“Similar to last year, you should expect capital expenditures to be higher in the second half of the year, but in line with our expectation to be just under 2.5% of sales for the year.”

In context

“our strong first quarter performance, brings us to $2.2 billion for the first six months of the year. After capital expenditures, our free cash flow was $519 million for the quarter and over $1.8 billion year-to-date, yielding a cash conversion rate of 123% for the first half. This conversion rate reflects continued strong cash performance in Aerospace and Technologies and a particularly strong start to the year for the Combat Systems group from payments received on our large international vehicle programs. The year-to-date results are consistent with our expectation for the year of a cash conversion rate in excess of 100%. Now turning to capital deployment. Capital expenditures were $212 million, or 2.1% of sales in the quarter, which brings us to 1.9% of sales for the first six months. Similar to last year, you should expect capital expenditures to be higher in the second half of the year, but in line with our expectation to be just under 2.5% of sales for the year. Also in the quarter, we paid $360 million in dividends and repurchased approximately 1.4 million shares of stock for $288 million. That brings year-to-date repurchases to 1.8 million shares for $378 million. We also repaid $750 million of debt that matured in May and ended the quarter with a cash balance of over $1.1 billion. That brings us to a net debt position of $8.6 billion, down nearly $700 million from year-end. As a reminder, we have an additional $500 million maturing in the third quarter that we plan to repay with cash on hand. Our net interest expense in the quarter was $89 million compared to $95 million last year. That brings the interest expense for the first half of the year to $180 million, down from $193 million for the same period in 2022. At this point, our expectation”