based on the timing that's in the Shipbuilding plan. So the growth is really across the portfolio.

Thanks, Jennifer. Second is, there's been some chatter in Congress -- moved it too fast.

Can we move it back down, please?

Okay. So there's been some chatter in Congress about the commercial shipbuilding. And so we know a lot about commercial shipbuilding. We've done it before. And it would be a significant investment for the nation to get back in the commercial shipbuilding involving probably some pretty significant subsidies. I think probably the most important part of that is not for the major primes. I think the most important part for the supply chain, if we could actually restart commercial shipbuilding in some form or fashion, it would only make the supply chain healthier. So I think there's some positives there. We have plenty of work. It's not something -- we've made some mistakes in commercial shipbuilding. Actually, in both shipyards, it's not something we'd pursue. We have plenty of work for us now. But I think the supply chain would be very interested in it because it can only make them healthier if they have more work and more stable work. What is the timing of next? For some reason, we're moving stuff around here. Can transition to more fixed-price work at Mission Tech happen organically? Or will M&A play a role? It can absolutely happen organically. We're tracking the opportunities, fixed price versus T&M versus cost-plus within our pipeline. So we're making sure that we play very close attention to the fixed price work so it can actually happen there. M&A could play a role as well, but we're going to be very disciplined in how we evaluate that. What's the timing of the next carrier block buy? And could a GAAP result in drop in revenues? Yes, I don't necessarily see it as a drop in revenues. The most -- I think everyone saw the '25 budget relative to the carrier potentially moving to 80, or excuse me, to 30. And the most important thing there is to make sure the supply chain is healthy. But let's make sure that the aircraft carrier supply chain gets started, and there's no break in production in that supply chain because if it goes cold, it's going to be really hard to start again. How is Ingalls operating system different than the Newport News? And is there opportunity to apply Ingalls system to Newport News to drive margin improvement? Well, yes, it's what -- we've been improving, both operating systems over the last 5 to 7 years, a lot of the components of the Ingalls operating system is utilized in Newport News now. And quite honestly, some of the Newport News operating system approaches that they've uncovered and have improved upon have been incorporated down at Ingalls. So it's iterative. But really, the phase management that Jennifer talked about is absolutely a product of the Ingalls operating system and the team is executing on it very well. For Kari and Jennifer, I've got this answer. How would you characterize lead times from suppliers? Are they stable? Are there parts that are better or worse versus '22 or '23? Not a lot of difference between '22 and '23 from a lead time standpoint. They're worse than they were pre-COVID, but they're stable. We understand them. That's why it's so important to make sure that we get long lead done in time and in advance to keep the supply chain healthy because we have a lot of clarity on what the lead times are now. Surprised how small, unmanned revenue is. What is your strategy? Well, I think our strategy has been pretty clear. We're going to continue to invest in unmanned. We've got some really good wins in small, pretty good backlog of units there. We expect it to continue to grow. I have in the past said that it's going to be modest, and it will start to ramp. I think we're at the beginning of that ramp now. Are you able to size what portion of the $280 billion AUKUS market will be in your direct purview? And on nuclear, a ballpark figure of dollar content in micro-AMR and SMRs. Yes, that's a lot of detail we're asking there at this point. We're just at the beginning of both of those markets. I will say that, as Eric indicated, over the next 10 years or so, the vast majority of that revenue is going to be getting Australia Sovereign Ready to be a nuclear shipbuilder. So before you're cutting any steel, a lot of that revenue happens in the next 10 years, I think it's going to be a slow ramp. Can you share more about the Virginia mix that is consistent with a 9% to 10% Shipbuilding margin target? When will Block IV be gone from the sales mix? Is the margin target consistent with a significant contribution from Block V? How much of the mix needs to come from Block VI to get to this target? That's a lot of details we don't necessarily provide or ordinarily provide. We don't give margin rates by program. Block IV, we just -- we're delivering 796, 798 will be end of this year and then 800 after that. So Block IV will be done. Block V is the majority of the revenue right now. I firmly believe that there's more opportunity in Block V from a margin standpoint. We need to go get it, but there's more opportunity there. And then when Block VI comes along, it's really going to transition. How much risk do you take on to shift the MT mix towards fixed price work? And how do you make sure that it doesn't cause problems? Yes. So we're not talking about fixed-price development work here. This is not significant development where you're taking on material manufacturing risk and development risk from an engineering standpoint. These are opportunities because of the nature of the work, you're able to fix price it because you have a lot of certainty in what the price is going to be. So I don't necessarily think of it as bringing on additional or significantly additional risk in the portfolio. DOD Shipbuilding outlays have matched your Shipbuilding organic growth for the last 5 years. The DOD's next 5-year outlay growth is 10% to 11% versus your 4% target. If the DOD estimate played out, would your growth rate undergrow the market that much? Yes, it's a really good question. No. I mean that's a little bit too much to ask for. I do believe there's upside if we can hire, meet our staffing needs and make progress. So it's a good question. We're fairly conservative in how we develop our outlook. So there's probably some upside there. You had a slide that talked about Ingalls margin expansion, but I've always thought the margin story with Newport News. Ingalls has been the 10% to 11% range for the last 5 years. That's true, but it's something you have to work on every day. Ingalls is focused on execution and efficiency every day, and they need to because shipbuilding is a challenge. And they've done so well because they've been focused on execution. They're going to continue to do that. Is your work on the second Columbia boat cost-plus or fixed price? It's cost plus. And is Columbia growth accretive or dilutive to Newport News margins over the next few years? We don't -- unfortunately, we don't provide margin rates by program. Can you provide color on what causes the 18-month delay on CVN 80 because prior commentary was for a 12-month delay? Also did the incremental delay caused the pushout of CVN 82 and 83 in the Navy's budget docks. Yes. So the CVN 80 schedule, it's really a Navy schedule. And the J-Books are a representation of the Navy schedule to Congress. So any public commentary relative to the schedule, I think, makes sense to recur to the Navy. I will say that we're very conservative in how we book margins and evaluating the risk and opportunity registers on the ships. So it's not a financial issue. If you had milestones move out of '23 year-end into '24, will the Shipbuilding margins be more even through '24? Tom, do you want to have that one?

Yes. So -- sure. We did have 3 milestones that kind of moved out from Q4 to Q1. So it's a function of the move, how long does it take for us to complete those milestones. We guided at the beginning of 2024 that it was going to be on the lower half -- the first half of the year is lower than the second half. And for Q1, we said for ship to be about 7%. The guide included that in the milestones right there. So it's in the mix. I'll tell you not one or a couple of milestones is going to move a quarter or half a year like that. And again, it's just a function of how much cost do we spend to close out the milestone into the next quarter. So I don't see it being a significant contributor, and it was baked into the guide that we gave you for Q1.

What does AUKUS Nuclear total revenue annually once both at run rate? Yes, we don't have line of sight or comfortable providing that sort of visibility right now. We do think it's material in nature and we think there's opportunity there. And once we get closer to it, we'll be able to provide it.

Right. But it's above the guide that we've given you so far.

Yes, it's definitely upside.

Yes.

Thanks. On Virginia-class, how is performance of profitability in Block V compared to Block IV? Again, we don't provide profitability by Block, and I do continue to believe that Block V, there's a lot of opportunity. Can you provide any more color on what types of things you're doing to reduce labor attrition amongst the craft workforce at Newport News? Jennifer are you still out in the ballot.

Yes. So I'll give you a couple of examples. 7 or 8 years ago, we would put up a, "We're Hiring" sign, and that was pretty much all we needed to do, and those days are over. So part of it is, again, going to where the labor is and helping individuals understand maybe what's the best path for them as opposed to, "Hey, I want to be a welder, I'm going to come in" and finding out later that you really don't have the skills to be a welder. We work with individuals on onboarding to get them in the right path, so they end up in a craft that they can stay with. The second part I would tell you is this has to do with that leadership development component of the operating system. We've had to really work with the first line and second line supervisors to get them to understand that everybody coming in, even on day 1, they want to know what they're going to do next. They want to understand how they're going to learn. They want to understand what their development plan is. And so we've formalized the touch points at 30, 60, 90 days to talk specifically about that. And then finally, I would just tell you that we're working with them on kind of what it means to show up at work 5 days a week for 40 hours and giving more kind of personal coaching to make sure that they really understand the expectations, and that is making a difference.

Thanks, Jennifer. So one last one. There was a question on nuclear revenue within Mission Technologies. I hope everyone knows that a lot of those are not consolidated. So it does provide meaningful EBITDA performance within Mission Technologies because they're performed through joint ventures in the DoE space. So I think that's it we have time for, Christie. Please call us with -- we didn't get to all the questions, I apologize. Call us, call Christie, she can facilitate getting answers to the question. I want to thank you all for coming today. It's been great for us. It's exciting for us. I really appreciate it. So have a good day.