Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Paul Gregory – Vice President Investor Relations

Ronald D. Sugar – Chairman & Chief Executive Officer

Wesley G. Bush – President & Chief Operating Officer

James F. Palmer – Chief Financial Officer & Corporate Vice President

Analysts

Robert Stallard – Macquarie

Cai von Rumohr – Cowen & Company

Myles Walton – Oppenheimer & Co.

Ronald Epstein – BAS-ML

Joseph Nadol – JPMorgan

Douglas Harned – Sanford C. Bernstein

Howard Rubel – Jefferies & Company

Joseph Campbell – Barclays Capital

Heidi Wood – Morgan Stanley

Sam Pearlstein – Wachovia

David Strauss – UBS

Robert Springarn – Credit Suisse

Northrop Grumman Corporation (NOC) Q1 2009 Earnings Call April 22, 2009 11:30 AM ET

Operator

Good day ladies and gentlemen, and welcome to the Northrop Grumman First Quarter Earnings Conference Call. My name is [Francis] and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s call Paul Gregory, Vice President of Investor Relations. Please proceed.

Paul Gregory

Great, thank you [Francis]. Good morning and welcome to Northrop Grumman’s first quarter 2009 conference call. We’ve provided supplemental information in the form of a PowerPoint presentation that you can access at www.northropgrumman.com. Before we start, please understand that matters discussed at today’s call constitute forward-looking statements pursuant to Safe Harbor provisions of Federal Securities Law.

Forward-looking statements involve risks and uncertainties, which are detailed in today’s press release and our SEC filings, and may cause actual company results to differ materially. During the call we’ll discuss first quarter 2009 results and 2009 EPS guidance. We will refer to non-GAAP measures, which are defined and reconciled in our earnings release and supporting materials, which are posted on our website.

On January 7th, we announced a realignment that impacts several of our businesses. The realignment is reflected in our first quarter 2009 results and we have provided a schedule in our press release that presents historical results in the new structure. On the call today, are our Chairman and CEO, Ron Sugar; our President and COO, Wes Bush; and our Chief Financial Officer, Jim Palmer.

Please go to slide three. At this time I would like to turn the call over to Ron.

Ronald D. Sugar

Thank you, Paul. Hello everyone and thanks for joining us this morning. Northrop Grumman is off to a solid start in 2009. Sales increased 8%, segment operating income is substantially higher, and GAAP EPS from continuing operations increased by 54% to $1.17 per share. For the first quarter, our pension adjusted EPS totaled $1.32 per share versus $0.64 last year. As I said on last quarter’s call, for 2009 earnings we think that pension adjusted EPS is a better measure of the operating performance of our five sectors. Therefore we will also be providing pension adjusted metrics throughout the year.

In addition to significant year-over-year improvement in shipbuilding due to last year's charge, all five of our businesses generated higher sales and operating income. The major EPS drivers were sales, operating income, and reduced share count due to our continuing share repurchases. Based on our outlook for the rest of the year, we are increasing our GAAP and pension adjusted guidance for 2009 EPS. We now expect GAAP EPS of $4.65 to $4.90 and pension adjusted EPS of $5.30 to $5.55.

Turning now to backlog, it was a solid quarter for new business awards. Following the fourth quarter record in new awards, we captured more than $7 billion in new business awards in the first quarter of this year, and we maintained a very robust backlog of $77 billion. We had many operational successes in the quarter highlighted by LHD 8, which we delivered to the Navy last Thursday meeting the milestone schedule we laid out for you last year.

We also redelivered the USS Toledo submarine and accomplished a delivery of our 400th fuselage section for the F/A-18E/F Super Hornet for the Navy. For the Army, we provided the 500th Command Post Platform shelter system. We also delivered the payload for the third Advanced Extremely High Frequency or AEHF satellite. Shortly after the end of the quarter, we reached settlement on two significant legal matters. This joint settlement ensures to capture a present value on our long-standing TSSAM claim against the United States government, and at the same time removes the risk overhang on the company from the government’s microelectronics claim. The values assigned to each claim offset each other.

Now, I would like to take a moment to comment on the new administration’s stated budget priorities for 2010 and beyond. We believe that Secretary Gates’ 2010 budget proposal represents a good starting point for this year's Congressional Budget deliberations. While we don't have clarity yet on many details, we believe that Northrop Grumman is very well aligned with the priorities that Secretary Gates outlined on April 6, and that the administration had previously articulated.

First, no major prime Northrop Grumman programs were recommended for cancellation. Just as important there will be greater emphasis on areas where Northrop Grumman has extremely strong positions. We’re well positioned to support emerging initiatives in cyber security, intelligence surveillance and reconnaissance, command, control, and communications, and in unmanned air vehicles. We also remain well positioned on F-35 and other key programs, such as the Air Force’s aerial refueling tanker.

We look forward to responding to the Air Force’s forthcoming tanker RFP, and competing again for this program. As we have said before, we believe the most capable, best-value tanker won the competition last year, and we expect to win again. Regarding shipbuilding, while there are a number of puts and takes, Secretary Gates clearly understands the need for industrial base stability. We believe the swap of the DDG-1000 and DDG-51 destroyer work is a good outcome for all parties. We look forward to finalizing the contractual details this year.

We believe the swap supports our strategy to improve shipbuilding execution by allowing us, and the Navy to capture the value of serial production of ships in economic order quantities. Bath Iron Works will now become the prime yard for all three DDG-1000s and Northrop Grumman will continue to perform significant work share on the program. We will provide the composite sucker structure; the composite hanger and the peripheral vertical launch system for all three ships. The swap also supports stable continued construction of the LPD class. We will have more detail for you on budget implications for Northrop during our upcoming Institutional Investor Conference to be held at our electronic systems facility in Baltimore on May 5th.

So, in summary we are off to a strong start. Our focus continues to be on reducing risk, improving performance and positioning for growth. And our strong financial position allows us to continue to execute our balanced cash deployment strategy.

Now, I'll turn the call over to Wes, for an additional discussion on Northrop Grumman’s operations. Wes?

Wesley G. Bush

Thanks, Ron. Good morning everyone. Overall the company is performing well. This quarter we had strong performances from information systems, aerospace, electronics and technical services, and where we continue to have program risk, primarily in ship building and information systems, management is keenly focused on retiring it.

Beginning with Information Systems on slide four, much of the heavy lifting associated with combining the former IT and the MS sectors is now complete, and Linda Mills and her team are moving out aggressively. The combination of these businesses into one market focused enterprise benefits us in many areas, particularly in cyber security. The majority of our cyber efforts are now centralized under one management umbrella, which will enhance our business capture efforts in this growing market.

Information systems had a strong quarter for both sales and margin, led by growth in the intelligence business, which was partially offset by lower state and local business. As we mentioned in our fourth quarter call, we except to see lower sales this year in state and local, as we are now approaching this market on a much more selective basis. Our state and local watch list programs continue to perform within their EACs and we’ll continue to focus a great deal of management attention on them as we move forward.

Information systems continues to have a rich opportunity set, as our capabilities in this sector align particularly well with the emerging global security needs in both cyber security and C4ISR. During the quarter we received an increase to our contract sealing for the Blue Force Tracking system. The Army increased the contract sealing from $574 million to $908 million. A validation of the positive impact this product is having on the Army’s efforts to address new irregular warfare challenges.

Moving to Aerospace Systems on slide five, we’re also very pleased with a successful standup of the aerospace system sector. The combination of our airborne and space capabilities is impressive, and it positions us well for integrated ISR activities across the aerospace continuum. Sales growth continues to be driven by unmanned platforms, restricted programs and manned platforms like the F-35. Operating income also remains strong. There were several program highlights this quarter. We delivered the third advanced EHF Military Satellite Communications payload. This delivery was ahead of schedule and it marked the third second consecutive early delivery of advanced EHF hardware and software. And I would add that we’re expecting that two more payloads will be required for this program.

Shortly after the end of the first quarter, we accomplished a successful ground systems test for the KEI program, and we also demonstrated the nation’s most powerful electric directed energy laser. On slide 6, Electronic Systems also had an outstanding quarter with double-digit sales growth and solid growth in operating income. We continue to see strong demand across the board for our products as demonstrated by this quarter’s 16% sales growth. The strong performance we’re seeing is a result of focused efforts over the past two years on sharpening our business development, by extending our products on to new platform types and moving our sensor technologies into adjacent markets.

We also continue to make good progress on watch list programs. On Block 60, in the first quarter, we completed a flight-testing of our most recent software delivery, and we’re working the updates generated during that flight-testing. We’ve one more key software delivery to complete the Electronic Warfare Capability. This team is focused on executing the closure plan and delivering a very capable weapon system. Regarding Wedgetail, ground testing has been completed and [antenna] range testing is approximately 60% complete. Formal aircraft ground testing started in the first quarter and we had our first flight test on April the 1st.

Looking at Electronic Systems overall, as the sales growth and margin rate indicate, we are performing very well. We look forward to seeing many of you at our investor conference in May, where we’ll provide a more detailed look at this business. Now, I would like to move to Shipbuilding on slide seven. We achieved our first quarter LHD 8 milestone with the completion of successful acceptance trials. And now that the ship has been delivered, our second quarter milestone is also complete.

Based on the success of the first quarter acceptance trials, we were able to recover some of the previous provision for the ship. Offsetting this were EAC adjustments on the DDG-51 program and on the LPD 22 Expeditionary Warfare Ship. The adjustments reflect cost growth due to substantial out-of-sequence work on these ships, as well as, the transfer of craft personnel from these ships over to LHD 8 and the DDG 103 prior to its first quarter delivery.

We have learned a lot of lessons over the last 15 months from the LHD 8 experience and the consolidation of the shipyards. Our Gulf Coast shipyards are most successful when we have serial, uninterrupted production. Key to success in this environment is a class build plan that has followed rigorously, so that every ship in the class is built in the same manner, with discipline, completion of planning packages to minimize out-of-sequence work, and a 100% quality inspection in critical areas such as pipe and electrical.

These are the actions that we are taking across all of the ships in process on the Gulf. The DDG swap is well aligned with these objectives and it facilitates what we are working to accomplish at the Gulf coast. We have more to do to improve our processes and results, and until we see sustained improvement and efficiencies, we plan to take an approach to the Gulf Coast fee booking rates that more fully anticipates the risk profile, particularly early in the design and build base.

Moving to slide eight, first quarter performance in our technical services sector was very strong, with double-digit growth in both sales and margin. One of the primary drivers for sales growth was higher volume for Hunter logistics, our program to operate, maintain, train, and sustain the multi-mission Hunter unmanned aerial system and to deploy Hunter support teams. So, in summary, as I said last quarter my key operating priority is superior execution across our 20,000 programs. We continue to retire risk on our key watch list programs. As this quarter demonstrates our operating performance is on a path of improvement.

And with that I will turn the call over to Jim.

James F. Palmer

Thanks Wes, and good morning ladies and gentlemen. My comments will focus on first quarter performance and our updated earnings per share guidance for 2009. As the press release mentioned we will be providing additional guidance detail at our Investor Conference on May 5th. Overall it was a good solid quarter. Our 8% sales growth is the highlight, reflecting particularly strong sales results for electronic systems, information systems, and technical services. However, the 8% growth needs to be put into a little bit of a perspective. You may recall that sales in the first quarter of 2008 were reduced by $134 million due to the shipbuilding charge, so adjusting the first quarter 2008 for that amount gives us sales growth of about 6%, which is really more representative of the trends during the quarter.

First quarter segment operating income was 9.5% compared with 5.9% last year due to the $326 million shipbuilding charge, but I should also remind you that last year's first quarter benefited from patent infringement settlements of $19 million that increased royalty income in electronic systems. Other than in shipbuilding, margin rates for all sectors were in line or better than our guidance for the year. EPS on a GAAP basis grew by 54% on a year-over-year basis, and on a pension-adjusted basis, EPS more than doubled from $0.64 to $1.32.

Turning to slide 10. First quarter 2009 cash was a use of $172 million, to compare to last year though I would adjust that use of cash for the $214 million discretionary pension pre-funding this quarter. This provides a more useful comparison of $42 million for the first quarter of 2009, versus $194 million in the first quarter of 2008. As shown on the slide, the increase in trade working capital is the biggest driver of the year-over-year change. The increase is due primarily to two factors.

First, last year’s trade working capital was reduced by the accrual for the $326 million shipbuilding charge and also by $150 million of higher level advances in aerospace and electronics than we had this year. Partially offsetting those items were billing delays experienced as we transfer to new systems. So, adjusting last year for all of these items the increase in trade working capital in last year's first quarter would have been about $725 million rather than the $450 million shown on the chart.

The second factor in the working capital growth is the timing of cash collections, principally between the fourth quarter of 2008 and the first quarter of this year. Compared to our fourth quarter 2008 plans we pulled forward approximately $200 million of collections into the fourth quarter. This is one of the reasons that that quarter’s cash from operations reached the billion-dollar mark, a remarkable accomplishment that represented about a third of the $3.2 billion of cash from operations in 2008.

So, as I analyze cash flow results for the quarter, there is nothing that particularly concerns me about those results and how they affect our cash from operations and free cash flow guidance for the year. As I said last quarter, we anticipated that cash from operations in 2009 would once again be weighted towards the second half of the year. And I would remind you that our 2009 cash flow guidance is before our discretionary pre-funding of our pension plans.

Let’s move now to earnings per share guidance on slide 11. We’re increasing our 2009 GAAP EPS guidance by $0.15 to a range of $4.65 to $4.90 from the prior guidance of $4.50 to $4.75. We’re also increasing our 2009 pension adjusted EPS guidance by the same amount to a range of $5.30 to $5.55 from the prior guidance of $5.15 to $5.40. The increase reflects our solid first quarter performance, as well as, the expected net pre-tax gain of $60 million to $70 million resulting from the settlement of the Microelectronics and TSSAM litigation.

Our 2009 guidance reflects the learning that we’re still experiencing at the Gulf Coast shipyards as reflected in our updated DACs. The uncertainty around the timing of any potential program impacts related to Secretary Gates’ 2010 budget recommendations and the continued uncertainty in the capital markets, which could impact future pension cost. During 2009 we do plan to continue our balanced cash deployment strategy as demonstrated by our first quarter share repurchases of $150 million and the discretionary pension pre-funding of $214 million.

We’ve the financial strength and flexibility to do so, and as I said I see nothing in the first quarter results that changes my outlook for Northrop Grumman’s 2009 cash flows. We have approximately $780 million remaining on our share repurchase authorization and as I indicated in last quarter’s call, we are contemplating discretionary pension pre-funding of approximately $500 million for 2009. This is over and above our required 2009 pension contributions of $126 million.

So, in summary it was a very solid quarter, one in which we continue to focus on risk reduction, performance and growth. And Paul with that I think we are ready to turn it back over for Q&A.

Paul Gregory

Okay. We are ready. So [Francis] we will begin the Q&A session.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) And our first question is from the line of Robert Stallard from Macquarie. Please proceed.

Robert Stallard – Macquarie

Good morning. Hello

Ronald D. Sugar

How are you?

Robert Stallard – Macquarie

Hi, Ron. First of all, I’d like to ask you about what Secretary Gates said the other day about insourcing? And the attempt by the administration to perhaps bring more work back in-house versus putting it with contractors. As you look to the long-term what sort of impact do you think this could have on Northrop Grumman?

Ronald D. Sugar

Well Rob, this is Ron. It’s not clear yet. What he did say was that he was looking at adding something between 10,000 and 20,000 new positions in acquisition in the government. To put that in perspective, probably 8 or 10 years ago the government had about 0.5 million acquisition folks. Over the years they reduced that to 200,000 or so. What he is talking about is adding 10,000 to 20,000 back to that 200,000. Anything that strengthens the acquisition capabilities of the defense department we see is very positive for us as well as for the government. In terms of insourcing, there is a significant amount of work that we and others do. Some of it may go back to the government and frankly there is going to be an enormous need for the kind of capabilities that industry has in addition to whatever it is done there. Don't particularly see that as a threat at this point in time, obviously we'll learn more details as the year progresses.

Robert Stallard – Macquarie

Okay, as a quick follow up, actually on the shipbuilding side, we’ve seen General Dynamics and Lockheed Martin sign up to fixed-price incentive fee contract on a couple of programs in recent months. Do you anticipate future shipbuilding programs for Northrop Grumman following a similar trend?

Ronald D. Sugar

Well Rob, we do have a fixed-price contracts on ships that are in serial production where there is maturity in the learning curve and in fact that’s often where we can make very good margins. So, I would expect that overtime with the ships that are in serial production. At the present time we don't have any contractual agreements or relationships on the [swap] destroyer work and obviously through the course of the year we are going to sit down and make sure that we work out a business arrangements here that make a great deal of sense for us, as well as, the Navy and for our shareholders. So, at this point in time it's to be determined to the form of those contracts is going to take.

Robert Stallard – Macquarie

And these contracts are actually signed up in relatively early stage of development. Do you see that as a trend to look to in the future as well?

Ronald D. Sugar

Well, obviously it's a negotiation. Our general view is that early ships are not appropriate for fixed-price development, because of the uncertainties associated with them. We think that, that doesn't usually work to the advantage of the government as well. Clearly as we go forward if we restart the DDG-51 destroyer line, that's the ship we certainly know how to build, that maybe a different situation than some of the initial work on the three new DDG 1000s.

Robert Stallard – Macquarie

Okay. Thanks very much.

Operator

Our next question comes from the line of Cai von Rumohr from Cowen & Company. Please proceed.

Cai von Rumohr – Cowen & Company

Yes, thank you. Could you give us a little more color on the reserves you took on the DDG-51 and LPD 22 in terms of the size of those and the size of the reversal? Jim Palmer

James F. Palmer

Yeah Cai. On the DDG-51 it was $38 million of P&L impact in the quarter and a similar amount on LPD 22. And then offsetting that [Myers] will get all the questions answered at the same time offsetting that was about a total of $48 million on LHD 8, $30 million from return of risk reserves, and about $18 million from price escalation adjustments.

Cai von Rumohr – Cowen & Company

Okay, terrific. And, so could you go through a little more detail why we have on DDG-51, which is a mature program, why it happens there?

Wesley G. Bush

Yeah, Cai it’s Wes, let me take that one on with you. There are several perspectives that would offer to help frame the action that you saw in the quarter on these ships. First, all of our ships on the Gulf Coast as you know are long cycle programs, it takes many years to build these ships and it takes time for improvements to show, particularly after we’ve gone through a period of substantial disruption. We are very confident that we are making the right improvements across the board in the shipped construction activities. It’s taking some time for all of those things to pull through. And if you reflect back to the first quarter of last year we took a charge in the first quarter of ’08, that reflected our view of the direct impacts on LHD 8 for the additional cost that we would incur there as a result of many of the things that we found, but it also selected at the time our expectation of impacts on the other ships in process in the Gulf. As it has turned out the impact on LHD 8 was somewhat less, but the impact on the other ships was somewhat greater. And Jim just went through with you kind of the numbers on how that looks to be balancing out. The third perspective I would offer to put some color on the numbers in the quarter is as I said in my remarks we’ve decided to reflect in our fee booking rates, a broader anticipation of the risk profile on these ships. We’ll certainly be happy overtime to increase the booking rates on those ships if we successfully mitigate [as part of you] of the risk, particularly as the ships mature over the phase of construction. But we’ve taken a view here that I think is the right approach given the lessons learned that we’ve had over the last year and a half.

Cai von Rumohr – Cowen & Company

Thank you very much.

Operator

Your next question is from the line of Myles Walton. Please proceed.

Ronald D. Sugar

Hello Myles.

James F. Palmer

Miles, we can’t hear you.

Ronald D. Sugar

Must be on mute.

Myles Walton – Oppenheimer & Co.

Apologize. Can you hear me now?

Ronald D. Sugar

Yes, we can.

Myles Walton – Oppenheimer & Co.

Great. Question for you on shipbuilding again and trying to interpret some remarks made by Secretary Young on the fixed-price, both for the 1000 and the 51. In his recent remarks he talked about a $2 billion per hull number for the 51, which seemed a little high, and so, I was trying to interpret that, is that a cost of restarting the line or is that in anticipation of adding capability to the 51? And if you are adding capability to the 51, is this really a serial production that you’d sign up to a fixed-price basis on.

Ronald D. Sugar

Well, let me take that one Myles. First of all I’m not quite sure of what Secretary Young factored into his $2 billion hull. My guess it’s not just the hull, but also the topside in the weapon system as well. There are going to be some improvements in the 51, many of those will be in the form of the topside, which we’re not directly involved with, some of them will be involved in the missiles and the communications electronics, but the fundamental hull will probably be the same. One of the plans that we’ve discussed with the Navy is that before actually constructing the next tranche of DDG 51s. We will do a careful engineering planning activity, which will be funded to get a scoring on that to make sure that we fully understand what changes are going to be made, but incremental and evolutionary changes are very different than starting a brand new first-of-class ship. So, I think as we go through the year we will see what the exact plan looks like and clearly we will enter into contract negotiations very prudently.

Myles Walton – Oppenheimer & Co.

Okay. And then with respect to the 1000, I guess the U.S. is looking to press GD into the fixed-price for their portion, but obviously your portion would be [GFE], would you anticipate that they’ll be asking you to sign up for a fixed-price as well on your topside portions.

Ronald D. Sugar

Myles at this point of time, I have no idea, obviously GDE is having its own discussions with the Navy on its piece, our piece would be separate to the Navy.

Myles Walton – Oppenheimer & Co.

Okay, okay. Fair enough, thanks.

Wesley G. Bush

Thank you Myles.

Operator

Our next question is from the line of Ron Epstein. Please proceed.

Ronald Epstein – BAS-ML

Good morning guys.

Ronald D. Sugar

Hey Ron.

Ronald Epstein – BAS-ML

Another ship question for you, kind of it’s harder. There has been some discussion that the catapult on CVN 78 having some issues, I guess the Navy has been talking about that for a while. How should we think about that? I mean if there is a delay in exit, the subcontractor on that were General Atomics, how does that impact the program and how could that impact you guys?

Ronald D. Sugar

Well Ron, first of all, that contract is being run separately by the Navy with another contractor, General Atomics. The current program of record is the EMALS, Electromagnetic catapult is baselined into the ship. We’re proceeding with that assumption, we are working with the Navy and the General Atomics to accommodate the catapult into the ship and as we see at this point in time we are going to proceed with that plan. Clearly if there is an impact on our ship we’ll consider that and discuss with the Navy what that impact would be. At this point in time we and the Navy are making every effort to go forward.

Ronald Epstein – BAS-ML

Now, 78 is cost plus ship, so if there was some sort of delay or change that would passthrough?

Ronald D. Sugar

That is correct. It’s a cost plus ship and if there are any change in scope to the ship or impact as a result of government furnished equipment that would be contractually remedied.

Ronald Epstein – BAS-ML

Okay. And then in Secretary Gates’ remarks like four weeks ago, he did mention that he wanted to review the L series of landing ships. What impact do you think that could have on your business? I mean do you think it will want to pullback the L series ships, and if so what does that mean for the Gulf Coast shipyards?

Ronald D. Sugar

Well I think in the near-term that is the next couple of years I don’t see much of any impact. I think as part of the destroyer swap, one element of it is continuing with the serial production of LPDs, is are turning out to be a wonderful class of ship for the Navy. When you talk about L series, you are thinking about all kinds of classes here, LPDs, LHDs, LHA and also some of the LMSR or potential future pre-positioning ships, which are not currently in construction. I think the real question will be how does the Navy think about its amphibious strategy going forward and what mix will it need. At this point in time, we also know that there is a strong desire to have common hull forms wherever possible. And it turns out that the LPD hull form is emerging as a very, very useful hull form not only for the [Korean] the current amphibious ship, but also for potentially other users. I will see how that all develops during the QDR process. I think the near-term impact in the next few years is not clear there is going to be any.

Ronald Epstein – BAS-ML

Okay, great. Thank you.

Ronald D. Sugar

Thank you.

Operator

Our next question is from the line of Joe Nadol with JPMorgan. Please proceed.

Joseph Nadol – JPMorgan

Thanks. Good afternoon now. I hate to do this to you, but on shipbuilding again, I actually got punted off the call before, and I’m looking at the transcript here. I missed some of these numbers live, but at least what it shows in the transcript is that the reversals, the gains were larger than the P&L negative impact from the LPD in DDG 51, is that right?

James F. Palmer

That's not correct Joe. The two negatives, DDG 51, $38 million; LPD 22, another $38 million, total of $76 million, positives LPD or LHD 8, $48 million net of $28 million negative.

Joseph Nadol – JPMorgan

Okay. Okay, so where I was going with it is. What is this? You’re going to book these ships more conservatively from hereon out. What is the implication on the guidance for the year? What’s the normalized run rate at this point?

James F. Palmer

Joe I was obviously anticipating this question, and I really going to get into details at the investor conference, but I think on ships, it is important that we talk about the view for the rest of the year. And frankly from my perspective having the chain down there focused on improving the processes, executing the plan that Wes outlined for you and achieving a 7% margin for the year that would be good performance.

Joseph Nadol – JPMorgan

Okay.

James F. Palmer

So that's what we’re fully focused on for those guys.

Joseph Nadol – JPMorgan

Okay. And then just one more longer run on the carrier. What exactly is your understanding of where Secretary Gates is looking to go with the carrier build rate? Going to ‘10, but talking about 2040 and what’s the impact over the next five, six, seven years.

Ronald D. Sugar

Well Joe obviously we’re trying to understand the details behind that. Our current read is that for the next several years there will be virtually no impact on our current plans, and that's because of the work-in-process. There has been discussion of pushing CVN 79 hard start to the right by a year from 2012 to 2013, but the fact is we're already at work on CVN 79. And there is no real magic event that occurs as a moment of funding approval, but we already are under pre-construction work now. I think that overtime we’ll see with the retirement of the enterprise, some pressure on the number of ships in the fleet, but I would point out that the retirement of the enterprise will very likely involve significant work for our shipyard as we dismantle that ship, that’s a complex ship with eight nuclear reactors. There is a lot of work to do there. And frankly a lot of additional work for the current carrier fleet on refueling and overhauls that will continue during that entire timeframe. So, as I stand back and look at the comments on carrier, I don't see in the next couple of years a significant change to our plans or workload.

Joseph Nadol – JPMorgan

In the Ohio class replacement, is that an opportunity for you?

Ronald D. Sugar

Yes, it is and we’re already working with General Dynamics our partner and the Navy on some advanced planning for that boat. That would be a helpful upside opportunity. And frankly the two submarines [Carrier] and Virginia-Class is coming along. I don't think there is anything that we heard in the Secretary's comments that would say that’s not going to happen. And I would point out that that shipbuilding program is probably about as well run as anything we've seen in the industry. Both companies are making great progress. We’re profitable and the Navy is getting good ships for lower prices.

Joseph Nadol – JPMorgan

Okay. Thanks.

Operator

Your next question is from the line of Doug Harned with Sanford Bernstein. Please proceed.

Douglas Harned – Sanford C. Bernstein

Good morning.

Ronald D. Sugar

Good morning Doug.

James F. Palmer

Hey Doug.

Douglas Harned – Sanford C. Bernstein

On ships again, in the Gulf, now that you’ve delivered the LHD 8, how was that change or has it changed your ability to deliver on the LPD 17 and the DDG 51s?

Wesley G. Bush

Hi, Doug it’s Wes. Clearly it’s a positive development. The craft resources are largely free from that intense focus we’ve had on LHD 8, but I think the important thing to pull the string on here, it’s not so much the craft resources, it’s the learning that’s occurred over the past 15 months or so, as we have dug in on LHD 8 to really understand that full set of issues not just the immediacy of the issues, but the longer-term events and decisions that led to the issues. And as we are incorporating those lessons learnt into the LPD series and the DDG series, I think we’re on the right track. We’re making some very good improvements in the way that not only we are performing the work, but the way that we are making decisions on how we perform the work. So, there are a variety of positives that come out of this. And as I said in my earlier remarks, it will take a little bit of time to see all of that manifest, but we’re convinced we’re on the right track with it.

Douglas Harned – Sanford C. Bernstein

And then separately on information technology, you mentioned that you have had a little bit of a hit on your margins due to the state and local activity. Could you talk about what that is, because if I look at it, if you’ve come down a little bit in revenue on those and you are still fine on the EAC, how are those programs going, I’m assuming San Diego, Virginia, New York, I mean how are those three playing out right now?

Ronald D. Sugar

Yeah, Doug all three are performing within their EACS, so we are satisfied with where they are now. We are watching them closely. These programs have been areas that have cost us a little bit of a ripple in the past, so they’re getting an extraordinary amount of management attention. I did note in my remarks that we are seeing the sales in state and local part of our business decline, because we are being much more selective about what we are going after in that area. Jim did you have any thoughts to add on Doug's question?

James F. Palmer

Yeah Doug, I just point out that, as you know we took some adjustments in the latter half of 2008 on some of those state and local programs. So, if you look at margin rates today, EACS are less talked about versus the first quarter. Essentially there is a lower margin coming out of those programs quarter-to-quarter than it was last year and that accounts for roughly 30 basis points or so of the margin change.

Douglas Harned – Sanford C. Bernstein

Is there a milestone here where you think you will have retired a significant amount of risk, such as the Virginia, I mean you’ve got a transition scheduled to coming up in Virginia for example.

Ronald D. Sugar

Yeah, we see a lot of that risk getting retired over the course of this year.

Douglas Harned – Sanford C. Bernstein

Okay. Okay. Thanks.

Ronald D. Sugar

Okay. Thanks Doug.

Operator

Our next question is from the line of Howard Rubel with Jefferies & Company. Please proceed.

Howard Rubel – Jefferies & Company

Thank you very much. Two things. First Jim, when you downsized from seven business units to five, could you help us understand a little bit of what kind of cost savings you got and probably Ron or Wes talk a little bit about sort of how you’ve gotten maybe some benefits in terms of just other operating synergies.

Ronald D. Sugar

Well first of all, Howard our focus was on creating business units, which were more agile in the marketplace, which allowed us to bring together capabilities to be able to more aggressively compete will be more competitive. Certainly there is a benefit of cost savings and as proceeding we haven't been terribly public about what that is, that comes along with it, but our primary focus has been marketplace competitiveness. And for example if you take a look at areas like cyber security where we had two fairly large sectors pursuing that in the market we’ve now put that together and organized the pieces, so that the predominant portion of that market area is in one business unit within the new sector run by Linda Mills. And we’re finding that there are significant benefits, synergies, and we are also seeing that we’re able to apply bidding resources more aggressively on the major pursuits which sometimes would not have been possible, we had smaller business units. So, all in all I think we’re pretty pleased with the strategic value of putting these things together.

James F. Palmer

I’d add that we clearly have cost reduction targets for each of those consolidations, they are executing on them. The primary focus though as Ron said is achieving those cost reduction objectives, to enhance our competitiveness on a go-forward basis. There will be some cost to implement those to the extent that they are employ related, but on a net-net basis we're going to be better off for all of those activities.

Howard Rubel – Jefferies & Company

It's not wrong now to think that with the 700 people or more or less that we’re looking at, it could be anywhere from $50 million to a little over $100 million of which probably keep a reasonable amount of that although some goes back to the customer.

Ronald D. Sugar

Well lot goes back to the customer and you know while we’re taking out significant number of people in terms of announced reductions of overhead folks, we’re hiring that many people and more as direct people on new contracts. So, you could also think of this Howard as stiffening up the mix of direct versus indirect labor inside the businesses as well, putting more folks on direct work and less folks on overhead in the back office.

Wesley G. Bush

Yeah, Howard, one thing I would add to your earlier. This is Wes.

Howard Rubel – Jefferies & Company

Yeah.

Wesley G. Bush

Your question on the benefits. A lot of focus gets applied to the benefits that we're getting out of our information systems business, it’s sort of an obvious view of cyber security and many of the things the two prior sectors had addressed. Sometimes we get the question about the aerospace side of it and one thing that I would address in the context of your question on benefits is the remarkable synergy that we're seeing and what I’ve described before is the aerospace continuum. You know, if you think about a global hawk vehicle, this was a highly ISR capable platform that’s operating largely autonomously for well over a day all by itself. You might think of that as a satellite unbound by Kepler. It is a set of technologies and a set of machine capabilities that has a lot of alignment with what we’ve been doing historically in our space business. And as we think about how we invest and back to your question on cost, how we think about utilizing resources that we might make available in this process of integration. We see ourselves as being able to make very good investments with the synergy in these technology areas that continue to move us ahead in the areas that Secretary Gates has identified as substantial investments going forward, ISR being chief among those. So, we see a lot of benefits both in the aerospace side and in the information system side resulting from this consolidation.

Howard Rubel – Jefferies & Company

That’s what I was thinking. And then just while we're here, UAV, you are the leader in the Unmanned vehicle market today and if we were to make a stab at sort of what's your run rate is in this business, it's probably like a $1.25 billion to $1.5 billion a year, is that fair or am I being a little conservative?

James F. Palmer

That's a little high Howard I would think, probably closer to the billion level.

Howard Rubel – Jefferies & Company

And then the last thing and politics is always sort of intrudes its head in one fashion or another in this process and the Senators from Alabama appear to be tying to set the playing field so that there is no other choice other than Northrop to win this. I mean how do you react to this and I mean that looks like it’s a good thing, but at the same time there is a certain element of tilting the game in an inappropriate manner.

James F. Palmer

Well look Howard, I can’t comment what the Senators from Alabama may or may not be doing, I will tell you that the competition that was run was from our judgment, one of the most thorough we had ever seen in the history of the defense department acquisition. The airplane that was selected had clearly greater capability, the fuel range, cargo and it was $3 billion less for the group of airplanes that were being purchased. That was the acquisition process. There was a political intrusion to that process which stopped it, that’s life; we have to deal with that. All we can do is keep our head down, move forward. We do have the most capable airplane and we’ll play the game again when the new rules are announced.

Howard Rubel – Jefferies & Company

Yeah, I think that’s the right answer. I appreciate that. Thank you.

Operator

Our next question is from the line of Joe Campbell with Barclays Capital. Please proceed.

Joseph Campbell – Barclays Capital

Good morning.

Ronald D. Sugar

Good morning Joe.

Joseph Campbell – Barclays Capital

I have a question, not about ships, but about airplanes and bombers, I see the Secretary deferred something that the Air Force was contemplating with regard to long-range strike and you guys are the prose at this stuff. How does this change, I know it won’t have any real EPS impact, but what were the kind of ways that you saw the Air Force heading and with the change that Secretary Gates has announced, how do you see it now heading and I expect Northrop will play a role no matter what they do?

Ronald D. Sugar

Joe, a good question, I really can't offer too much more insight on the Secretary’s comments on that, but I would tell you that the most capable bomber in the fleet today is the B2. We do a very substantial amount of work when maintenance and upgrade of the current B2. My guess is that that workload is going to continue perhaps increase if there is a delay of bringing on a new fleet of bombers past 2018 or so. So, irrespective of how this goes, if there would be a new bomber program clearly Northrop has interest in tremendous experience, we build the last one, if there is none for a while Northrop Grumman is right in the middle of upgrading and making more capable the current B2.

Joseph Campbell – Barclays Capital

Right, but what about, what were you up to prior to the announcement and how did you see that the Air Force was heading and you were clearly in pursuit of it.

Ronald D. Sugar

Yeah. Joe unfortunately I don't really have much to offer to answer that question.

Joseph Campbell – Barclays Capital

Is this just a classified thing or you just don’t want to talk about it?

Ronald D. Sugar

I just don't have any information I could provide on that.

Joseph Campbell – Barclays Capital

All right.

Operator

Our next question is from the line of Heidi Wood with Morgan Stanley. Please proceed.

Heidi Wood – Morgan Stanley

Good afternoon guys.

Ronald D. Sugar

Hi Heidi.

James F. Palmer

Hi Heidi.

Heidi Wood – Morgan Stanley

Little bit more of a strategy question for you, if you don't mind; I agree with you that with your positioning of the portfolio vis-à-vis Gates’ priorities is fairly attractive. I'm wondering in addition to sort of organic opportunities whether we should anticipate that you might step-up activity on the M&A environment to fill out your position. Well maybe I’ll do it as a multipart, so that’s first question.

Ronald D. Sugar

Okay. Well, Heidi obviously as we’ve said with your balance cash deployment strategy, we are always looking at M&A. Valuations are more attractive that they’ve been in the past. Clearly if we were to do something we’d have to make strategic sense. If we see something of that sort we’ll obviously consider it. We have done a number of small acquisitions overtime and the track record over the last several years has been substantially strengthening our cyber and ISR capabilities with very valuable niche properties. Nothing of huge scale even F-6 was not that large, but each one of these things did add to the capability. So, if there are opportunities going forward, we are going to keep our eyes open. Meanwhile our track record has been pretty solid above returning cash to shareholders in the forms of dividends, repurchases, we’ve been prudently prepaying our pension plan expenses and of course we’ve kept our debt very much under control here. So, we’ll look at all of these things if there is something attractive, then it fits with our strategy, so be it. As I mentioned in my comments we do see some potential upside for the Northrop portfolio in areas involving cyber, C4ISR unmanned platforms also another area, which was not mentioned heavily, but health information technology where we’ve done some work and continue to expand our work, the department and other federal agencies will need help there. So, we see some opportunities here coming forward.

Heidi Wood – Morgan Stanley

Another area Ron that you didn’t mention, but I’m wondering about your positioning on as smart power. I wonder if I could add fullness to that? And also Gates is also on sort of a cost reform war path and there is a discussion about sort of try and move towards 85% capabilities at 60% of the cost and Global Hawk still carries a fairly hefty price tag. Do you see ourselves expanding on the UAV side more towards the lower-end or can you drive down the cost of Global Hawk to keep it attractive within this administration?

Ronald D. Sugar

Well first of all Heidi, every indication I have is that Global Hawk is an extraordinarily attractive system. All the feedback we get from the operation commanders using this system both the Air Force and the Navy folks using the demonstrators as they can’t get enough of it, they want more, and if you take a look at the plans for production and also the amount of money being put into Global Hawk versus all the other new UAV’s combined its pretty impressive. So, obviously if you think about the fact that Global Hawk block 10, block 20, block 30, now block 40 are underway at the Air Force. We were selected to win VAMS even though some would argue that it was a more expensive platform than the other two offerings. I think under cost effect that this is an extraordinarily capable asset. So, I don't have a concern about that. We certainly do have offerings in the lower end as well; the Fire Scout platform is something, which is getting tremendous interest from the Navy. We’ve demonstrated operations aboard ships at sea. The United States Army is interested in Fire Scout and of course the coast guard is seriously considering as well. So, we see a set of interesting opportunities across the space in unmanned vehicles. It is true the concept of 85% capability for substantial [less the] cost is important. In certain assets just give you tremendous value for the money. As you compare the cost of a Global Hawk with other manned aircraft trying to do this mission or even certain satellite programs, it’s a very cost-effective proposition.

Heidi Wood – Morgan Stanley

Thanks Ron. That’s helpful, and can you just finish up on the Smart Power dynamic.

Ronald D. Sugar

Well we're all for it. Whatever it turns out to be, one of the things that we have done in our technical services sector is provided specific support to state department in other programs where we’re going to be doing work with folks in country. So, wherever we can use all the elements of power that’s great and we’ll see how that translates into actual significant business opportunities for the company.

Heidi Wood – Morgan Stanley

Excellent. Thanks very much gentlemen.

James F. Palmer

Thank you Heidi.

Operator

Our next question is from the line of Sam Pearlstein with Wachovia. Please proceed.

Sam Pearlstein – Wachovia

Good afternoon.

Ronald D. Sugar

Hey Sam

James F. Palmer

Hey Sam

Sam Pearlstein – Wachovia

Question is just more philosophical is that if I look at the litigation gain of the $60 million to $70 million that you recognize, is why not accelerate some of the facility consolidations or other cost reduction efforts to offset that, so that you might be able to realize some of those savings sooner?

Ronald D. Sugar

Well, Sam let me take a first cut and then have our expert here Jim add in their idea. I think the accounting rules require that you basically take these charges as you incur them particularly when you’re doing consolidations and more personnel reductions, and a very separate thing. So, you know we see a gain coming from return of profit. We have other litigation expenses associated with that particular set of matters as well as some other litigation we see coming. We just basically show it to you as it comes.

James F. Palmer

I don’t know if I could add a whole lot more. Sam not to imply that we’re not aggressively moving after the cost consolidation, as I said both their information services and aerospace segment have targets that they are working to achieve and they are occurring at the same time, those cost would actually be reimbursable under our government contracts to the extent there are cost to implement them as Howard pointed out, any savings that we achieve there would be shared with our government customer as well, conversely the litigation settlement is not a cost or a credit in this case that is shared with our government customer. So, I really don’t, may be from a financial accounting perspective they could offset, but from a government contract perspective, they don’t.

Sam Pearlstein – Wachovia

Okay. Thank you. And then just separately I know you wanted to get into the detail at your Analyst Day, but you mentioned that if ships got to 7% that would be good performance and when you gave guidance a couple of months ago at the end of the fourth quarter it seems like it was higher. So, I’m just wondering can you talk about what some of the offset might be to still end up at the same place in terms of the earnings for the year.

James F. Palmer

It's essentially the items that we talked about the lower earnings on DDG 51s and the LPDs going forward.

Sam Pearlstein – Wachovia

No, I mean, if that only does 7% this year, not the 8% that you originally said, what's happening in the other businesses to make up some of that shortfall?

James F. Palmer

Again, we're seeing strong performance out of electronics and aerospace in particular.

Sam Pearlstein – Wachovia

Okay. Thank you.

Operator

Your next question is from the line of David Strauss with UBS. Please proceed.

David Strauss – UBS

Thanks. Just following-up I think where Sam was going. If you look, on the revenue side you did 6% or 8% whatever you want to call in terms of revenue growth. There is no change in your revenue forecast for the year, because I guess at this point it would imply flat revenues for the rest of the year.

James F. Palmer

Actually revenues would be up a little bit in each of the quarters over the first quarter and as I…

David Strauss – UBS

I guess year-over-year.

James F. Palmer

More flat on a year-over-year basis, small increases I think, but I think David what's really important is again as the new administration has come into place, the Secretary Gates comments around the 2010 budget and now that QDR obviously we have a lot of new opportunities that we've been pursuing. We've seen some delay in some of those opportunities and it's really hard to project whether or not they are going to occur yet this year or next. So, that’s really the uncertainty if you will, around the revenue forecast at this point in time and as those activities or opportunities are realized, we’ll obviously update if need be, but at this point in time I can’t really tell when actually those RFPs are going to come out and the due dates for new decisions are going to be made.

David Strauss – UBS

Okay, and Jim on FAS/CAS is that going to ramp during the course of the year, because if it just kind of stays at this level would come in I think $30 million to $40 million under what you had guided to?

James F. Palmer

Yeah, basically it’s going to be fairly constant as we go through the year and you are right we’re $10 million or $20 million, $30 million whatever under what we thought we would be as we firmed up the CAS numbers, Cost Accounting numbers after year-end.

David Strauss – UBS

Okay, and Ron. Could you update us where we are on E-2D, I mean there have been kind of some scroll around the program some stuff coming out of Washington.

Ronald D. Sugar

E-2D for those who are not familiar is the Advanced Hawkeye, it’s a Navy Carrier based airborne warning and control aircraft. It is a new aircraft development. We’ve already built a couple of aircraft, we’re testing them. The program is going extraordinarily well, the Navy is extremely satisfied with the technical progress and I will tell you the performance of the radar and the system is fabulous. There is a law involving non [Inaudible] breach and as a result a variety of factors almost of none of which were related to the performance of the program by our company, there are some accounting issues there which may push it close to that and there is some questions about what is that mean. Best I can tell this is a government process issue, our job is to keep the plane moving, keep the program going, we are doing a great job on that. We will work through it, there is no doubt in my mind of the unwavering demand for the aircraft. So, we’ll see how that plays out. New aircraft developments are not easy, I would say the E2 has gone about as well as any I’ve seen in the last 10 years.

David Strauss – UBS

Thanks guys.

Operator

Our next question is from the line of Robert Spingarn with Credit Suisse. Please proceed.

Robert Springarn – Credit Suisse

Hi guys. Good afternoon.

Ronald D. Sugar

Hey Rob.

Robert Springarn – Credit Suisse

Or good morning on the West Coast. A couple of things first of all Jim. Should we understand that the revenue guidance from before is technically suspended or withdrawn or it’s just not updated. How should we think about it?

James F. Palmer

It is not updated. Yeah.

Robert Springarn – Credit Suisse

Yeah.

James F. Palmer

Yeah, I thought what was most important is to talk about earnings per share and we’ll go through all the details in May meeting.

Robert Springarn – Credit Suisse

Okay. And then, switching more strategic back to the Secretary Gates’ discussion. I don’t Ron or Wes if these are for you. But could you talk a little about upside perhaps in the aircraft side F-35 and F-18. And also classified space which maybe making a comeback and then on the offset downside in missile defense.

Ronald D. Sugar

Okay. Well, let me take a crack at that Robert. F-35, I was just at the Joint Strike Fighter CEO conference. I think we’re pleased with the five-year plan is very consistent with what we’ve assumed and certainly our partner Lockheed has assumed as well. I see that as a very strong opportunity for the company. And as you know, we have a very substantial part of that aircraft and the electronics that are on it. F-18s, there will be continue production of F-18s and we’re in partnership there with Boeing. And we see that as positive, and as you know the F-18 program is a very strong program for Northrop. And we are very much in serious production there. That's looking good. With missile defense, it’s less clear what the puts and takes will be. Clearly there is some talk about moving the airborne laser to an RD program, but frankly that’s what we kind of expected anyway. We do see an opportunity for some upside with the Kinetic Energy Interceptor, because it is very clear to me and others that the nation does need a boost and ascent phase capability and the KEI as we move through our various test milestones is very likely the right system to fill that need and we did in fact have this last quarter some very successful test results as we move toward a test here in the next year or so. So, on the Missile Defense side I think that there could be some upside, we’ll see where that plays out. With respect to restricted space, I really can’t say a whole lot about that, except to say that our aerospace business forecast factors in all space programs and we see strength there.

Robert Spingarn – Credit Suisse

From the programs where we discussed upside, can we see a material move from ’09 to’10?

Ronald D. Sugar

I think it’s too early to say right now Robert. We don’t know yet at this point in time and we’re not really even prepared to make any overall guidance recommendations on ’10. I think I have to see how the legislative process moves forward. Keep in mind that the Secretary’s proposal was a proposal, the administration proposes the Congress dispossess as they say, and I think that there will be as the political process develops some puts and takes on his offerings we will see where all that comes out. And to Jim’s comments earlier, that’s the reason why we want to be somewhat cautious as we look through the rest of the year on revenue.

Robert Spingarn – Credit Suisse

Okay. Thanks Ron.

Ronald D. Sugar

Okay.

Wesley G. Bush

Okay, I think that’s it.

Ronald D. Sugar

Okay, let me if I could just wrap up final comments, as you can see we're off to a strong start in ’09. We continue our focus on reducing risk in this portfolio, driving performance and positioning ourselves for growth. We saw Secretary Gates’ 2010 proposal in a positive light, we think there is some good opportunities from Northrop going forward. We'll see how that all plays out in the Congress process in the next six months or so and we've a lot more to say about these and other things when we see you in Baltimore in a couple of weeks. So, thank you all for joining us and I will see you again.

Operator

Ladies and gentlemen, thank you all for your participation in today's conference call. This concludes the presentation and you may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Northrop Grumman Corporation Q1 2009 Earnings Call Transcript
This Transcript
All Transcripts