Before we start, please understand that matters discussed on today's call constitute forward-looking statements pursuant to safe harbor provision of federal securities laws. Forward-looking statements involve risks and uncertainties which are detailed in today's press release and our SEC filings. These risk factors may cause actual company results to differ materially. During today's call, we'll discuss third quarter 2011 results, our 2011 guidance for continuing operations and 2012 pension trends. On the call today are our CEO, Wes Bush; and our CFO, Jim Palmer. Please go to Slide 3.At this time, I'd like to turn the call over to Wes. Wesley G. Bush Thank you, Steve. Good morning, everyone and thanks for joining us. Overall, we're very pleased with our third quarter results. We continue to demonstrate that we can generate shareholder value and EPS growth in a challenging environment, by focusing on portfolio alignment, performance and effective cash deployment. Our strong operational performance, combined with our ongoing share repurchases, generated a 23% increase in EPS from continuing operations. We're particularly pleased with the results from the sectors. All 4 businesses generated strong operating income, higher margin rates and healthy-book-to-bill ratios. During the quarter, we repurchased 12.7 million shares, bringing total year-to-date repurchases to 28.4 million shares. At the end of the third quarter, $2.4 billion remained on our share repurchase authorization. Third quarter free cash flow from continuing operations totaled $839 million. This year, through the end of the third quarter, we've returned approximately $2 billion to shareholders through share repurchases and dividends. New awards were also strong this quarter, totaling $7.8 billion for a book-to-bill ratio of nearly 120%. As of September 30, total backlog was approximately $42 million. Based on the strength of this quarter's results, we are raising our guidance for EPS from continuing operations. We now expect 2011 EPS from continuing operations of $6.95 to $7.05, which at the midpoint of the range, represents year-over-year EPS growth of 20% before onetime items, such as last year's tax benefit and the impact of our 2010 debt tender.
As we've discussed before, we continue to make portfolio-shaping decisions and deemphasize certain business lines. This includes decisions to exit non-core and underperforming businesses that don't provide attractive financial returns. Recent examples are the sale of the County of San Diego outsourcing contract and our decision to exit the domestic postal automation business. These portfolio-shaping actions have contributed to a year-over-year sales decline but have had a very positive impact on our company's performance.Excluding portfolio-shaping actions, full 2011 sales would be 2% to 3% lower than last year due to the market environment. Our business continues to be impacted by budget uncertainty. Due to the 6-month continuing resolution process in fiscal year 2011, the potential for an extended continuing resolution, fiscal year 2012, and the possibility of further budget reductions, our customers continue to be cautious in releasing funds for their activities. While there is uncertainty regarding future budget levels, we believe there is clarity regarding the threat environment and our customers' need for affordability. With the drawdown of In Theater operations over the next few years, we believe the nation will focus on developing affordable solutions to address broader, emerging and more capable threats. In that environment, we expect our relatively low exposure to the OCO budget, which is about 3% of our sales, will benefit us, as will our ongoing effort to cost competitively position our company. We continue to focus on positioning the company to perform in a more constrained environment. It's more important than ever that we continue to aggressively address our cost structure, our operational execution and, of course, our productivity. Over the long term, we believe C4ISR, unmanned, cyber and logistics will continue to be priority investment areas for our customers. This is where a substantial amount of our portfolio is focused and I thought it would be helpful to touch on each area before discussing the sector highlights.
So let me begin with our broad unmanned capability, which in addition to fixed wing and rotary vehicles, also spans sensors and processing. In total, unmanned currently represents about 10% of total sales and it is growing. Global Hawk continues to achieve important milestones and improved affordability. International interest in Global Hawk from our allies continues to grow and we see this capability as an important part of future commerce with our allies. Our BAMS derivative of Global Hawk is also progressing well. And the X-47B, our unmanned demonstrator for the Navy, recently completed a successful demonstration of ship-based software and systems that will play a key role in its ultimate operation from the deck of an aircraft carrier. We expect continued strong demand for C4ISR capabilities as the global threat profile continues to expand. Our nation and our allies are increasingly dependent on C4ISR to understand and address these threats and our extensive sensor technology and our processing capabilities are well positioned to support information-gathering efforts.Read the rest of this transcript for free on seekingalpha.com