Branch. He is going to deliver his presentation, roll out the navys budget and then well go over some ground rules and take some questions. Good afternoon. As he mentioned im brian lute luther and i want to thank you ft. Opportunity to brief the fiscal year 2018 president budget submission in which i will address our portion of the second step of the department of defenses multiyear effort to restore readiness. The brief will be broken into four parts. The first will briefly review the current and evolving strategic guidance. The second, provides the operational context in which the naval forces operate in todays world. The third ill review historical challenges that underlie the requirement for the current readiness reset. And finally,ly provide a summary by appropriation group. The National Level guidance that provided us the mission sets which drove the operations of the last decade are under review. Earlier this month the department of defense began a defense Strategic Review. This brief will not provide fit up or procurement quantities due to the on going review and possible change to mission sets in fore sizing constructs. The cooperative strategy for 21st century c power informs naval force employment across the listed Naval Missions to balance readiness against current fiscal challenges in a Global Security environment that is volatile, unstable and increasingly competitive. Senior leaders from the secretary of Defense Service secretaries and chiefs to Service Resource sponsors and Program Managers have briefed and testified to the growing challenges and sense of urgency to respond to the advanced capabilities increasing pace of development demonstrated by potential adversaries. Despite fiscal challenges the global employment of naval forces remains extensive. Over 100,000 sailers and marines are forward based or deployed around the world and op rited across the baltic, black, mediterranean and red and arabian seas, the atlantic, indian and Pacific Oceans and on the ground in 37 countries. A few examples are participation in harnt resolve to include the dwight d. Eisenhower and george g. W. Bush. The uss ross around barrier responding to syrias use of chemical weapons. Amphibious ready groups for the 11 and 24th marine units deploying a short to provide support in northern syria. Marines from the second Marine Expedition Force assisting afghan partners. U. S. Which embarked coast guard Law Enforcement detachments seizing over 5,000 kilograms of contraband. The unss spearhead conducting Civil Military operations in gaud mall la, honduras and columbia. 100 marines in the air Ground Task ForceSouthern Command uss and elements of the 24th again provided humanitarian assistance and Disaster Relief to the people of haiti after hurricane matthew. Sailer and marines participate in the baltic sea region. On the other side of the world the Largest International marry thyme exercise brought together 26 nations including china along with 40 ships and submarines over 200 aircraft and 25,000 personnel. A u. S. Led Naval Training maneuver near the gulf of guinea navys pr five african countries tracked the hijacked tankers through their waters and successfully freed the vessel and rescued the hostages. Horn of africa, u. S. Naval forces command, operates the United States sole Forward Operating base on that continent. Earlier this year, the marine corp. s relocated their first operational squad ran of f 35 bs and increased the capability combat element in australia with four overall, the navy remains deeply engaged operating at a high tempo in harms way providing options for national leadership, assuring allies and deterring adversaries. There is no expectation that demands will slow down based on the last 15 years pursuant on this slide. Which shows deployment lengths have been increasing as the fleet has been decreasing 40 . The chart shows fleet size in gray starting in 1993, annual deployments in blue and deployment lengths shown by the green line. The department of navy deployed a growing percentage of the fleet by increasing the average length of deployments. The optic is clear, a smaller force, more heavily used will burn out faster. The recent oversubscription of naval forces that accelerated the ageing of our ships and aircraft, carolina esed may want innocence requirements and compressed training and maintenance schedules is shown in more detail here. This shows the last four years of sea based deployments. The red line depicts the maximum number of deployable ships the department of navy can provide. Known as the optimize fleet response plan. Services as force providers must balance the needs of generating the current and future force requirements with available funding. The blue area represents the actual number of deployed shifts by month. The box in the upper right is the oversubscription for that year. Is worth noting that the average use of last four years is 5 more than the funding provided could generate. The oversubscription of deployed forces combined with bca reductions exacerbates the production of nondeploying forces and readiness enabling accounts. An ill lusteetive example is Aviation Spares. This slide represents funding in associated full Mission Capable rate for the last 17 years. First, high sustained operating tempos require sustained levels of higher funding. Second, readiness trance lag fundings both ways. Third, its difficult to maintain fmcm multiaircraft its harder when the force is heavily used and harder still when the force is ageing. In all too often a bill payer is key to maintaining capabilities. The funding profiles on this slide are familiar. The black line is the 2012 budget. The last Time Strategy and budget were aligned. The red is the funding by bca and the maroon is the enacted budgets. Every one of which was delayed by a continuing resolution. Is worth noting that the final enacted budget for the first two years of bca were below bca and that the fy 17 budget when submitted last year was 3. 9 below the president s budget of 2016. This forced the department to make hard choices to balance during which only three areas were exempted. Deployed and next to deploy forces, personnel, and shipbuilding. Shipbuilding being the least reversible of our mitigations. The take away, however s not the dollars, although important. The take aways are what the profiles represent. A strategy funding mismatch budget instability combined with consistent and lengthy crs most importantly the squandering of a Precious Resource of time. Time that should be spent maintaining our tactical advantages. Every year we operate under the mismatch and cr we pay a price in time, decrease productivity and reduce purchasing power beyond showing reduction in funding the area between the black and maroon lines by year represents the decline in training of nondeployed sailers and marines a decline in material conditions of ships of aircraft of ground equipment and shore facilities and the total area between the lines represents the urgency with which we should address this short fall. Reversing this trend and rebuilding the readiness of the current force was the guidance from secretary of defense mat tis. His budget direction was clear improve war fighting readiness which was addressed and enacted in fy 17 bill. Restore Program Balance by continuing to rebuild readiness and filling holes in this submit. And finally after the defense Strategic Review is complete and during the next president s budget submission, build, capacity and improve lethality. Additional guidance from the secretary was to gain full value from every taxpayer dollar spent on defense thereby earning the trust of congress and the American People. To undergo an audit in fy 18 the marine corp. Will be under full financial audit this year. 2018 president s base increased 12. 3 billion from 159 to 171. 5 billion in this submit. Operations and maintenance increase to 54. 6 military personnel increased 2 billion to 47. 6 billion. Procurement accounts increased 800 million to 49. 5, research and development 500 million to 17. 6 billion and infrastructure increased 370 million to 2. 2 billion total. The next section of slides will provide a detailed overview of how the department addressed by appropriation requirements to enhance readiness to increase personnel increases how the ships aircraft and ground vehicles will be sustained, the proper training or personnel preparation for their deployments and how we maintained our ship procurement profiles made difficult tradeoffs in aviation and enhance weapons procurement and made investments in key technologies to better posture us. These important to note, however the effects of multiple years of insufficient resources can not be corrected by the increase of one budget year. The department will require stable, predictable funding over multiple years to achieve sustained positive results. The ship Maintenance Fund 100 using base and oco funds and funds ten additional ship availabilities for total of 71. Complies with current 246 law by end of fy 16 and six krudsers. This will also fund an additional induction. Infunds lsd midlife modernization and increases planning, engineering and man power to align the work force to the projected workload and modern i. T. Infrastructure at a rate above benchmarks to improve work force performance. We continue to lempl the skill sets and capacity of industry to augment our efforts. And for the future we work to continue a backlog of deferred maintenance currently stands at 3. 5 billion. The ship operations growth from fy 17 to 18 is comprised of increases from 13 new warships in the inventory as well as increase of two ships msc fleet. Fuel prices leads to minor growth in this program. Using base oco, ship operations funds as with the 17 request, 58 days deployed and 24 under way when not deployed. In this submit, aircraft depot maintenance is funded to capacity, 89 of the requirement. This is increase from last year where we funded air maintenance to 85 . Capacity is limited to Different Reasons at our fleet Readiness Centers. Some are limited by the hiring of civilian personnel. Other by ageing tools and materials. In all cases, we are investing to correct these limitations. The flying hour Program FundsFlight Operations for naval fleet squad rans and air training. It is funded to the maximum executable level. The growth is driven by increased costs per hour, primarily for repair parts to return nonmission aircraft to service. The unavailable aircraft are primarily legacy hornets with some mv some mv22s and ch53s, echoes included. In the past we were underresourced to fund flying hours. This out of balance funding contributed to ready basic aircraft gaps. Executing the training and political flight hours requires more than just flying and depot Maintenance Funding. It requires Aviation Logistics, aviation support, and funded in apn Aviation Spares. The Aviation Logistics support was increased 6 to a high of 87 of the requirement. These logistic requirements are funded at an alltime high and we anticipate future growth as more f35s end the fleet. Aviation support, primarily Program Related engineering and logistics, was funded higher in 17 but not to 100 . This account also funds critical chain initiatives to increase hiring of planning, engineering, and Maintenance Support manpower to align the workforce to the projected work flow. Aviation spares is funded to the highest level in years, at 91 . For the marine corps, theyll maintain the equipment they have and prioritize investments in key programs. The Marine Corps Force 2025 will provide a rapidly deployable scaleable force, able to succeed across the full spectrum of conflict. The marine corps is nearing reset from the centcom area of responsibility. Funding remains at 79 which is executable at the depot and is consistent with previous funding levels. Funding for operating forces is indicative of our operating concept. It includes increased investments in net centric Information Technology services, operations and maintenance for six additional ground air task radars or gator. The marine corpss next generation radar. Spares for small unmanned aerial systems. And network on the moves, systems bought in the last two fiscal years and supports 35 systems being procured in fy 18 as we bring this critical capability to our deployed forces. The Navy Marine Corps installations provide physical environments essential for the individual unit and total force training, material sustainment, unit recovery and equipment reconstitution. The submit funds facility sustainment at 78 for the navy and 74 for the marine corps. While these levels are roughly 17 higher than 17, theyre down 84 for navy and 87 for marine corps funded in fy 16. The funding will be prioritized to preserve critical facility performance and perform maintenance that affects the health and safety of sailors, marines and their families. However we continue to carry risk in facility sustainment and will need to closely monitor the condition of our facilities. This submit exceeds the 6 legislative requirement, 10 is provided across the shipyards and 8. 7 for need Readiness Center and marine depots. As always, our ability to successfully complete our mission rests on the navy and marine corps team. Sailors and marine, active duties and reserves, our civilian teammates and all our families. Retaining the force for the navy is continuing support sailor 2025 program, which is composed of supporting modern teaching initiatives focused on providing the right training at the right time, and increased sailor readiness. Shareholder submit funds a pay raise of 2. 1 in line with the enacted pay raise in 17. Both services align and strength and force structure for the active navy force the net increases an additional 4,000 billets to fund 327,900. This increase is due in part to cruiser modification, lcs blue and gold crew concept, the joint Strike Fighter operational requirements, support to increase marine corps and strength, for example core men and chaplains, expeditionary stage base 4. Reductions occurred in the major headquarters activity billets and recruiters following consolidation of Regional Headquarters recruiting districts. Lastly, for the active component, this request increases funding for the Navy Permanent change of station to begin recouping navy risk in funding constraints and unwritten orders for sailors. The navy reserve shows a modest increase as we complete a period planned growth in progress forever the last six years. The growth areas are cyber, unmanned, and Shipyard Surge maintenance. Additionally, our Navy Operational support centers with security personnel to protect our sailors against threats. For the marine corps, the marine corps is the nations Crisis Response force which provides the nation with the ability to provide to unexpected creasies from humanitarian systems and Disaster Relief efforts to major great operations. The summit funds 185,000 marines in a reserve strength of 38,500. The end strength provides overall dwell ratios of one to two for active forces against the sustained goal of one to three and one to four for reserve forces. A yearlong review which focuses on the changes necessary to successfully operate in the increasingly complex environment and it billion a balanced mag tap. It includes the establishment of a group to increase Defense Cyber operations and communications, increased reorganized aviation intelligence support and its intelligence battalions, new Infantry Battalion to size and increase fires through high mars rocket utility battalion. The budget funds the civilian workforce with regard to restoring readiness. To accomplish this, the departments fulltime equivalent increased at shipyards to meet scheduled maintenance and to reduce the backlogs that have accumulated over the last decade. Overall the Navy Working Capital fund fte increased for engineering for support for an expanding profile of airframes, for s. T. E. M. Personnel, for nav subpersonnel needed for weapons support, for cyber support, to handle aviation maintenance backlogs. It also funds an additional 226 civilian guards to protect department of navy installations. The Department Remains committed to complying with the mha and the budget reflects a decrease of 310 fte for headquarters. Overall the civilian personnel numbers highlighted here reflect the essential role in our civilian personnel play in our missions success. The department appreciates the continued strong support of congress. Changes in this budget from the president s fy 17 plan reflect congressional action which added an lcs and an lpd. New construction totals remain the same in the submit submitted last year. Other construction totals reflect key shipbuilding efforts in this submit are, the columbia class program. It continues with its second year of advanced procurement funding