General Odierno: I have about ten minutes and then I will open it up for any questions that you might have. First, it is great to see you. Thanks for coming out on this Friday morning. Over the past 236 years, the history of the United States Army has been marked by decisive action in a wide range of missions -- including regular and irregular warfare, humanitarian assistance operations, engagement with allies to build partner capacity, and support to civil authorities. Over the last decade our Army has been fully committed to combat operations in Iraq and Afghanistan. Secretary McHugh and I are incredibly proud of the work our Soldiers and civilians have accomplished in these two countries and elsewhere. But we do remain a Nation at war, committed to the mission in Afghanistan. We also remain an Army that is globally engaged. Currently we have 90,000 Soldiers deployed in support of operations and another 96,000 Soldiers forward stationed overseas. Our Nation's Army has Soldiers located in nearly 150 countries around the world.

Moving forward, our Army remains mindful of our primary purpose: to fight and win our Nation's wars. This role is non-negotiable. Warfighting alone, however, is not all that our Nation requires of its Army. In today's complex and uncertain strategic environment, it is imperative that our Army remains responsive to the Geographic Combatant Commanders and as the decisive arm of the Joint Force. The Army provides depth and versatility to the Joint Force through the capabilities embedded in our Active, Guard and Reserve Components.

Meeting the challenges of an uncertain, complex, and interconnected strategic environment requires an Army that is adaptive and innovative, flexible and agile, integrated and synchronized, lethal and discriminate. With that in mind, our Army must retain the right capacity and diversity to perform a wide range of missions and provide a variety of military options to our national security leaders.

The President and Secretary of Defense recently provided new defense strategic guidance to focus our efforts. The creation of this strategy was inclusive and comprehensive, and Secretary McHugh and I were deeply involved in this unprecedented and collaborative process. The defense strategic guidance was clear. We will strengthen our presence in the Asia-Pacific region. We will remain globally vigilant, especially in the Middle East. We will continue to build and strengthen critical partnerships and alliances around the globe.

Over the last five years, we grew the Army to meet the requirements associated with large-scale combat and stability operations in Iraq and Afghanistan. With the successful completion of our mission in Iraq, the continued transition of operations to Afghan Security Forces, and the reduction of U.S. presence in Afghanistan, our strategy calls for us to no longer plan for large-scale stability operations. Accordingly, the time is strategically right to reduce the Army's force structure. Even given a fiscally constrained environment, our Army will accomplish our reductions in a responsible and controlled manner. Secretary McHugh and I are committed to ensuring we walk down this hill "at the ready" rather than running our Nation's Army off a cliff. We will reduce our Active Force end strength from 570,000 to 490,000, which will include a reduction of at least eight Brigade Combat Teams.

It is important to note, however, that an Army of 490,000 in 2017 will be fundamentally different and more capable than our Army of 482,000 that we had in 2001. We are an Army that is seasoned by combat. We will continue to increase our investments in Special Operations Forces and the cyber domain. We've drastically improves our Command and Control capabilities, significantly enhancing mission command. We've modularized our Brigade Combat Teams, making them more capable and lethal. We've increased our aviation assets. Our National Guard and Reserves are truly an operational reserve, giving us increased depth and capacity. Finally, we will leverage the lessons learned from ten years of combat as we look into developing what our future force might look like.

Going forward, the Army has three principal and interconnected roles: prevent, shape, and win. We prevent conflict. We do this by maintaining credibility based on the Army capacity, its readiness, and modernization to prevent miscalculation by potential adversaries. Moreover, the Army has a critical role in shaping the environment by supporting Combatant Commanders in sustaining strong military relationships with allies, building the capacity of partners to maintain internal and regional stability, and operating alongside our Joint Forces to facilitate access around the world. And we stand ready to win our Nation's wars when needed. If all else fails the Army will always be ready to rapidly apply its combined arms capabilities to dominate any environment and win decisively as part of the Joint Force.

As we look ahead, the Secretary and I have several priorities. Foremost, we will provide trained, equipped, and ready forces to win the current fight. Second, we will develop the Army for the future as part of Joint Force 2020, a versatile mix of capabilities, formations, and equipment. We must sustain our high quality all-volunteer Army. We will continue to transform the ways we modernize equipment by better aligning requirements, resources and the acquisition process. We must invest in energy initiatives in order to reduce the cost of energy within our budget. We will adapt leader development to meet our future security challenges. And, finally we will foster continue commitment to the Profession of Arms, a noble calling founded on the bedrock of trust, which will be key as we move forward and develop our future Army.

We are an Army in transition. While continuing our missions abroad over the next several budget cycles, we will refine, adjust, and adapt as we move the Army toward the future force needed. Our approach to the current and future budget cycles will remain strategy based and fiscally prudent. Adjustments will come through deliberately balancing three rheostats. The first piece consists of an end-strength force structure and personnel. The second is modernization, and the third is readiness.

First we will continue to meet our commitments in Afghanistan and around the world. The Army will continue to play a large role in the missions identified in the strategic guidance, including: counterterrorism, irregular warfare, deter and defeat aggression, projecting power, defending the homeland, providing support to civil authorities, and conducting stability and counterinsurgency operations. We will increase engagements with allies and new partners in the Asia-Pacific region -- home to 7 of the 10 largest armies in the world- to enhance our collective and security and promote economic prosperity. We must utilize our depth to sustain relationships with our friends and allies to ensure stability by building partner capacity in the Middle East.

We will decrease our European footprint by two heavy Brigade Combat Teams, with the first one coming out of Europe in 2013. In order to continue our strong engagements with NATO and other European partners, we will deploy rotational forces to conduct training and readiness exercises with our allies and our new partners. In Latin America, Africa, and elsewhere, we will use innovative, low-cost, and small-footprint approaches to conduct engagements, maintain stability, and build partner capacity. End strength reductions will occur over the next 6 years. We will follow a drawdown ramp that allows us to take care of Soldiers and families while maintaining a ready and capable force to meet any requirements, including our current operations in Afghanistan. We will also continue to look at the optimum design of our Brigade Combat Teams and enabler units, leveraging the lessons learned in combat. This analysis is ongoing, and we do not expect any decisions for several months, but it could lead to a reduction of additional Brigades if we decide to increase the capability of our current Brigade Combat Team structure.

The National Defense Authorization Act and the DoD budget request of 2013 reflect the Army's modernization priorities. That includes the network, a replacement for our Infantry Fighting Vehicle, the Joint Light Tactical Vehicle, and our Soldier systems. As force requirements continue to decrease in Afghanistan, we will reshape the Army's force generation model. We will implement a progressive readiness model that meets Combatant Commander requirements and takes advantage of our combat experience in both our Active and Reserve components. This requires continual balancing between force structure, manning, training, equipping, and modernization. This will ensure we maintain readiness across the entire force and avoid tiered readiness. And we will continually revisit the balance over the next several years of transition to ensure sustained readiness.

As we look to the future, there are efficiencies we need to reduce costs. Secretary McHugh's direction has been clear in this regard. Energy security requires us to focus on reducing our energy requirements, both in terms of operational fuel usage, but also home station initiatives. We need to continue to find efficiencies and reduce the cost of doing business as part of mitigating risk to our strategy. This includes eliminating redundancies and streamlining our Headquarters. In terms of pay and benefits, the Secretary and I agree with the Secretary of Defense's budget requests. The all-volunteer force is the foundation of our military. But the cost of military personnel has grown at a substantial, unsustainable rate over the last decade. We will not reduce pay, but reductions must occur in the rate of growth in military compensation and other personnel related costs and benefits. It is imperative that during this transition and end-strength reduction, we maintain a commitment to our Soldiers and families that is commensurate with their service and sacrifice.

Today, the Army ensures mission accomplishment, guarantees national security interests, compels adversaries, prosecutes military campaigns, and forges a positive difference around the world. It is what the American people expect and what our own freedom demands. The Secretary and I will continue to assess and make adjustments as necessary to ensure we have the right Army that is agile, flexible, and prepared for the full range of operations and threats.
Thank you very much. That ends my prepared comments, and I would like to open it up for questions.