And had a chano have a dialogue withim. David whats so unique out the f35 . Marillyn it is the most advanced fighter in the world. David you were recently voted the 22nd mt powerful woman in the entire world. Marillyn i get a note fromsa my brother that , well, why was oprah higher than you . Or Something Like that. Davi woman would you fix your tie, please . David well, people wouldnt recognize me if my tie was fixed, but ok. Just leave ithis way. All right. I dont consider myself a journalist. And nobody else would consider myself a journalist. I began to take on the life of being an interviewer even though i have a day job of running a private equity firm. Hoou define leadership . What is it that makes somebody tick . David since youve been the ceo, the market citalization is up hly 280 . Anot r company that you compe wi, has a female ceo as well, and their stock is up about 250 since she became [applause] the ceo. Thats phebe novakovic. Doou think that women n run Defense Companies better than men, or they can run allcompanies be . [laughter and applause] marillyn im just looking at the audience, how many women are out there clappingbut, david [cheers and applause] oh i would just say, david, its a team sport. It isnt all about me on the performance of our company but im really proud about what our team has been able to accomplish over the last 5, 6 years. Im in my sixth year as ceo, so. David so wh walk into the shareholders meetings, do they give you a standing ovation . They must be pretty pp marill had some happy shareholders, yes, but they always, you know, they always keep a bead on us to make sure that were constantly creating value, so its, what have you done for me lately . O david so, u during the transition of the prident of the United States, donald trump sent out a tweet saying that your biggest product, the f35, was too expensive. And i think you were outf the country at theime . Marillyn i was. I was in israel where we were deli their first two f35s. David so what was your reaction to the president of the United States tweeting that you were charging the u. S. Govent too much . Did you call him or did you have any warning this was coming . Marillyn well, first of all, we needed to get those aircraft delivered. D, you know, one of e most interesting things was that Prime Minister netanyahu, he was at that event. And he asked me about the fact that our new president was going to get a better price on those aircraft e and, you know, maybeould get a rebate on the ones that we were delivering, so that presented a bit of a challen. But what was important was to recognize whatresidentelect was communicating. He was trying to communicate to the american pe that he was going to be that he was going to get good deals on the equipment he purchased and that he was going to increase defense spending, but he was going to make sure that he spent the taxpayers dollar wisely, and so inally engaged, my team engaged, and had a chance to have a dialogue with him. Rs david was that the time you ever met him or had you knownim before . Marillyn no, id never known him before. But i had an oppor with him. Is was before he was president , so this was in december before he came into his role in january. So i went to marlago, i went to ump tower. I just started the dialogue, because whats important was for him to for us to be able to answer his questions, for him to understand the capabilies that that was gonna bring our men and women in uniform, how important it was, er and then what wedoing to drive the price down. David so you did give him a little discount . Marillyn we drove the price down, yes. We got the deal done, and we did it in an accelerated fashion. And he definitely had an influence on that. David now, since hes been president , Defense Budgets have gone up, and recently the budget caps have been lift even further. The Defense Budgets now higher than its ever been, i think overwhen you count everything over 700 billion annually. So is this a great time to be a Defense Company ceo . Mari yn well, let me just puit in p. Were certainly encouraged by the fact that our country is now spending more on defense. But if you just sort of look back o were playing catchup in a large way. We certainly want to maintain ouittechnological superi over our adversaries or over the potential adversaries. What its mean for industry is that we manage through that downturn, like any wellmanaged company, but we didnt invest at the level that we would have in terms of innovation because we were in a down cycle. Now with tcycle, its time for us to really bring forth the innovations and continue to spend the efforts that we have in line the priorities of our customers. David rightly or wrongly, many people in the public say, well, defense contractors are too expensive and they dont have the best image, y might say, in srcles, maybe not in circles you travel in, but some circles, people would say defense compans are not the most popular types of companies. Do yr think thats an unfimage . And why do you think that image exists in some parts of the country . Marillyn well, ill start by saying i think, unfortunately, that image is something that we see for large corporations and larg institutes in genetoday. And itething that we face and have a dialogue around of how do we communicate to the American People what large corporations and what large institutions do. An from a defense contract, whats different for us is that gs are much more transparent. You know, were no different than another fortune 500 or fortune 100 companyhehats engaged inctivities, but were investing in the mmunities where we work and live. Were spending a lot on philanthropy. Wth. I mean, you consider you mentioned our 51 billion in sales. You think l out the jobs and that that it does for the economy and what we vest in stem education, so thats important. David so to bceo of a major Defense Company youre the largest defense contractor the United States government has, right . So do you need a security clearance . And how long does it take to get one of those . [laughter] marillyn well, you know, 60,000 of our employees have security clearances, so its a very important element of our business. I personally have to have certain that i need to be briefed on, so i have the appropriate clearance associated with that. David so talk about your background. You grew up in kansas, and your father died when you were 9 years old, and you had 4 siblings. And how did your mother support 5 children . Marillyn well, it was tough, frankly. I mean, my father was with the department of tharmy. My mother was the athome mom with 5 children. And it knocked the props out of, you ow, what was a we werewe were not we were an average family, but its back a lot. I give great credit to my mother who rais 5 children on h own. And she just passed away a couple of years ago at 97, so, i mean, an incredible life that she had. [applause] david she was from alabama . Marillyn she taught us she was from alabama. But she taught us the value of a dollar. We had to learn how to economize at aery young age. Shed send us in to pay the power bill, the electric bill. She just got her kids out and said, youve got to learn how to do these things because youve got to be it tseght me to be very reliant, i would say. David well, i was told that she used to say to you, go to the g cery store. Here5. 00. And bring back 7 of groceries. Llyn yes. Thats true. Thats very true. Learn w to economize. So i learned early how to economize, yes. David ok. So you went to the university of alabama. And did you get a scholarship . You didnt have to work . Ma oh, no, i didnt have a scholarship. I worked nights. I worked what was called the graveyard shift, so to speak, from 11 00 at night to 7 00 in the morning, then i went to class from 8 00 to 1 00 or 2 00, and then id sleep, unless i had a date, and then i would go right back to work without sleeping because you can do that when youre 18 years old or 19 years old. But worked fulltime, paid my own way through school, finished in 3 1 2 years. And, you know, you do what you had to do. Ok. So after you graduated, did you say, i want to be the ceo of Lockheed Martin . Or what did you say . Marillyn no, i started looking for a job. I took a job as an economist here in washington with the bureau of labor statistics out of college. They were in the midst of redoing the Producer Price index. It was a good job for a grad student to come in. And so i actually started my career here. 4 years later, you look for the next position, and i interviewed at several companies, one which was lockheed marietta, georgia, david so have you ever run into any people from tat bureau of labor tics who, you know, you were working for in those days and now youre the ceo of Lockheed Martin . Have they ever called you for a job or anything since then . Marillyn no, but i do hear from them now and then. You ow, this era of soci media, now and then ill get an email from somebody or i m tht run into somebody local area that i worked with, that was many years ago. I mean, think about it, ive be, so that was a long time ago. David but they all say they knew you were going to be successful . They always say that. Marillyn oh, no, no. David they donynsay that . Marill no. David so when you went to marietta, georgia, you worked your way up. You had, i think, 22 different leadership positions, in you must have been maround a lot. Marillyn i was in marietta for about 13 years. 18 months ins promoted to supervisor of industrial engineering. And at about the twoyear mark, i was put on a general Management Development program. And great credit to a sponsor that he put me forward for the program. So i spent two years rotating around the company. And at the end of the two years, i was manager over all of our production estimating and budgets. David now, atoint, your husband was unemployed. And he got a Job Interview with a company. And what company was that . Marillynurprised me a bit. His company went out of business, and so he was a t looking for b. We had a 5monthold baby, so we were very much hoping hed find a job. And it was a tough labor market at the time. But he came home one day and said, ok, i got a job. Anid, where . He said, at lockheed. And i went, what . Sorry. I said, what . Why my company . You know. But it just turned out he went to work in the finance dertment. We didnt really cross paths. I was running indu engineering by that time. But its interesting. About 5 yearshe retired from lockheed after 5 years. En david so you have gim a lot of credit for what you have been able to achieve. Because you might describe after he retired, he took on a role that many peoe would say a woman might have normally taken on, or a wife, and he took on that traditional role. Ishat fair to say . Tired. Our kids were 3 and 6, two boys. We moved from marietta, georgia to fort worth, texas, because my job moved us. And so at the time you know how stressful it is have a couple of Young Children at home. I said, why dont we try you workinom home for a year . And we just never changed the model. So he became the athome dad, he was, you know, the coach, he was the scout leader, he was thewent on the field trips, we were maybe a newage family back then in the way that we worked, but itd for us, and today our kids are in their twenties, and theyre off doing their thing. But when i said he retired, yhe basically was thatr mark, he got a retirement check from Lockheed Martin not long ago. So, hehhis 5 years, right. David so i guess hes happy with the shareholder performance, as well. Marillyn yes, he is. [laughter] david now lets talk a moment about the product i mentioned earlier, theyre fighter jets. Now ive known for a long time theres an f14, f15, f18, there was f22. And then you come up with something called the f35. What happened betwee 22 and 35 . [laughter] marillyn well, the fact is that aircrt are not numbered by Lockheed Martin. The u. S. Government determines what the numr is. Soand f standing for fighter, a b for bomber, you know, thf terminology is kindneral, and usually it is sequential. We hadwe won the contract with our x35, which was the experimental you know, you name them with an x or y if they were experimental or a prototype. So we had named our offering in this competition, but when they announced the winner, lockheed was the winner, d the secretary of the air force said the f35, and we were all shocked because we thoughttht was going to bf23. So once he named it, thats what number it became. David you didnt want to tell him he made a mistake, i guess, because he just awarded the contract, but. So in the history of our country, this is the biggest defense contract ever, tens of billions of dollars, i assume. Why does it cost that much to make these planes . And what i so great about this plane . At is so unique about the f35 . Marillyn the f35a, which is your conventional variant of the aircraft, was priced at 94. 3 million, and were on a path to drive that down to 80 million by 2020. Think about that. You know, think about if you fly maybe you fly a gulfstream or Something Like that, think about what you paid for that daviasionally. Marillyn think about the most sophisticated jet fighter in the world that might cost 80 millio i mean, thats pretty remarkable in my mind. Ghit is the most advanced r in the world. So it is basically a force multiplier. Its a fabulous aircraft. I dont have to tell you that. Talk to some of the pilots that fly it. David the sr71 was avery, it went 6 times the speed of sound, or Something Like that. Marillyn 3 times, yeah. David very high. Theres a rumor in the defenspress somewhere thre making an sr72. So can y i tell us right nothat true . Marillyn you know, we are working on hypersonics. And hypersonics would be something over mach 5. Were doing work in that technology, so thats probably all i am going to say about it. Davi [applause] all right. Ok. Lets talk a moment about Artificial Intelligence. Presumably thats going to be very important for defense contractors, as it is for other companies. Marillyn well, its a vee important area that investing in. We think our customers are looking tr solutions to use thhnology. But in Artificial Intelligence, you can think abt were working on a helicopter that will be unmanned. So thats an opportunity h david an unmannicopter . Marillyn an unmanned helicopter. We have other unmanned vehicles that we have, but that autonomy and using the Artificial Intelligence for actually flying the helicopter david whats the price for the unmann . That a little bit. [laughter] all right, so unmanned helicopter, that sounds pretty novel. Marillt even in the cockpit of our aircraft, you know, theyre using artifi fal intelligence ing information in such a way that the t pilot doesnt have the human mind just cant move at the same speed as what you can get through that computing power, and so they can make the right decisions to deal with the situation. And we have such things as collision avoidance. So even on our f16s, and well be putting this on our f35, we hav technology there through are that if a pilot doesnt realize that theyre about ready to hit the ground, this aircraft will take control and avoi weve already saved 6 pilots lives with that type of technology. So thats just a few exples of how we apply the Artificial Intelligence. David now, one of your other produc is helicopters. You boughtomikorsky helicopter frnited technologies. Why did you buy it . And are they making the marine oneenwhich is the press helicopter, and how much does that cost . Marillyn you are into the prices, arent you, david . [laughter] david im always trying to get you know, im always negotiating for a good deal. Marillyn i see. Ok, all right. Well, first of all, yes, we bought sikorsky and have bing business with them for 40 years. So, when the opportunity came up, we took e opportunity to buy the company. Great integration in our company. It brings the black hawk helicopter, it brings the ch53, k helicopter for the marine corps, and, as you mentioned, the marine one. Im happy to say that that program is on schedule and on cost in producing that for the president. David but it sts a loof money to make mari one because you have got to have all kinds of security things in there. So itn not something you call to any other country, i assume. So you only ke, what is it, 23 of them youre gonnmake or Something Like that . Marillyn yes, thats right. David and when are they going to be available . Marillyn well, well be were on a path of theyllyou know, we have to go through the test flight. Ad the first flight and things like that, but it takes time for them to roll out. Think its 2019 or so that theyll. I was going to mentionheo you, it is based on s92, which is a great commercial helicopter. If youre inte in a helicopter, david, i could suggest one. I mean, i think theyre only around, you know, 3llion, 40 million. I mean, im sure you can do that. David maybe we can negotiate. Maybe if i can get a good deal. Do you get a discount if you buy two or something . [laughter] marillyn we can do a deal. Todavid whats it like the ceo of our nations largest defense contractor . T about 70 of your revenue, i think, from the u. S. Government. U know, how much of your time do you havto spend with the u. S. Government . How do you spend your time, lets say in a typical week, percentage time . Y marillyn i would somewhere between 60 to 70 of time is with strategy of the business, the customers, and engagement around the world, traveling around the world on the customer side of the business. Because it is important in my role to be out meeting with not only our congressional leaders and our government leaders to make sure were aligned with what their needs are and their priorities, but i travel a lot outside the United States. 30 of our bs is outside the United States with governments around the world. David you were recently voted the 22nd most powerful woman in the entire esrld, not just busut everything. So when you saw that, did you say, i should be higher . Or did you say, thats pretty high . I mean. And how does it feel to be the 22nd most powerful female on the entire planet of 3. 6 billion women . Mari