“Our expectation is quarter-over-quarter. Remember, this is a high operating leverage group. So they ought to do quite well here.”

In context

“ansion implied at Combat Systems as you move through the rest of the year? I think it has to be 80 to 100 basis points on average up year-on-year for the rest of the year. And maybe the underlying dynamics of given the volume, why we didn't see more of a drop-through margin in the first quarter? Phebe Novakovic: So what drove margin in the first quarter were two things: mix as we came off of older legacy programs, particularly in the vehicle world and in the U.S. and then -- and began ramping up newer programs, vehicle programs in the U.S.; and then a significant amount of the revenue growth came from facilities investment which, by definition, carries a lower margin than production. So both of those things will reverse throughout the course of the year, and combat margins will increase. Our expectation is quarter-over-quarter. Remember, this is a high operating leverage group. So they ought to do quite well here. Myles Walton: Okay. And one clarification on Gulfstream's backlog, if I could. I think that there were some adjustment downward in the backlog. Were those cancellations or ForEx, maybe 6 large jet cancellations or thereabouts? Phebe Novakovic: I don't think that's the way to look at it. But why don't Nicole get back to you on that? But we didn't have any particular notable cancellations. So let us unpack that one with you a little later. Operator: We will take our next question from Ron Epstein with Bank of America. Ronald Epstein: So Phebe, with the increased demand on munitions and so on and so forth, I mean, what are you doing to mitigate any of the issues that could arise from growth in those markets, just like we've seen in the Navy markets given all the demand and growth? There'”