Todd Ernst - Vice President-Investor Relations Thomas A. Kennedy - Chairman & Chief Executive Officer Anthony F. O'Brien - Chief Financial Officer & Vice President

Carter Copeland - Barclays Capital, Inc. Seth M. Seifman - JPMorgan Securities LLC Cai von Rumohr - Cowen & Co. LLC Doug Stuart Harned - Sanford C. Bernstein & Co. LLC Jason M. Gursky - Citigroup Global Markets, Inc. (Broker) Samuel J. Pearlstein - Wells Fargo Securities LLC George D. Shapiro - Shapiro Research LLC Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker) Rob Stallard - RBC Capital Markets LLC Peter John Skibitski - Drexel Hamilton LLC Hunter K. Keay - Wolfe Research LLC

Good day ladies and gentlemen, and welcome to the Raytheon Q3 2015 Earnings Conference Call. My name is Mark, and I'll be your operator for today. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Mr. Todd Ernst, Vice President of Investor Relations. Please proceed, sir. Todd Ernst - Vice President-Investor Relations: All right, thank you, Mark. Good morning everyone. Thank you for joining us today on our third quarter conference call. The results that we announced this morning, the audio feed of this call and the slides that we'll reference are available on our website at raytheon.com. Following this morning's call, an archive of both the audio replay and a printable version of the slides will be available in the Investor Relations section of the website. With me today are Tom Kennedy, our Chairman and Chief Executive Officer and Toby O'Brien, our Chief Financial Officer. We'll start with some brief remarks by Tom and Toby, and then we'll move on to questions. Before I turn the call over to Tom, I'd like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding the company's future plans, objectives and expected performance constitute forward-looking statements. These statements are based on a wide range of assumptions that the company believes are reasonable but are subject to a range of uncertainties and risks that are summarized at the end of our earnings release and are discussed in detail in our SEC filings. With that, I'll turn the call over to Tom. Tom? Thomas A. Kennedy - Chairman & Chief Executive Officer: Thank you, Todd. Good morning everyone. A little over a year ago, we laid out a strategy to return the company to growth by evolving our approach to international markets and increasing investments in key technologies to better position the company for the future. Our strong growth during the third quarter reflects the traction that we are gaining from this strategy. In the quarter, our revenue increased by 6% driven primarily by missiles and IDS, as well as from an increased contribution from Raytheon|Websense. International revenue, which grew by 13% over last year's third quarter, rose to 32% of the company's total revenue. This is a record level for the company and was driven by customers across various regions turning to Raytheon's advanced technology to address the rapidly-evolving threats. I would also note that our growth was backed by strong cash flow generation reinforcing our strong financial foundation. Domestic revenue also increased in the quarter and was up a solid 3% driven in part by classified. Turning now to bookings. In the third quarter, international drove 26% of our total bookings. Key international awards included the second phase of the Air Defense Operations Center for Qatar, plus missiles, training and radars for a number of other international customers. Domestically, bookings included training, classified, as well as various missile programs including AIM-9X, the Joint Standoff Weapon, and SM-3. Given our year-to-date bookings strength and our expectation for a strong finish to the year, we are now raising our full-year 2015 bookings outlook to $25.5 billion, plus or minus $500 million, which translates into a book-to-bill ratio of approximately 1.1 for the year. This is $1 billion increase to the prior bookings range that we gave you last quarter, driven by strong demand from our global customers. Further, it sets the stage for solid top line growth in 2016 which Toby will talk about in a moment. In the quarter, IIS received good news on two key awards, one from the U.S. Air Force, and the other from the Department of Homeland Security. For the U.S. Air Force contract, which is often referred to as NISSC, Raytheon will be providing products and sustainment services that support NORAD and its mission to provide air, missile and space threat warnings, as well as critical command and control capabilities. NISSC has a $700 million ceiling value over five years. This competitive win was initially awarded to Raytheon in April of this year, but was protested. The protest was resolved in our favor late in the third quarter. I would add that this award follows a series of recent programs wins at IIS for high value-added services. These wins reflect our modernization through sustainment strategy. As for the Department of Homeland Security award, Raytheon was selected to be the prime contractor for the development and sustainment of the National Cyber Security Protection System, a system providing the vital infrastructure that assists more than 100 federal, civilian and government agencies with the protection of their networks against advanced cyber threats. This award has a ceiling value in excess of $1 billion over a seven year period. While this too has been protested, the customer recognized our compelling cyber strength when making the award, another strong validation of our cyber strategy and capabilities. In addition, we have been supporting our long term growth strategy by increasing investments in our business and advanced technologies. Consistent with our discussions on prior calls, IR&D is being directed to areas that we believe will be future growth markets, including directed energy and hypersonics and undersea to name just a few. Investments in these technologies will position us well for the future, as our customers look for capabilities to counter increasingly sophisticated threats that are developing on the horizon. I'd like to shift gears and take a minute to touch on our capital deployment strategy. We continue forward with a balanced approach and we are on track to achieve our $1 billion share buyback target for 2015 that we outlined back in July. After the close of the quarter, we did announce a small acquisition that fills a cyber security technology gap and enhances our position in high value managed security services, one of the fastest growing areas in the cyber security market. This is consistent with our go-forward strategy of pursuing smaller targeted bolt-on acquisitions. Before concluding, I would like to note that the Websense integration is on track. As you will recall, we are currently in the process of combining our legacy Raytheon Cyber Products business with the Websense acquisition that we completed in May. The business segment had solid margin performance in the quarter and we continue to work to integrate Raytheon Cyber Products technology into the Websense architecture. To close, I want to say how proud I am of the Raytheon team and their hard work and dedication that has allowed us to deliver growth despite sequestration and I want to thank them for their focus on performance which benefits our customers, our company and our shareholders. With that, let me turn it over to Toby. Anthony F. O'Brien - Chief Financial Officer & Vice President: Thanks, Tom. I have a few opening remarks starting with the third quarter highlights and then we'll move on to questions. During my remarks, I'll be referring to the web slides that we issued earlier this morning. If everyone would please turn to page three. We are pleased with the solid performance the team delivered in the third quarter with sales, EPS and operating cash flow all at or better than our expectations. We had solid bookings in the third quarter of $5.3 billion. Sales were $5.8 billion in the quarter, up 6% led by our IDS, missiles and Raytheon|Websense businesses. EPS from continuing operations was $1.47, which I'll give a little more color on in a few minutes. And operating cash flow of $1.1 billion was better than our prior guidance driven by the timing of collections. Third quarter 2015 operating cash flow was significantly higher than last year's third quarter primarily due to the improvement in working capital and the timing of cash taxes paid in the quarter. During the quarter, the company repurchased 2.4 million shares of common stock for $250 million, bringing the year-to-date share repurchase to 7 million shares for $750 million. Turning now to page four. Let me start by providing some detail on our third quarter results. Company bookings for the third quarter were $5.3 billion. On a year-to-date basis, bookings were $17.4 billion, an increase of approximately $425 million over the same period last year. It's worth noting that on a trailing four-quarter basis, our book-to-bill ratio was 1.06, and as Tom just mentioned, given the strength of our overall bookings year-to-date, we now expect full year 2015 bookings to be approximately $25.5 billion, plus or minus $500 million, an increase of over $1 billion from the outlook on the last call in July. This provide a solid foundation for sales growth in 2016. For the quarter, international was 26% of our total company bookings and on a year-to-date basis was 37%. For the year, we expect international to be approximately 35% of total bookings. Backlog at the end of the third quarter was $33.6 billion compared to $33.2 billion at the end of the third quarter of last year. And on a funded basis, backlog was $24.4 billion, an increase of almost $1.5 billion compared to last year's third quarter. We expect 2015 year-end total backlog to be up between 4% and 8% from year-end 2014. If you now move to page five. Sales in the third quarter of 2015 were strong primarily due to the performance at IDS and missiles. Looking now at sales by business, IDS had third quarter 2015 net sales of $1.5 billion, an increase of approximately 7% compared to the third quarter of 2014. This increase was primarily due to two recent international Patriot awards. Missiles had net sales of $1.6 billion in the third quarter 2015, an increase of approximately 11%. This increase was driven by higher sales spread across various production programs including the TOW missile program and certain missile defense programs. In the third quarter 2015, IIS had net sales of $1.4 billion, down slightly when compared with the same quarter last year. SAS had net sales of $1.4 billion. The change versus last year was driven by volume on international tactical radar programs. And for Raytheon|Websense, the increase was primarily due to the acquisition of Websense, which we completed in the second quarter of 2015. As a reminder, third quarter 2014 included the results for only Raytheon Cyber Products. Moving ahead to page six, overall the company continues perform well. Our operating margin was 12.1% for the total company and 12.3% on a business segment basis. Year-to-date operating margin was 12.9% at both the total company and business segment level. As we discussed on the last few earnings calls. Compared to 2014, our margins for 2015 have been impacted by a change in program mix as well as higher investments. We continue to invest in ourselves with the objective of positioning the company for future growth. So, looking now at the business margins. The change in margins at IDS was primarily driven by a change in program mix on international Patriot programs nearing completion, which is similar to what we've experienced in the past when we've completed certain programs and ramped up on others. We expect IDS margins to be strong in the fourth quarter driven by strong performance as well as from an expected contractual modification. The change in margins at IIS was primarily driven by a change in program mix and acquisition related cost. Missiles margins increased 40 basis points in the third quarter 2015, primarily due to a change in program mix. SAS margins were down in the quarter as expected, compared with the same period last year primarily driven by higher net program efficiencies in the third quarter of 2014. And at Raytheon|Websense, the third quarter 2015 operating margin was driven by strong operating performance as well as the timing of restructuring expenses in the quarter. We expect restructuring cost to increase in the fourth quarter, reducing margins sequentially but still on track to meet the full year 2015 margin outlook. Turning now to page seven, third quarter 2015 EPS was $1.47, better than expected driven by improved margin primarily at missiles and SAS. As you look at the EPS walk, operations is being impacted by the investments we are making in the business and program mix. These are largely offset by our reduced share count. The timing of tax related items and non-cash expenses related to the Raytheon|Websense acquisition make up the difference. On page eight, we've tightened the full range for full year 2015 net sales, increasing the high end by $100 million. We now expect net sales to be between $23 billion and $23.3 billion. As we have done in prior years, during the third quarter, we updated our actuarial estimates related to our pension plans. As a result of this update, the FAS/CAS adjustment for the year decreased by $12 million from $197 million to $185 million, or an unfavorable impact of $0.03 per share. We're reaffirming our full year 2015 EPS outlook of $6.47 to $6.62. While this outlook is unchanged from our prior guidance, I would note that we were able to absorb the impact of the unfavorable $0.03 FAS/CAS adjustment. And as a reminder, we have not included in our 2015 guidance the potential extension of the R&D tax credit. If the legislation passes, it would favorably impact the effective tax rate by about 130 basis points and our EPS by about $0.11 per share. As I mentioned earlier, we repurchased 2.4 million shares of common stock for $250 million in the quarter and now see our diluted share count to be approximately 305 million shares for 2015. Operating cash flow in the third quarter was strong primarily due to the timing of collections. We continue to see our full year 2015 operating cash flow outlook coming in between $2.5 billion to $2.7 billion. And as you can see on page nine, we've included guidance by business. We've increased and tightened the full year sales outlook at both IDS and missiles. At IDS, this is driven by the program mix and performance to date that I discussed earlier. Missiles has also experienced better than expected year to date growth. In addition, we tightened the full year sales range for IIS and SAS. Now turning to margins. We've increased the range and expect higher full year operating margin performance for missiles and SAS. The strong year to date results exceeded our prior estimates. We lowered the range of our full year operating margin guidance for IDS driven by the change in program mix and performance to date. Now turning to next year. As we have done in the past, we intend to provide detailed 2016 guidance on our fourth quarter earnings call in January. However, as we sit here today, we currently see strong sales growth for 2016 at 3% to 4% over the midpoint of our 2015 outlook driven in part by some new development awards we are expecting. We expect segment margins to be flat to up for 2016 compared to 2015 excluding the eBorders settlement in 2015, and depending upon the mix from higher volume in 2016. This positions us well going forward with further margin expansion over time as new development wins lead to production. I would also add that we currently expect FAS/CAS to improve in 2016 over 2015, which I'll talk about in a moment. In addition, we expect operating cash flow from continuing operations to be higher in 2016 versus 2015 after adjusting for the eBorder settlement. Of course, I want to caveat all this by saying our assumptions are based on a defense budget being approved in Washington before year end, thereby avoiding an extended CR or a government shutdown. So if you could please move to page 10. We have provided a FAS/CAS pension adjustment matrix for 2016 as we've done in prior years. As I just mentioned, we expect to see improvement to the FAS/CAS adjustment in 2016 compared to 2015 given the current interest rate environment and asset returns. That said, and just to be clear, the discount rate and the actual asset returns won't be known until we close out 2015. We'll provide a more detailed pension outlook on our January year-end call. Before concluding, as we have discussed on past earnings calls with regard to our capital deployment strategy, we expect to continue to generate strong free cash flow and maintain a strong balance sheet at our current credit rating going forward. We remain focused on deploying capital to create value for our shareholders and customers. This includes internal investments to support our growth plans, as well as returning capital to shareholders through share buybacks and dividends, making smaller, targeted acquisitions that fit our technology and global growth needs, and from time to time making discretionary contributions to our pension plans. And as a reminder, as we said on the second quarter earnings call in July, we increased our share buyback by $250 million from our original expectation, bringing the full year 2015 buyback to approximately $1 billion. In summary, we saw solid performance in the third quarter. Bookings were strong, our sales, EPS and operating cash flow from continuing operations were all at or above our expectations. And our strong cash flow and balance sheet will allow us to continue to drive value for our customers and our shareholders. We are well positioned for continued growth in 2016. With that, Tom and I will open up the call for questions.

Your first question comes from Carter Copeland from Barclays. Please proceed. Carter Copeland - Barclays Capital, Inc.: Good morning, Tom, Toby. Anthony F. O'Brien - Chief Financial Officer & Vice President: Good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, Carter. Carter Copeland - Barclays Capital, Inc.: I wondered if we might just kind of get a little bit more color on IDS. Obviously, it seems like the top line is quite strong. That has implications for the mix I think relative to your commentary about 2016 that you've sort of been hinting at recently. Should we think that you've got a little bit more top line with a little bit less favorable mix next year than what you were talking about before or is this sort of in line with where you were before? Anthony F. O'Brien - Chief Financial Officer & Vice President: Well look, Carter, let me talk about this year for a little minute because I think it's kind of a precursor heading into 2016. So for IDS, as I mentioned, we still expect margins in Q4 to be strong. We did however adjust our guidance. It does reflect, as you just suggested, an update in mix and our performance to date. Specifically, we are seeing more development work on programs like AMDR, and we have had some increase in our content on AWD. Combine that with the fact that we're still ramping up on some of our other large recent awards, which we've talked about in the past. They start out at lower margins. They expand their margins over time as they progress to this cycle and retire risk. So we're still seeing that mix issue impact us as we go through the balance of this year, okay. But that bodes well for the future, as those development programs move into production. And that thought is contemplated in the initial outlook that we gave you for 2016. Carter Copeland - Barclays Capital, Inc.: Yeah, so there's no material change in the performance expectation of the EACs, it's more just the mix of the work you're saying. Anthony F. O'Brien - Chief Financial Officer & Vice President: That is correct. Thomas A. Kennedy - Chairman & Chief Executive Officer: I would say it's development program driven growth that exceeded our expectations at IDS this year. And what that does lead us into opportunities in 2016, 2017 and 2018 as we transition those programs into production, on top of all of the Patriot production work that we are starting up on now, for example, Qatar program. So we have a very positive outlook for IDS. Just a reminder, both Toby and myself ran that business so we know all the levers in driving margin in the business. And we see clear signs and opportunities based on the mix that they have today moving into 2016 and 2017 and 2018. Carter Copeland - Barclays Capital, Inc.: Great. And then a quick follow up. I don't know if you can tell from a pro forma basis on the Raytheon|Websense top line, what it would have been like had you owned it or maybe break out what Raytheon Cyber Products maybe did in growth terms year over year? Do you have any color in that? Anthony F. O'Brien - Chief Financial Officer & Vice President: Well, the growth that we show obviously because we only had Cyber Products in last year's third quarter, is essentially all from the acquisition of Websense. And the way to think about it, it would have, to answer your question, it would have been flat year over year. Carter Copeland - Barclays Capital, Inc.: Okay. Great. Thanks for the color, guys. Thomas A. Kennedy - Chairman & Chief Executive Officer: Sure. Thank you.

Your next question comes from Seth Seifman from JPMorgan. Please proceed. Seth M. Seifman - JPMorgan Securities LLC: Thanks very much and good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning. Anthony F. O'Brien - Chief Financial Officer & Vice President: Good morning. Seth M. Seifman - JPMorgan Securities LLC: I wanted to ask – morning – to ask about missiles and this was sort of the second quarter in a row that you've increased the sales guidance there. And you were up I guess about 5% or 6% from where you were at the start of the year. And talk about really what's driving that. How much of it is coming from the Middle East? Kind of how sustainable that is and put some ties around that. Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, I'll start and then obviously Tom can jump in here if he wants to add some color. So to your point, missile sales were up in the third quarter from prior year, double digits around 11%, and that's sequential growth as well. We do expect the missiles sales cadence to continue to improve into Q4, really driven by volume from our production programs. And it's really not one individual program as I mentioned in my opening comments. It's across multiple production programs, TOW, and some of the standard missile family of programs as well. For the total year, we see sales growth in the mid single digits. Obviously as you said, we have updated our guidance to reflect the favorable performance year to date in our outlook for Q4. But there's not one individual program and/or country if you will that's driving that. It's just a very strong portfolio of programs that's pushing the growth up in the missiles business. Thomas A. Kennedy - Chairman & Chief Executive Officer: Can I just jump on that? I mean, you did see there was a successful SM-3 launch this past week with our European coalition partners. And so we see a significant demand signal pull for missile defense missiles relative to our European partners outside of the US itself. And then if you go across the regions, you do know that there's significant turmoil in the Eastern Europe area, so we see demand signals there, obviously in the Middle East. But we're also starting to see demand signals in the Asia-Pacific region. We saw it initially in South Korea with Patriot orders, but we were also seeing it in the areas relative to replenishing the weapons that they have. So it's not just in one region, it's essentially across the globe that we're seeing these demand signal pulls. Seth M. Seifman - JPMorgan Securities LLC: Great. And I just - Anthony F. O'Brien - Chief Financial Officer & Vice President: And I think, just Seth, another thing that reinforces that, the bookings for the quarter, AIM-9X, Paveway, JSOW, spares, et cetera, right, SM-3. It's again, it's across that portfolio that we have in our missiles business. Seth M. Seifman - JPMorgan Securities LLC: Great, okay thanks. Just as a real quick follow-up on a totally different topic, we heard a little earlier in the week about some delays from the government in executing undefinitized contract actions. Just wondering if you've seen anything similar. Thomas A. Kennedy - Chairman & Chief Executive Officer: I mean, these are – are you talking about UCAs? Anthony F. O'Brien - Chief Financial Officer & Vice President: UCAs, yeah. Seth M. Seifman - JPMorgan Securities LLC: Yeah, yeah and if those are having any impact on your platform. Thomas A. Kennedy - Chairman & Chief Executive Officer: Yeah. I'll tell you, it is an area that we track in the business. It is something that is necessary especially relative to FMS contracts to shorten the period of getting on contract and starting to work the programs. We do track and try to drive the definitization of those UCAs as soon as possible. I mean, that's something we work with directly with the Department of Defense. And I can tell you I have my, I review those on a periodic basis to make sure that they're not getting out of control. I can tell you, the department wants to definitize them as soon as possible also, but it is a lot of work. And we just got to make sure that we work hand and glove together with the government to drive those to closure as soon as possible. Seth M. Seifman - JPMorgan Securities LLC: Great, thanks. Thanks very much.

Your next question comes from Cai von Rumohr from Cowen. Please proceed. Cai von Rumohr - Cowen & Co. LLC: Yes. Thank you very much and good quarter, guys. Thomas A. Kennedy - Chairman & Chief Executive Officer: Hey, Cai. Cai von Rumohr - Cowen & Co. LLC: So your guidance on international of 35% orders kind of works out, looks like it's $2.6 billion in orders in the fourth quarter. That looks like a pretty big number. Could you give us some color on what's in there, any particular single large awards? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah. So, I'll give you at a high level, Cai. Unlike prior years, we don't have any binary $1 billion-plus type of awards whether it be international or domestic in the fourth quarter. So there is not one particular program or award that's driving it. We do have several programs in the $500 million range, plus or minus. And Tom, I don t know if you want to comment any more detail on. Thomas A. Kennedy - Chairman & Chief Executive Officer: Well, I mean there's several Patriot related awards. We're also looking at the several C5I awards also. And this is not international, but the domestic air, some air traffic work. And then we already mentioned the missile company in terms of their portfolio of missiles being in demand on the international marketplace. I do want to mention something, go back to something that Toby said about the binaries. And in the past, we've always had one of these big $1 billion or multi-billion dollar binaries we were waiting on. One of the elements of our international strategy was to not just have one but to have three or four binaries, so that we were never relying on any given one. And that's actually the position, the great position we're in today. We don't just have one order we're waiting for to be able to achieve several billion dollars worth of international bookings. And it's kind of a different – it's a totally different feel here. It's a great feel, by the way, that we don't have to hang our hat on one big binary in any quarter. But the bottom line is the international strategy we put in place is paying off relative to that. Cai von Rumohr - Cowen & Co. LLC: Terrific. Your R&D was up 100 basis points as a percent of sales. Maybe give us some color what you're spending on, where it should be for the year, and how much of that is recoverable under IR&D? Thomas A. Kennedy - Chairman & Chief Executive Officer: Well, it's all IR&D, so it's all recoverable depending on whether it's a cost plus contract in our rates or a firm fixed-price contract. So that's the answer to your first one. The areas that we've been concentrating on and we've been talking about this on the calls is high energy lasers. It's been a big area for us. We do see that as a new up and coming area. There's a lot of demand signal from multiple services. Also, the other big area is hypersonics. As the threat gets more and more sophisticated, it requires more, I would call it speed and agility to be able to get to the threat and hypersonics are becoming a big part of that. So we are investing in that. We've had some great successes in terms of wins on some advanced technology contracts with DARPA in the hypersonics area over the last four months. And then also, we're really engaging in the undersea area and really looking as that starts to expand and becoming an area of interest, especially relative to anti-access/area denial. We continue to invest in advanced EW, again driven by the need for a systems to counter the evolving threat. And we also see a demand, especially across the Middle East region for our C5ISR solutions. So we're continuing to invest in that product line. Anthony F. O'Brien - Chief Financial Officer & Vice President: And Cai, I think your question about recoverability, think of it this way. About a quarter of that increase, at least in dollars, so about $15 million of that relates to Websense. So that obviously on the commercial side, not recoverable on US government contracts. But the balance of the increase is recoverable on our contracts. Cai von Rumohr - Cowen & Co. LLC: Thank you very much.

Your next question comes from Doug Harned from Bernstein. Please proceed. Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: Thank you. Good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, Doug. Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: I wanted to go back to Carter's question on IDS, because I just wanted to make sure we understand what happened sort of Q3 to Q4. Is the change, the fact that the margins are lower in Q3, and you expect them to then increase in Q4, does that have to do more with timing on specific programs, particularly international ones or is it more increased spending in the quarter for things like AMDR? What changed from what you thought was going to happen a quarter ago? Anthony F. O'Brien - Chief Financial Officer & Vice President: From Q3 to Q4, Doug? Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: Well, no. In Q2, when you laid out your guidance, clearly, you had thought you would have higher margins earlier, and that's been pushed out. What changed there? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so I think that a couple of things that – and I'll try not to be repetitive to Carter's question here. So the mix is changing, right, so we're seeing higher volume. But because of the higher levels of development work and some increases on AWD that are at lower margins, we're seeing that which is new compared to what we had expected before. The other thing too, we, as I mentioned in my comments, we do expect, which is not atypical, to have a contract modification that will result in income that we recognize in the fourth quarter, and the magnitude of that is a little less than what we had previously expected. So from a Q4 point of view and therefore a total year perspective, that those are the two major things that are driving the change. Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: Okay. Thank you. And then when you look at international, it's a lot of focus on things that the binaries, as you were referring to them, and those often are Patriot systems, things like that. If you look beyond it, I'm trying to get a sense of what other areas, such as early warning radars, potential Hawk replacements, when you look at some of the other systems out there that may be in pretty good demand, can you characterize how important those are relative to some of these big systems that make the big headlines? Thomas A. Kennedy - Chairman & Chief Executive Officer: Well I would say for example, the TPY-2 radar that's part of THAAD, but it's also now being looked at as essentially an early warning radar. It's kind of standing on its own and we're getting – there's been a lot of interest on that system within THAAD obviously, but also outside of THAAD. So that's, I would call that, that's been a development that's been occurring here over the last couple of years. So we see that in the future as a major international system that we provide. Obviously, we have the Patriot System itself. We have a big award in 2016. It's the Qatar early warning radar. So it's on the order of $1 billion potential for that system. That's getting ready to go through congressional notification. And earlier had a congressional notification but the customer wanted to increase the size of the radar, so we have to go back. And that looks like that'll complete this year with CN and with an award in 2016. We also, we talked quite a bit about a lot of our missile products which are big. And you are correct, we are getting traction in integrated air and missile defense, especially relative to our NASAM system. That's starting to get traction especially as a replacement to the Hawk System. So outside of Patriot, we see multiple other areas that are allowing us to essentially get out of this pure Patriot binary that we're waiting on. Doug Stuart Harned - Sanford C. Bernstein & Co. LLC: Okay. Thank you.

Your next question comes from Jason Gursky from Citi. Please proceed. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Hey good morning. Hey, Toby, a couple of quick clarification questions for you. Can you give us a sense of how much that contract mod might we worth so that we can get a truer sense of what sustainable margins are in the fourth quarter? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so as far as the amount, we're still in negotiations and working through this with our customer. So unfortunately, Jason, I won't give you specifics. But what I can tell you to maybe try to help you size it, if you remember, we did have a similar type of item at IDS in last year's fourth quarter. But I would tell you that was of higher value or higher magnitude than the one we're looking at here. Our run rate for the quarter, even if you exclude this item, I would tell you our run rate for the quarter would still be better than our year to date performance. So even without that item, the Q4 margin would be better than year to date. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Okay. Another clarification question, the flat to up margins that you suggested for next year, ex the eBorder settlement, is that at the segment level or total company-wide operating margins? Anthony F. O'Brien - Chief Financial Officer & Vice President: That's a fair question. That's at the segment level. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Okay great. And then lastly from me, your bookings that you're expecting for this year, does the resolution of the continuing resolution have any impact on that outcome? Anthony F. O'Brien - Chief Financial Officer & Vice President: No, Jason. We feel good about the outlook for this year regardless of what happens with the shutdown. Thomas A. Kennedy - Chairman & Chief Executive Officer: So on our domestic, none of them are new starts, and there's also a significant amount of international which is obviously independent of the CR. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Okay great. Thank you, gentlemen. Anthony F. O'Brien - Chief Financial Officer & Vice President: And hey, Jason, just a little bit of a follow up to your question about the margin rate for next year, as I said, it is at the segment level. And as a reminder, obviously we'll update it in January, but we do expect our FAS/CAS to be improved next year from this year as well, if you're thinking about it from a total company point of view. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Right, and then at that segment level guidance then, are you willing at this point to give us a first look at whether any of those segments will be up more than others? Are there any big movements in any of the segments? Are you saying that total segments are going to be flat to up? Is there any movement up or down that we should be aware of? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, no I mean our goal today was to give everyone a high look at where we are headed for next year. We're in the middle of our process for locking down 2016. So we're not going to go any deeper than we did, but certainly in January, we'll give you all the details and the color around each of the businesses. Jason M. Gursky - Citigroup Global Markets, Inc. (Broker): Fair enough. Thank you very much, guys. Thomas A. Kennedy - Chairman & Chief Executive Officer: Thank you.

Your next question comes from Sam Pearlstein from Wells Fargo. Please proceed. Samuel J. Pearlstein - Wells Fargo Securities LLC: Good morning. Anthony F. O'Brien - Chief Financial Officer & Vice President: Good morning, Sam. How are you doing? Samuel J. Pearlstein - Wells Fargo Securities LLC: Hi. How are you? Thomas A. Kennedy - Chairman & Chief Executive Officer: We're doing great. Samuel J. Pearlstein - Wells Fargo Securities LLC: Good. Thomas A. Kennedy - Chairman & Chief Executive Officer: When you're growing, it feels good. Samuel J. Pearlstein - Wells Fargo Securities LLC: Can you ask you a question? I know you have thousands of programs, but to just ask about a couple. Any update in terms of 3DELRR, in terms of the protest, when that might get re-awarded? And then any comments in terms of the long range discrimination radar and what happened with that one. Thomas A. Kennedy - Chairman & Chief Executive Officer: Yeah, let me hit the 3DELRR first. For those who don't know, we essentially were awarded the 3DELRR. There was a protest. And through the protest process, the U.S. Air Force has decided to essentially recompete the 3DELRR. So that's right now in a competition. At the same time, we are in an appeal process to see if we can undo that and have the award sustained. So that's where we're at on that. I can't really say much more about that one. You are correct on the long range discrimination radar. There was an announcement last night that didn't go in our favor. We are obviously disappointed in that. We feel we had a good solution for the Missile Defense Agency. And we are awaiting our debrief because we really don't have any more information than essentially you have based on the release out of the DoD. Samuel J. Pearlstein - Wells Fargo Securities LLC: Okay. And so if I can follow up, if I look at that grid on page 10, can you kind of talk about where you would be right now if we ended the year? And then secondly, have you given any thought or would you consider voluntary contributions this year to help move that a little bit as well? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so our return year to date is around 1%, okay, on our assets to the first part of your question. I'll just add a little bit more color there. And if we were even to remain flat for the remainder of the year, as I mentioned earlier when, to Jason's question, we would still see our FAS/CAS income for 2016 to be better than 2015, as I mentioned earlier. As far as the discretionary contribution, that is an element of our balanced capital deployment. We will look from time to time to make that. Right now, we don't have a plan to do that, but it's certainly something depending upon how things shape up over the next couple of months that we'll be evaluating, and certainly we'll obviously let everyone know if we choose to do something there. Samuel J. Pearlstein - Wells Fargo Securities LLC: Okay. Thank you. Anthony F. O'Brien - Chief Financial Officer & Vice President: Sure.

Your next question comes from George Shapiro from Shapiro Research. Please proceed. George D. Shapiro - Shapiro Research LLC: Yes. Good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, George. George D. Shapiro - Shapiro Research LLC: At the Analyst Meeting in September, you'd commented that the big increases in margins on these international contracts usually occur three or four years out. Now there's a change in the guidance this quarter. Any change changed that at all or are we still probably look for maybe some margin improvement next year, but the bigger increase is in 2017 and 2018? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, George, it's Toby. I mean what we said for next year, early look right, was flat to slightly up on margins. But related to those major production programs, it would really be 2017 and 2018 when we'd be in the sweet spot from driving the productivity and the efficiencies on those programs. George D. Shapiro - Shapiro Research LLC: And then, Toby, just one further clarification. The segment margin, it's probably pretty trivial. But does that include Websense or does that just relating to the defense pieces? Anthony F. O'Brien - Chief Financial Officer & Vice President: No, it includes Websense, but it does not include the amortization of the intangibles or the deferred revenue. So it includes their operating results, if you will. George D. Shapiro - Shapiro Research LLC: Okay, and those margins should get better next year, I mean even though you commented the fourth quarter will be much weaker than the 17.5% you just reported. Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, we would see on an operating basis excluding the accounting in acquisition related adjustments, we would see margins next year in the high teens, okay. And what's happening here, this year, Q2 had low margins for Websense because of the restructuring related activities. And it's just a timing issue. We didn't have much going on relative to how those costs we incurred in Q3. We expect them to pick back up, if you will, as we work towards completing the integration activities, which is going to drive the margins down in Q4. But again, all within the outlook we've given for the year for Websense. George D. Shapiro - Shapiro Research LLC: And then last quick one. You mentioned I thought in an earlier question that Websense on a pro forma basis was relatively flat with last year. So what starts the growth next year that you've been looking for? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so what's happening at Websense, we're seeing growth in their TRITON platform and their TRITON product and related services in around the 10% range. And as we've talked about before, they have a legacy web filtering business that has been declining. It continues to decline and the two of those are kind of a push that get us to that flat. So what would drive the growth in the future is both the combination of the expansion of TRITON but also the integration of the Raytheon Cyber Products into the TRITON platform and the synergies of cross-selling across both customer sets that Websense bring to the table and RCP bring to the table. George D. Shapiro - Shapiro Research LLC: Okay. Thanks very much. Thomas A. Kennedy - Chairman & Chief Executive Officer: Thanks, George.

Your next question comes from Robert Spingarn from Credit Suisse. Please proceed. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Hi. Good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, Robert. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): So, Tom, just going back to IDS and thinking about the 3% to 4% top line growth in the context of all the business you've won, and moving past the fourth quarter dynamics which sounds at least on the margin side somewhat one time, how do we think about the ramp at IDS with all this new business particularly in international Patriot over the next couple of years? And how significant a part of the 3% to 4% is that next year? Meaning is that primarily driven by IDS or you're getting some help from missile systems there as well? Thomas A. Kennedy - Chairman & Chief Executive Officer: Well on IDS, let's talk about IDS first. So the new awards, especially the big Patriot awards are normally about a five-year period to essentially get through those programs. So on these new ones, for example Qatar, we're just in the first inning, essentially the first year of that contract. So we're in the, I would call it the ramping up element. And Toby addressed this on a prior question here. So we see the sweet spots, especially relative to the Patriot orders occurring in the 2017 and 2018 timeframe relative to the margin expansion as we ramp up. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): So does that mean, Tom, that the segments are going to all be somewhat similar? Or the growth segments, I'm looking at missiles systems and IDS, and that essentially the other two primary segments are a partial offset there? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, Rob, I think again, we were just trying to give everybody a high level look at next year. We're not prepared to go into the details by business because some things are probably going to move around between now and January when we do that for you guys. As I mentioned, we're still in the middle of our process of walking this all down. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Okay. And then just on services itself, there's a lot of activity in the market, some people buying, others selling. You've gotten deeper into commercial cyber. Is there any kind of portfolio shaping that's left at IIS just to streamline services going forward in a market that seems a little bit volatile, if I may? Thomas A. Kennedy - Chairman & Chief Executive Officer: Yeah so, Robert, we continually look at that in terms of our portfolio shaping, essentially quarterly in terms of all of our programs. And then we mentioned this on prior calls, we never got into the fed IT business. We had good vision and I guess we had the right crystal ball at the time not to get into that particular business area. So most of our services are what we call the value-added type services in terms of servicing our products and our solutions. We're getting us into areas where we can do maintenance and sustainment and also upgrades to systems that are out there which essentially fits better into our overall portfolio of other systems. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Okay. Anthony F. O'Brien - Chief Financial Officer & Vice President: And I think, Rob, in general, we're always looking at that across the company. Thomas A. Kennedy - Chairman & Chief Executive Officer: Right. Anthony F. O'Brien - Chief Financial Officer & Vice President: Including if there are certain programs or products that are better suited even internally in one business or another. So, it's something we constantly look at. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): All right. It sounds like you're pretty happy with the portfolio. And then just a quick one. I don't know what you can say on this. You were asked about it last quarter, but I'm going to ask it differently. I know you can't talk about what you'll do for bomber, but can you tell us which team you're more significantly positioned on? Thomas A. Kennedy - Chairman & Chief Executive Officer: I wish I could tell you anything on the bomber, but I'm not going to be able to tell – go there on that answer. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): Okay. Thomas A. Kennedy - Chairman & Chief Executive Officer: Sorry about that. Robert M. Spingarn - Credit Suisse Securities (USA) LLC (Broker): All right. Okay thanks, Tom. Thomas A. Kennedy - Chairman & Chief Executive Officer: Thank you. Anthony F. O'Brien - Chief Financial Officer & Vice President: Thanks.

Your next question comes from Robert Stallard from Royal Bank of Canada. Please proceed. Rob Stallard - RBC Capital Markets LLC: Thanks very much. Good morning. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, Robert. Anthony F. O'Brien - Chief Financial Officer & Vice President: Hi, Rob. Rob Stallard - RBC Capital Markets LLC: Just quickly on the cash front, Tom, both of you actually, Tom and Toby. You both mentioned that your appetite for acquisitions going forward would be pretty small. I was wondering what sort of free cash flow return to shareholders we might anticipate looking forward. We're looking at sort of 90% or something like that. And then as a follow up, what do you think the split would be of that return between buybacks and dividends? Thank you. Thomas A. Kennedy - Chairman & Chief Executive Officer: Well, I'll give you kind of the top line here, and we keep readdressing this at all our calls to make sure that you understand how consistent we are on it. And we do drive a balanced capital deployment strategy. And so we look at all avenues and try to make sure we do the right thing for the shareholder in terms of total shareholder return. So from that perspective, I'll give it over to Toby here to go through the, I guess the exact numbers as we move forward. Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so I think, Rob, as you know we've been in the range of 80% to 90% the last few years. Be similar this year, depending on how things shake out a little bit. As far as going forward, I think generally speaking, I think of it at the same way in the context of the broad balanced capital deployment strategy that Tom just referred to. Again, we think it's served us well historically. As far as the mix, I won't comment specifically on a mix of how that return would split between dividend and/or buyback. But what I would tell you, that both elements would be part of our return to shareholders going forward. Obviously, we're subject to board approval on these things. But from a dividend perspective, obviously we want to make sure it's competitive and sustainable at the same time. And we'll give you all an update early next year as to our thinking on that, and I think it's usually our March timeframe when we get the board to vote on the dividend, and we'll provide you that detailed information. But you're absolutely right, too, about the aspect of acquisitions, and just to be very clear, we don't have sitting here today any $1 billion-plus deals that we're contemplating for any part of the portfolio including our commercial cyber venture. It would be the more niche targeted type of acquisitions that fill technology gaps or product gaps or customer gaps as we've talked about. Rob Stallard - RBC Capital Markets LLC: Okay. That's great. Thanks very much. Anthony F. O'Brien - Chief Financial Officer & Vice President: Thanks, Robert. Thomas A. Kennedy - Chairman & Chief Executive Officer: Thanks, Robert.

Your next question comes from Pete Skibitski from Drexel Hamilton. Please proceed. Peter John Skibitski - Drexel Hamilton LLC: Hey, good morning, guys. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning. Peter John Skibitski - Drexel Hamilton LLC: On the strong cash flow this quarter, I think you mentioned cash tax timing. Can you tell us what were cash taxes in the quarter and then what's the full year expectation? And then is there any opportunity to outperform your cash flow guidance? Anthony F. O'Brien - Chief Financial Officer & Vice President: So, let me start with the last one first. I mean we feel pretty comfortable. Obviously we've got a range of a couple hundred million dollars on the cash flow outlook for the year of the $2.5 billion to the $2.7 billion. As far as Q3 of 2015 versus 2014, the cash taxes were favorable by about $130 million on a quarter-over-quarter basis there. Let me just check on the absolute amount of the cash taxes here for you. So the cash taxes paid this year were about $300 million. Peter John Skibitski - Drexel Hamilton LLC: That's year to date or for the full year? Anthony F. O'Brien - Chief Financial Officer & Vice President: No, that was in the quarter, okay. For full year it's about $1.2 billion. Peter John Skibitski - Drexel Hamilton LLC: Okay, got you, got you. And then just one follow-up guys. It's some of the wins you had, I think LISC and NORAD that came off, I thought they were in the IIS segment. And I think you made some comments at the beginning, but are those in IIS? And if so, I was surprised, I mean we didn't get a guidance increase in that segment. Thomas A. Kennedy - Chairman & Chief Executive Officer: They were both in IIS, that's correct. Just remember, one of them, the DOMino is being protested. So it was not – I mean it was awarded, but then protested. Peter John Skibitski - Drexel Hamilton LLC: Okay. Okay. Thomas A. Kennedy - Chairman & Chief Executive Officer: The NISSC was protested, and then the protest went in our favor. So that one's done. But DOMino award was protested and it's still in protest. Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, and obviously where there wasn't a guidance increase, Pete, those were contemplated in the outlook we had previously given. Peter John Skibitski - Drexel Hamilton LLC: Okay, great. Thank you.

Your next question comes from Hunter Keay from Wolfe Research. Please proceed. Hunter K. Keay - Wolfe Research LLC: Hey, good morning. Thank you. Thomas A. Kennedy - Chairman & Chief Executive Officer: Good morning, Hunter. Anthony F. O'Brien - Chief Financial Officer & Vice President: Good morning. Hunter K. Keay - Wolfe Research LLC: Just a follow-up to Rob's question about the capital deployment. I understand you guys want to give yourselves some flexibility. But just if we just go through just some of the moving parts in terms of sort of higher operating cash flow next year net of eBorders. Given the 80% to 90% return policy, which has been how you guys have thought about it historically, would you say at a baseline, it's probably fair to assume that the repo continues at this $250 million s quarter, $1 billion annual run rate at a baseline barring a major change in sort of the funding environment? Is it fair to think about it that way? Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, I wouldn't think of it that way necessarily. I mean we bumped it up this year, right. We were at $750 million. We went up to $1 billion, based upon how we felt about where the stock was valued and the growth opportunities that we had in front of us to improve the valuation in the stock, which we've talked about today relative to the strong bookings to date, the backlog, the growth we see for next year. We obviously still think that there's upside in the valuation from Websense. We know we're in a kind of a wait and see period here. But over time, and again not to beat a dead horse, right, we just wanted to give you all a high level view of things and we'll certainly provide more color and specificity on the detailed components of our overall capital plan in the January call as well. Hunter K. Keay - Wolfe Research LLC: Okay. Thanks. Thomas A. Kennedy - Chairman & Chief Executive Officer: All right, I think the other message we wanted to send is that the growth in 2015 is not limited to 2015, based obviously on our backlog but also what we see in the demand signal pulls, we will be growing in 2016. That was really the message. Hunter K. Keay - Wolfe Research LLC: Okay. All right, thanks guys. And then as we think about international a little bit more, sort of parsing that out a little bit. Maybe this is an incorrect conclusion, but does the orientation towards some of the smaller size awards dovetail into maybe more of a direct commercial mix versus FMS, or is that just a line that shouldn't be drawn? And if you could give me at a higher level sort of how foreign direct has trended as a percentage of the international bookings and backlog over the last couple years and how you sort of expect that to trend moving forward into next year? Thomas A. Kennedy - Chairman & Chief Executive Officer: Let me give you kind of our strategy relative to FMS versus direct commercial sale. So number one is, we always work with the customer. And if a customer prefers to go FMS, we obviously support that customer and go on FMS. If there is a choice to be made between FMS and direct commercial sale, we do look at in terms of what is the overall risk in taking a direct commercial sale. So we're pretty prudent in terms of how we make the decisions relative to pushing FMS versus DCS. Now that being said, we do have significant DCS opportunities. We have the direct commercial sale work in-house today that we're doing quite well on. And Toby can give you the exact breakout. Anthony F. O'Brien - Chief Financial Officer & Vice President: Yeah, so at the end of Q3, about 40% of our international backlog was FMS with the balance being direct commercial, so the 40-60 split. That's changed a little bit. It's come, the FMS content percentage-wise has come down a little bit by maybe about 5 points. So that had been a little bit higher, around 45%. Going forward, I don't know that I'd necessarily expect any major change. I'm thinking we'd probably continue to be in that 40% to 45% range at any given point depending upon the mix of programs. And as Tom said, some of them we have to have FMS. Some of them we'll try to drive to DCS. But I wouldn't expect any significant change in that mix. Hunter K. Keay - Wolfe Research LLC: Okay. Thank you. Anthony F. O'Brien - Chief Financial Officer & Vice President: Okay. Todd Ernst - Vice President-Investor Relations: All right. It looks like we're going to have to leave it there. Thank you everyone for joining us this morning. We look forward to speaking with you again on our fourth quarter call in January. Mark?

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.