That the air force is pursuing today for the next generation of longrange strike. I think that is a really Important Program for our country, and certainly a program that we as a company intend to support fully. Is that it be three . You can call it a b three, but there is a next step. It is a competitive environment. So, a lot of the programs are ones you cant talk about. That is true. So what can you talk about . [laughter] can you tell us about any great products you have that are spying on other people . Is anything you can tell us that we can learn that we dont know about . We wont tell anybody. Critics not really. I can tell you some of the things were most proud of. We are very proud of our Unmanned Systems capability. We just won the collier award for the we demonstrated last year. We landed in Unmanned Aircraft on the deck of an Aircraft Carrier, which was quite an accomplishment there you can see it on youtube. If you havent seen it before, you can see how this aircraft landed very precisely and accurately on the deck of an Aircraft Carrier. Of course, it is able to take off the deck of the Aircraft Carrier as well. It is an example of a class of tech dodgy that is in its infancy. It is had an opportunity to grow to radically. President bush landed on an aircraft once. Was your landing better . We didnt miss the wire. [laughter] you dont like the word drone. Many of your unmanned things can be called drones. Why do not like to use that word . We think is a poor reflection of the class of technology that really goes into making these systems work. Our Unmanned Systems are truly robotic. It is not simply a remotely piloted vehicle where there is someone sitting on the ground with a joystick actually flying the aircraft. Our aircraft by themselves. The class of technology that is rangeir embodies a full of both Aerodynamic Technology as well as the Computer Science and Autonomy Technology that goes into making something truly robotic. Today, we have a lot of troops are coming home and presumably they dont want to be redeployed. We are probably shrinking the number of men and women in our armed forces or do think that is a danger . Can reduce or make things with electronics that we dont need as many men and women that we have had in combat troops . If you look at the National Security strategy, i see it as having to fundamental underpinnings. First and foremost, we have the best trained servicemen and women around the world, that is the core of the underpinning of our National Security strategy. Secondly, we equip those men and women are the very best technology. Our strategy fundamentally relies on technological superiority. I look at what were doing with unmanned and some of the other things that are going on in the tech lg arena as a way of supporting our servicemen and women. Your question about structure. Naturally, after we have been involved in conflicts, we have to take theforestructure down. The evolutionist technology as a complete rotation for people in any sense. Theyre costly has to be the right mix and balance of human talent and technology for us to execute our strategy. Today, the equipment that you design and your competitor designed is pretty complicated. It is not like a videogame. Are the people that come into the military, are they able to operate these things as efficiently as designed . It is interesting. Natives among us, though xander folks that are constantly coming into industry and the military, i would never undermine underestimate their ability to deal with technology. It is phenomenal what can be done. In fact, we observed this collectively as a nation as we deployed many young people in the theater over these last number of years. They invented what to do with many of these technologies in theater. They came up with new ideas. Our servicemen and women actually using these technologies that have been provided to them use them in different ways that had not been thought of as they were being developed. Im constantly impressed with what our servicemen and women can do. Your background and what your company does involve something that might he called spy satellites heard some people might not call it that, but lets say it is called spy satellites. Are you surprised that with all the spy satellites around the world, they cant find the Malaysian Airlines . That surprise you . Like most things, you have to be looking at what you want to observe when you need to observe say thatld certainly this has turned out to be a very challenging problem from a Technology Perspective. All of us have seen google earth. You can look at your house or something. Do theysatellites have better resolution than google or not . You have to ask other folks about that one. [laughter] you are working your way up the company. Did you expect to be in the Aerospace Defense industry when youre at m. I. T. . I always had my eye on the space industry. I have really been a part of that and my mind set thinking since i was very young. Be an engineer in the space industry. You want to be an astronaut . I think we all wanted to at some point in our lives . [laughter] the tank, the food that they served so you rise up meteor likely in the company and then of 2010,e on january 1 the ceo. On the first day, he you said youre moving the headquarters from los angeles to washington. With was that a surprise to people . With the have given you the job they had known . Im sure there wouldve been a number of folks who wouldve thought twice about that. We had great support within her company. Certainly our board and our employees have been supportive. The transition here to washington has gone extraordinarily well. Reason for it was obvious. We need to be closer to our Customer Community. Eating in california was great in terms of the legacy of the company. We have a large footprint in california. We have a huge Capital Infrastructure in california, but we needed our senior team to be closer to our Customer Community. That has worked out very well. Do you spend one or two days a week meeting with the pentagon people, talking about why your products are good . More broadly, our Leadership Team spends a lot of time in the pentagon, spends a lot of time in the offices of the other parts of the National Security community, as well as in the parts of the federal government. It is a team effort when it comes to National Security. We need to be actively engaged across the board. Talk about cyber warfare for a moment. I believe the community has something to do with it, but you cant say. You think we are winning the cyber warfare game . Or are the chinese are others ahead of us . How you rate us compared to other countries . Cornerstone the technologies of our company. It is something we have been involved in long before the term Cyber Security became a popular term. , of course, came about through our work with the federal government and the need to protect the networks of the federal government. I am very concerned about this particular area. Area where, when you look around the globe, the status of the threat profile is pretty advanced. I wont name countries or go into the fine details of that, but it is asymmetric. It takes a fairly small investment on the part of an adversary to put at risk large investments that we have as a country. So we have to be very vigilant about this. I am pleased to see that even in this years president Budget Proposal to congress that theres a large investment on the National Security side for Cyber Defense and cyber protection. My biggest concern as we look forward is that we really arent yet to a place where we are thinking about a Broader Society the broader impacts of cyber. We must step up to do with that level of issue and threat. There are some constraints out there that are Holding Businesses back in many respects. And of it is knowledge communication. Another aspect of it is legislation. One of the things that i think is in front of us as a country is to get over this hurdle on legislation so that we can do the things we need to do to be more if in securing Cyber Infrastructure of this country. There were reports that our government was able to tap into the computers of google or facebook or microsoft, was that a surprise to you . Whatwouldnt comment on may or may not be happening with respect to other companies. With theimply say that world being so networked together, that our countrys ability to have a presence in cyberspace and do the things we need to do for the longterm security of our nation and our allies is really important. So, as a ceo of your company, presuming people want to see what is on your computer, how do you make sure that your mobile device and your computer you might use at home is not going to be invaded by some foreign country . What you do . We all spend a fair amount of time and energy on our companies Cyber Security. We have made large investments in that arena. We know that that is constantly changing. The threat environment that were dealing with is possibly changing. It is a constant battle. Just as it is for the department of defense and most of the federal agencies. Amos of special way of doing this. Is there anything you can tell us we can join our computers is comparable . Change your password often. [laughter] today, there are five very large Aerospace Defense companies in the United States, you might say. Over the last couple of years, the pentagon is not encouraged anybody to make acquisitions of each other. They want to have what we have now, but there were many more Defense Companies in previous years. Do you think as a result of the defense cutbacks were likely to see, there will be more consolidation among the large Defense Companies in the pentagon should allow that to happen . Primes that out there were built through. Argescale m a it really was a necessity that we go through that really over the course of the 1990s and early part of the last decade. There simply was not the level of budget to support the Industrial Infrastructure that existed at that time third so consolidation was genuinely in to enable our industry collectively to do the testings , to scale theo infrastructure so we could more efficiently and effectively support our Customer Community. During that time, the Customer Community was very supportive of it. Those things would not have happened without customer support. I would say over the last decade the Customer Community has been more focused on ensuring competition. That is dominated a lot of the thinking. As we go forward is difficult to speculate what world events or other things might shape the thinking and whether that might change. I would say today the focus is on ensuring competition. One time your company was going to merge with lockheed martin. Yes, many years ago. Do think that should be allowed in the future . I wouldnt speculate. I dont see anything like that on the nearterm horizon. Just our company, but in our industry. The world continues to change around us. If history tells us anything, things continue to change and we all need to understand what that means and be thinking forward on it. Sometimes you divest things. You divested your ship the thing. Since it was divested it has done well on its own. Some people have criticized you for that saying why couldnt you have done it as well as it is doing now . I was amused by it. Why did you spin off your ship Holding Business . Let me say we are incredibly proud. Onebuilding business was that was a part of that aggregation that occurred in the late 90s and early part of the last decade. It started out with a lot of logic to it as to why it would make sense for a company like ours to own shipbuilding. As time went on, that logic true to not necessarily be the case. It really did not turn out that by owning ship the link that that was a convenient way for us to apply our other capabilities onto ships. In fact, oftentimes our Customer Community really wanted to separate those two things. It also became apparent over time that the Business Model and shipbuilding was different than the model were using to create value in the rest of the Northrop Grumman enterprise. It was our assessment that these two businesses would fair better separated as opposed to being together. That was the action we took on the premise that they would do well. Im absolutely delighted how this has turned out. Youre in the Aerospace Defense business. As you pointed out, the revenues coming from the customer. Have you considered getting out of that business a bit getting into the business . Other business . People love to chase growth. I think it is a mistake. A part of the learning that many of us went through in the 90s was that it is actually difficult for Defense Companies to suddenly paint themselves as a commercial company and try to pursue things in that direction. Regular partnering. Were we develop technologies that might make sense, finding the right partners is often a Good Business strategy, i think is more important that we stay focused, that we use the capital that we are able to generate in our business to create value through investing in ourselves it makesourse, where sense, to return cash to shareholders. Does been the approach were been using over the last couple of years. It is working well for us and were determined to keep that focus. You do have a big interest in conservation and the environment are and where did that spring from . I think it really came from growing up and enjoying the outdoors. My dad was someone who also, and still is, loves the outdoors. I have two brothers and he constantly took the three of us out and went camping and hiking and the rest of it. I hear you are a product of how you grew up. I certainly am. You have tried to make your theme or sustainable. Can you describe a year of chicken and Aerospace Defense company and made it sustainable . It is often a quizzical look that i get when i talk about environmental sustainability. Go to make weapons . Athink we all have responsibility in this regard. If we think about any of our enterprises, whether we are in the defense business or any other, i think we have a social responsibility, a longterm responsibility to think about sustainability and to do the best that we can with the resources we have at our disposal to think about what our companies are doing, both in the near and long terms. We have taken on what you might say our traditional things, but actually very important things. We have worked hard on a Greenhouse Gas emissions. We set a goal about five years 25 of our out emission intensity. We actually achieved that in three years aided our team really rallied around this and focused on her and we are working hard on reducing our and working hard on reducing our water utilization. I will tell you one of the things that to me has been the most satisfying is not getting other organizations to say hey isnt that great, Northrup Grumman is doing something good, what is been most satisfying has been to see how our employees have rallied around getting this done. It is unleashed and energy and a pride in our company that i, quite honestly, thought might be there but did not expected at the level i have seen it. Our ability to make progress is that as rapidly as we have has pleased me. If the president called you and said youve done a great job running the aerospace and defense company, why dont you come and be the secretary of defense . Would you do that . To have a great burning desire to go into government . I guess not if you havent done it yet, but would you ever consider being secretary of defense . 100 focus on doing what im doing today. I feel that im actually able to make a difference for our country. Working with the team that i work with and working with the community that i work with, i admire folks to step up and take on Public Service. I always is admired and i appreciate when people do it. Everyone gets to a certain place in life where they think about those things differently. I will tell you i am completely focused on running our company. Supposes are called you up and said i have a problem in the. Kraine you have any products or services i could use . What would be your advice to the president about the ukraine . Gavin advice for him . I would stay out of providing any device on that front. I would say is important for our National Security capabilities to be capable of supporting the president at all times in everything were are doing. I am very worried that the vector we are on from a budgetary perspective is one that will undermine the president s ability over the long term, whoevers president at any particular point in time, you really do what needs to be done. I think we have an issue there that needs attention. Developings youre productskunk works new for the future. Are there any great things that we can see in five or 10 years that will make life better . Part of theay that excitement of the Defense Industry