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| Statement |
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| We also see international growth being a tailwind to margin expansion because our international portfolio generally has higher margin rates |
| We saw some accelerate towards the end of the year, even beyond our own expectation beating our guide for the year |
| We feel like our balance sheet is in excellent shape |
| It continues to be a very active market and we have a tremendous amount of backlog growth that we've built over the last several years that leads to opportunity for programs to go from development to production, others to continue to ramp |
| And so, the Sentinels as well as the SDA portfolio, our propulsion business, just a tremendous amount of growth opportunity continues in space business |
| It's growing very nicely |
| We have tremendous demand in the Mission Systems portfolio |
| as we have programs that are going to progress into production over the next several years and have higher margin rates |
| And as we've generated strong early performance on those programs, now we have an opportunity to drive margin performance and cash performance over time as those programs mature |
| So strong growth continues at our company |
| and internationally as well, where there's tremendous demand |
| This has been a really strong growth engine for our company |
| So, we're really happy this year to have a very balanced outlook for sales growth across the portfolio |
| But what I would say is that our discipline around bidding has been in place, and we feel good about the backlog growth that we've seen in these recent years and that we have done that in a way that sets our teams up for success with the contract type large matches a risk-reward scenario that's fair for us and our shareholders, but also is in line with creating value for our customers |
| It's just a volume of lower margin business, but if we are getting the volume, we're quite happy to take the earnings dollars along with it |
| And so really solid labor dynamics for us to be able to hire into the company |
| In terms of our portfolio, we see good alignment to the highest priorities within the budget |
| our computing programs that we're seeing nice growth in sensors as well |
| We expect that sector, in particular, to modulate now off of this much higher starting point, but all four of our businesses are projecting solid growth as we head into 2024 |
| And you see this in our overall EAC performance, which even through the pandemic and the volatility that we face there, we're proud of the team that they've been able to hold margins better than most in the industry |
| Kathy Warden And I'll just add, the team is incredibly committed and when I talk about the team, the Air Force and the Northrop Grumman team to make sure this program continues to deliver well, and that includes cost containment so that we are able to minimize any impact to our shareholders |
| So really a broad-based set of opportunities and continued program growth profiles as programs are ramping in production |
| And the Mission Systems really continues with a steady mid-single-digit growth, and it's across a wide variety of programs, particular areas of growth in that portfolio, our communications program |
| And certainly, it's an area of focus in our space business as well, having gone through tremendous growth in the top line and in the backlog |
| And so, to your point, 7% last year was a particularly strong year |
| We feel really good about where our balance sheet stands today to point we had a bond offering in the end of January |
| They're still growing but at a slower rate and the other parts of the portfolio also growing, which means the growth rate will come out of that double-digit stratosphere that we've seen and come back into the single-digits but still a healthy growth rate for our space business |
| And right now, what we see is strong by purchase and support for the spending |
| And we're sitting now around 11% segment operating margin with an expectation that we can now start to expand that as some of the macroeconomic pressures subside, our cost efficiency kicks in, and our mix begins to shift in a favorable way |
| that further provides us optionality around the combination of shareholder returns and anything else that avails itself during that period |
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| What's the opportunity for it to get better but what's also the risk? There's a lot of concern once you take a charge on so they continue on |
| There's been a little bit of pressure on margins |
| What we are seeing as a bit of a headwind in that business, it's in our sustainment portfolio |
| As previously thought about you could hold the line, but margins, you guide to lower margins this year on higher contribution from B-21 |
| Space margins are well below where they've been in the past |
| Within space, as we've talked about, we are seeing programs that have been significant growth drivers like Sentinel, like NGI, slowing growth |
| As a matter of fact, our attrition in 2023 was the lowest we've seen since 2017 |
| So, let me start with AS because for the last couple of years, we've been talking about specific headwinds in AS, the Global Hawk and Joint STARS programs also coming to their natural conclusion |
| We do expect those demands on CapEx to come down over the next few years |
| And also, our attrition rates going back to pre-pandemic levels |
| And over the through the middle of the decade and beyond, we anticipate that to come down again and normalize with more fixed price work as some of the early cost type development moves to production |
| A lot of the brand-new work in space that has grown so rapidly over the last few years was essentially born during COVID and the macroeconomic effects that endured after |
| The DS growth, I think the number you guide to is actually relatively low |
| And then from an opportunity standpoint, space margins have been most impacted, I think, by additional cost development type work |
| David Strauss Halo that's in the space portfolio, I think you've taken a charge there |
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