Textron (TXT) 24 Jan 242023 Q4 Earnings call transcript

Thank you for standing by. Welcome to the Textron Fourth Quarter 2023 Earnings Call. [Operator Instructions] This conference is being recorded for digital replay and will be available after 10 a.m. Eastern Time today through January 24, 2025 at midnight.

You may access the replay service by dialing (866) 207-1041 and enter the access code 4065507.

to of conference Investor like Rosenberg, to now President Vice Relations. would turn over the David I Please go ahead.

Thanks, Leah, and good morning, everyone.

I'd and press call our SEC Before discussing release. risk factors, are begin, like and detailed we various mention we in are will subject future to estimates These also expectations today. our filings which during forward-looking statements to be in today's

we CEO; Financial call today, have and Officer. Connor, the Textron's and Scott On Chairman Chief Frank our Donnelly,

found in website. be Investor Our Relations our earnings can call of the section presentation

quarter. Revenues from up in $XXX the $X.X of billion quarter million profit were fourth the $X.X in billion, last in year's Segment $XX XXXX. was quarter the quarter million, up fourth

to fourth During last quarter, Manufacturing flow from fourth quarter, in adjusted cash this quarter. share, fourth year's million $XX was the pension last million year's in compared year's $XXX per quarter. contributions $X.XX up totaled before continuing share from operations income $X.XX per

from up full year, the For million revenues $XX.X billion, $XXX last were year.

segment compared In before million, as 'XX. operations share per profit million contributions share flow million 'XX. $XXX $XXX was 'XX. pension from $X.XX Manufacturing from from was up Adjusted in cash income $XXX $X.XX down continuing XXXX, per to $X.X billion, was

to that, With Scott. call turn I'll the over

Thanks, David, and good morning, everyone.

an a delivered year, aircraft Textron year-end closed customers. to backlog the our margin year up the T-X worked flow increase has to customer billion, products supply across while a portfolio the solid performance for business mitigate XX product an the deliver resulted out solid order one-to-one, our Aviation, strong another our has team book-to-bill Our challenges $X.X we million. and XX year in ago. with Throughout from Aviation quarter of with $XXX with a year, year cash and of expectation generation. Defense of At demand chain ended to

quarter Textron revenues. utilization by were During Bell, revenues within XXXX, resulted revenues. and the aftermarket military in the in At a higher X.X% commercial Aviation growth portfolio aircraft up product solid in driven

the side On quarter. up of the from XX commercial Bell, in last fourth delivered in XX fourth quarter, helicopters we year's

the our For XXX down on we higher in the FARA ramp XXX XXXX, in helicopters military full program. from revenues continued XXXX. year, reflected The delivered

FARA completed engine ITEP the on of program, activities XXX for continues runs integration installation the in the prepare team XXXX. conduct On Bell the to the initial Invictus, the and ground aircraft

Moving Systems. year's with to and fourth margin were quarter. Revenue Textron flat last

During the of its construction quarter, program Systems the following craft completion delivered Ship-to-Shore and successful design trials. last Connector the detailed on acceptance

revenues in higher the Moving and volume favorable by Caltex We in to quarter, higher driven saw in pricing Industrial. specialized vehicles.

Aviation. to year, during explore selected Air to Force's XXX [indiscernible] XX uses operational of all-electric trading from Pipistrel Pipistrel eAviation, part the participate trial Agility Prime, Moving delivered the at period program. in Bells during Electro quarter, the this and aircraft XXXX. for a Also as to was aircraft for up the

in Summary, had a year we businesses. our of strong across all XXXX, the year

on and We organic new ongoing drive our growth margin in growth expansion. of execute strategy continue programs products investments to and to

CGI Gen In suscitation XX-plus the at variant delivered up a Citation servicing Aviation the [indiscernible] October, During the the to over passenger the including newly the agreement delivered X year Sky Longitude. Airlines first to Islands. quarter, and system Aviation CESNA NetJets In and with third new new the XXXth announced years, Ascend, Aviation Longitude, relationship. announced for suscitation fleet Latitude In the XX X,XXX our year, NBAA. announced Courier [indiscernible] Hawaiian Aviation May, of aircraft extending

long-lead key resources, and began in we suppliers FARA Bell, The continues increase ordering materials. the to team work engineering contracting ramping the program, At April. on on activity program with up

continued down from build to advanced programs competition win are X next protypes Systems also X of TeamLink and system future and now remaining aircraft competitors of vehicle MXX initial At was as for to of X army's the the for part of X land selected as the to Textron light on unmanned advancing RCV competitors Systems, the phase X. program Army. we tactical the

Vehicles, EasyGo Liberty the legal introduced LSV battery Elite new our Textron Specialized powered At Street we lithium-ion by system.

XXXX, the an the supplier vehicle At first Caltex from panatonic thermoplastic Caltex for order market. automotive in battery protection establishing as composite skin electric a we underbody battery announced to OEM plate, expanding

vital the aircraft In flight XXXX. Nova Aviation, for system level first unmanned electric began hybrid the year, first our in in of during we prototype, preparation cargo

As was with trending positively and in deliveries. we closed performance manufacturing XXXX, supplier out improvements labor productivity

increased rev across and growth from program higher higher lines Aviation, Bell, increased from driven XXXX in volume. projecting revenues XXXX, growth deliveries we're and on At all the FARA aftermarket commercial product to deliveries. higher revenues by projecting Looking we're military

expecting Systems, ramp. higher programs new At we're as slightly continue revenue to

At offset revenues Caltex. lower-than-expected Industrial, we're growth expecting as flat specialized vehicles in at volume is by

plan cargo next-generation to we flight products, aviation. general eVTOL continue investments of for solutions unmanned Aviation, trainers, At electric development technologies sustainable supporting in and the and

the to flow range fiscal billion. With before the I'll expect call also about the This to up for deliveries higher adjusted aircraft to of revenues in million $X.XX of turn backdrop, of Pipistrel. Textron's range to we're projecting billion, We're in is and EPS We XXXX Frank. that, expected year. be XXXX overall projecting $XX.X $X from X% over pension $X.XX. contributions $XXX at Manufacturing cash

morning, Scott, good everyone. Thanks, and

each were contributed, Backlog year quarter from $XX of net and quarter volume million, partially of million and Textron inflation of $XX the in $XXX higher million. million. at fourth Textron reflecting XXXX, of pricing with pricing the offset volume million by offset of a ago, the million, $X.X the lower starting mix $XX in of by Revenues how profit down reflecting Let's fourth $XX was impact favorable mix of $XXX billion. Aviation. up segment $X.X lower ended review $XXX a of from partially Aviation segments from million Segment billion the quarter, at

and FARA of largely $XX reflecting quarter, of commercial higher of in last mix million Bell, the the fourth $XX higher ago, $XX Moving billion. to driven million segment up $X.X $XXX of revenues deliveries Backlog ended to million revenues revenues $XXX primarily related higher year year's $XXX was $X.X Segment billion, military increased volume quarter million by from million. program. and were profit up by from million driven at a the

year's ended revenues last Systems, million, with Segment million quarter. Textron flat $XXX at Backlog to quarter fourth profit fourth were At equal segment year's quarter. last billion. of $X in $XX the was the

higher quarter the XXXX, pricing million of pricing $XX to of $XX of up mix profit up million Industrial revenues impact from and of at fourth largely net Vehicles. volume $XX million. due Caltex were quarter, and Segment at higher reflecting a $XXX was primarily from favorable year's Specialized last Textron fourth inflation million from million, $XX

the were million Textron were development of sustainable and million. fourth was revenues aviation segment was eAviation segment $XX the costs quarter revenues profit the of reflected and $XX which 'XX, Finance for the to development million solutions. segment in $XX research $X loss initiatives the and related million

the million. half the resulted million in restructuring in announced $XXX in pretax cost XXXX, was LIFO we $XX and first fourth components Moving intangible below provision anticipate savings charges November, In segment of in profit. substantially of completed was a resulting million, We asset Corporate income quarter. million, was interest $X and amortization expenses plan the $XX plan $XX million. approximately were pension of special Net was $XX annualized be million. will non-service restructuring $XX postretirement inventory that expense of million the

before Our million was manufacturing quarter. $XXX cash flow pension the contributions in

in million million For before repurchased million, cash totaled contributions $XXX $XXX prior shares, approximately the to cash $XXX X.X manufacturing the In year, million flow returning year. pension the shareholders. down from we quarter,

to For year, million shareholders. repurchased cash shares, XX.X in the full $X.X we billion approximately returning

our flow to XXXX $X.XX before manufacturing million X. We're $XXX per pension $X about share adjusted in to earnings $X.XX We're also share. expecting range be contributions to of cash to billion. now on Turning per Slide outlook expecting the be to

of segment Moving to Slide be approximately is Aviation, about to on Textron we're with and $X the Segment expected beginning in of X margin XX% to revenues billion. outlook XX%. range expecting

the a Systems, we the margin a about margin We're of to XX%. Looking of to of $X.X in revenues about estimating billion. $X.XX range X.X% forecasting Bell, to of revenues range with billion expect in about we're XX% XX.X%. At

margin At Industrial, X% X%. revenues about in and range expecting segment $X.X a billion a to we're of of

million $XX reflecting aviation continued expecting a million, our investment sustainable revenues we're $XX solutions. of and Aviation, At segment loss in of

million. forecasting we're of profit Finance, At $XX about segment

Looking of net about million about X, $XXX intangible expense, projecting interest asset we're million income. also We're to million million LIFO $XX Slide projecting of inventory $XXX amortization of of corporate million $XXX expense. of nonservice pension and $XX provision,

rate approximately of a effective XX.X%. We full tax expect year

from is last We're year. to CapEx expected million, $XXX from will about $XXX in XX. $XXX million $XXX R&D Slide to down million million, about be Turning estimating XXXX. up be

million XXX concludes average count XXXX. That an remarks. share about assumes our outlook Our shares prepared in of

for questions. line the we Leah, can So open

[Operator now to Kahyaoglu Jefferies. Instructions] with And I with would start like Sheila

of think for Scott, you. XXXX guidance? and book-to-bill about aviation the we maybe deliveries first context just your X do How in

Sure, Sheila, ramp I to continue see on the production we'll side. think a

As but are issues, parts somewhat. in some improved number I into fourth of noted, some productivity supplier start quarter, to improving think line. we see the in are I There the still coming PO did

So continue to I go think volume increase through that will help here us XXXX. into as we

is XXXX on still we up But the We did but obviously of as our I our quite basis, see as X:X that mean, year deliveries the go book-to-bill So market covers book-to-bill. think into 'XX deliveries said see kind I assumption unit strong. year-over-year our XXXX, book-to-bill. X:X a I is that a expectation, certainly we'll being into coming well. we was targeting a obviously, better in than

still is market the good. So

and out, new think well seeing really stimulation I GenX CX-CX nice coming products some been has the received. we're of like

to and start in lineup demand, shape. will drive think the I is Ascend, good product also strong overall,

market-wise, Aviation guide will we're volume well of aftermarket growth. the on we aircraft production $X as obviously, see, around to billion will we both to think I on So and as continued get side, see good,

Do reasonable? get that's about 'XX? you deliveries in Can think we to XXX

We know, number it will are XXXX. be out put -- but as from increased a there, we don't you

X in XXXX, do think were And ask have about of Got XXXX, fell program it. about FLRAA with the could on FLRAA about revenues expectations. million short I think to $XXX million I And budget. the But we $XXX of good just of ITP. if progress how we according our

[indiscernible]? So

certainly hundred do probably -- year. won't that on nicely. program break our few all higher details, go was million is into south we dollars. I for we but it of think think sure, We a Sheila, expect The for reacting revenues I 'XX. But Florida the as were the just very out than

of like the lighter because expected, protest after know, we part early you But of award contract the really originally the than -- ramped year. ramp As was as we've just going well. the delay the the with is number the in

would the on expect XXXX number range in program. I million the FLRAA $XXX a So closer to

a to go we Next, Arment Peter Baird. with question from

that the of you kind just circle Scott, some margin end, leverage How obviously, basis are -- about we margin through? on how to low but maybe thinking you're about just flowing of mean upper end just XX% Just at of about it's the you just outlook continue to of called think that I pricing given range, because kind you in the at back the XX% out of the aviation, thinking get. kind when flat, of XXX points. the just

Just you how are thinking about that?

expect significant price be in think a won't tailwind it good as I continue Sure. definitely still pricing inflation as It it net be the have for is a we of us. think in Look, was for we will I XXXX, positive but and see Peter, us. to backlog, to

we're numbers, and mean, you're So manufacturing some think as at improved on right. I -- in Look, the said, QX if you the performance I look side. conversion saw I guide we the

-- bringing conversion, you get business like of we're is as up we're to XXXX, side but into move where So that historically some the we we XX-plus the into as that of in percent you certainly towards guidance, baking be. the high go which

XX-plus still headwinds while a we've improved will combination big I range. have year inflation and operating it's on, us those we towards all of get think, this is as that side, So to work it's faced something We continued the not positive, performance but help obviously. that on the of got positive, over some price

just what's Frank expense quickly, there on going Got helpful. And it. the That's maybe increase, just then interest specifically?

Well, ahead. go

little. from the a got borrowing that Yes, bond we slightly did deal We've last higher costs year.

rollover the balances on assumes So that conservatism the cash. lower interest earn slightly of a around rate bit little cash we on little of that's It that excess bit financing. the and a

go we with Barclays. And next, David to Strauss

I all? to a I grounding. about wanted Scott, know at the that business V-XX aftermarket the V-XX? Does ask on Bell pretty have you impact big

to their No, think maintenance to -- activities get The David, I fly. do a using impact. ready don't are services, aircraft and it's the material the to frankly, continue grounding opportunity

So be no, expect material But impact. we that situation say probably can't much a more to don't than about that. it I

pretty I working you and guide, What you cash in free adjusted assuming as had build are And guidance had share Okay. what as in are big capital? also the far And the in you 'XX? of Frank, terms know in baking advances. repo a but inventory were 'XX, flow, positive flat, for count EPS share you

Yes. cash year. we standpoint, volume From anticipating a growth are the in obviously

going heard put on military on headwind inventory timing of you spend with there. flow. of very some payment kind and side. activity, in of the levels little a to in payment little activity had continued of as There timing the look a guidance CapEx lot. a that then customer particular, we 'XX So in Bell, And on that's a pressure of year -- the growth, bit a of to terms as 'XX little pressure a in bit terms a volume not is the puts working little higher capital kind good cash of of 'XX particularly

it's But on item. associated flow a higher working investment. think of little of -- still So cash year. very capital mentioned the we kind not we're headwinds of the I there's any still bit a things and with little X bit levels for performance solid It's

In about shares. talked terms XXX average we count, of million the share

or for of so reduction average share roughly count kind X% the in So year.

Next, Citi. with go to Gursky we Jason

kind opportunities with just if the on and of systems talk timing Scott, of few I about pipeline was the potential wondering the awards spend backdrop going go around expectations have of more mind of whether impact and a you with minutes to continuing budget in could on of resolutions out any kind half things and a what's the year like on those? your there

situation doesn't things. now really of CR very the So much system worry me side the right on

very on say we the I'd we're the going strong. in XXXX, relatively indicated, is be flattish Jason, As to revenue pipeline

[indiscernible] on selects that some of We'll [indiscernible] program, achieved are lot the significant down at these us things these next really ARV program. what program, down of look are You the to selects be to important FTUAS, used for opportunities we A really last have a year. virtually they about. don't contractual are And on next down programs CR too select in growth significant impact that big they're concerned XXXX. will and not award have so I'm those, there their execute programs all that

year that think important kind those driven of you selection We the flattish. -- programs, EMD XXXX hugely this down see was the growth in for being important and why XXXX. that's to a us had on I really you So see programs year final revenue award start selects execute by ultimately awards,

that don't kind next, And And X Okay. see if know, was the over Great. 'XX revenue And give on that broad kind brush on contract? losses here point could on does at those potentially profitability what for of you years? I We've business plans overall begin just the to eAviation. for X just they're losses vision begin projected up pick to and a your revenue. then profitability to wondering update higher quickly of the you us I for business? widening got

Sure. X it's doubling 'XX. current in right? that Absolutely. there's eAviation things volume aircraft doubling a roughly sales, roughly from Look, business, is There's segment, to real in Pipistrel, mind, going on the our real which of to 'XX -- sales 'XX 'XX, keep

relatively a our NEXUS several program, a cargo revenue. doing is which, the well. channels. which generate again, and losses probably lineup particularly on, at So hybrid this in years unmanned something the NovaXXX years product the investments Pipistrel from is expanding driving won't that's around revenue is few investment that the say, is small for It's quite distribution We're What's well. it's but R&D, I doing think business, these

of right? part thing investments, that's out, segment. broke So within guys that so dependent is which are, why you frankly, we not these revenue the this or see to And tied

teams which, EV there in unmanned operability, tall Nexus think investment -- dependent the So on the X necessarily of of don't are both the to those shape. side, has making I again, side are be just of but big to and the pieces the general. in on great terms That sort Nova moving the GA that cargo in the

we'll program think the build in and flight I XXXX. on Nova first fuselage also the Wichita. We've in assembly NEXUS wings and of see begun the

are progress, programs. programs very they're both making So investment technology but both good

line go Poponak Noah we the Goldman to Next, Sachs. of with

that plus heard normal was a from And be your landing discussion soft could going it. if XXXX XXXX and maybe something jet deferred we've market that though a demand year cuts inflation Scott, recession there business in you version was we're some having end some order decent actually that it there's so and demand underlying have even or in that like consensus the was anybody desell rate some pent-up a of 'XX. to an that that because

And too bill and case sales force so Or stick if I'm for curious your aggressive that X? be from with or just of your there's customers an hear bookings? upside to book you that is and

I look, we dialogues as on market. through only that Customer right? just People run the feel robust. like good get Well, would end headwind at Frankly, aircraft beginning, no, sooner. are availability, see the about would said I think is the to I

So doubt folks think working sales demand. out hard. our There's are no -- we're there's there I

in I earlier, are that fact going are got coming new as out I really by we've some that think helped the be to models market. that well the received that's, said

about So Look, to all think feel good the number quarter market. end all, can I change this about, as book-to-bill we we quarter, but talked in the very

point XXXX. we And exceed I our market the in number, that we with robust, kind think as at our would in remains that can if this be one-to-one stick of did we'll base great. which assumption

about market remains feel strong. It's it. the good think I So look, we --

more running 'XX, 'XX get labor, demand, ability all lot get is in airplanes if to the number like wondered net inflation good, you Okay. if your matters, The door. be to discuss kind cost how as Do just you? the have down hitting delivery feel the price I piece still maybe supply down better to could know out pertains -- to your of that but ground much the if there change to pricing that significantly in margin, if just point inflation guidance. not if of would to you the up -- the disruption got that rate and be better And And Whatever for delivery plan a settles little is availability. despite of you really I a was why then the revenue it's here? January is, that on chain, that

sorts positive think look, a We're parts I'd saw in to there's track Well, less at we year a exact people. to direct we us say of you numbers applied feel quarter. that net we do late onboarding look you all productivity, are don't the for year as how training better the Last new big charging 'XX, I couple in 'XX to hiring to number I here we that metrics of to all terms the track in number about do to those know a of the of better. it. These dynamics the hours. of labor but getting have now, things, Again, need We Also, quantify are indirect, ramp. PO. -- was make good hit terms hours,

capable not that new It's investments help made disruptive. just imagine, can takes train develop of around lot of training XXXX facilities. new takes We people people, lot lot very it a of in you training a to and our that's them. a but the As

need and on sure. onboard the of helpful. what than it less absolute -- that should But number, in to the was still be XXXX, new number is So for -- people, them we but

their keeping still station going wrong on but I because but help on said, it aircraft. of look, we The the better, I getting eye us I supply out to delivery part as thing, a it's not an right? do a is up close part susceptible of lack chain have still to mean could being available, suppliers it's hold think we're less work

there that, but is how still So improved. like work hiring. about it we're And we cautious through has I less being said,

our things all better about. I are flowing think lines a of talked result most of as I just the

So of our hit to that we in larger number I there. deliveries And do aircraft factor that 'XX. get think ability we'll that into

happening. well X flat Okay. X%, in That's to to XX.X. initial the Or 'XX before of you're ahead absorbing I'm to FLRAA, just year-over-year. This The does you ramping trough? 'XX, guide, ramped number that the back strong was talk up? go X.X pretty of this is ask them quarter, of a Bell view Kind basis ramp you FLRAA need plan. good. and not that's you're the to to more. the going that still as outperforming how hundreds margin, about points There close X% was going going there FLRAA, down some of Can 'XX,

certainly think, I actions team everything some military these were a as EMD ramp down production cost-plus here program. right cost do manage to Those better the no, on programs, costs, Look, the than can doing is -- they control look, of that. the and big to mix we do see continue we

So pressure of But dollars. we this some accretive talked as program generate growth will we seeing ramp benefit will not rate. have about still margin believe up the we around the that, still

the will the positively to the business see EPS some on be margin therefore rate, if for business. the overall contributing even still pressure So we and dollars

of go And with the to Walton line next, Wolf we Research. Myles

profit I quarters, a That conversation. the discussion bit of was offset few the was price little on variance been the wasn't circle hoping a part In walk. there's negative Aviation. as to performance last of to clearly by this volume. It of

bucket all it is that of that, that think So cite performance nonmaterial? you become to has materially fair

that that. we and pretty of price inflation labor year I XXXX, issues did not performance inefficiencies and Well, -- did talk some look stuff these that offset through benefits. impacts over course I that, to had the think we significant the And like supplier wouldn't say, of would say help and driven Myles the in I were material. by

expecting at improved to profit So issue significantly We're going operating the the business. trade revenue expecting improved you're I and probably as over XXXX, see we're absolutely there's margins. positive not look But from still is in therefore, a price think you have the lesser going the better see to big as we expect factories and do that to with performance to in have cover but inflation, efficiencies less number number. because you're supply. But to impact

this I a of we're mean, in profit, But That's different stuff, all I XXXX. you're dynamic, going believe, there's there in net and So growth than significant XXXX. significant including to bottom how going get margin the line, expanding operating see revenue to XXXX.

Okay. And Bell. then net benefit? on the And I in million XX% lower maybe at restructuring program, about, the most getting how R&D $XX think, getting Of is Bell of savings you Bell the about talked savings executed, gross you 'XX? was also much directed is

of Well, just look, but to part -- rates in had we the took way and certainly to mean is and why holding this with Bell action historic are way in we of down, restructuring the as margins of that going our that some control now is the military these don't around we're part production break programs. reduce not at the seeing margin why all there why I some discussion manage we on probably I better we cost volume

of a the to programs that's largely ramped we're the helping what's those production to And take programs. business areas rate better just out cost margin We we as in have supporting even that these big of part sustain see so military the out.

but margin. for there, that's that in helping to the number exact dynamic the that put won't that's improve I -- So

in R&D And Bell? mostly there drop is

as FLRAA that the out. costs, but the you into year, become you earlier significantly we terms ramped shifted helping of has the as side the of gross net is that that our number from business had, don't growing mean, own IRAD I certainly XXXX, that the over. and to program sustaining is. the reduce program in ramps, still IRAD full-blown that's that we is contract and of as know, look, still it contract, the we more But FLRAA had of The supporting as obviously, overall the delay in Yes, still part a recall, the way number. break R&D, all in

is from Morgan Kristine disconnected. next with the have And has Stanley. She question we Liwag

Stallard will next line We Research. on of the move Robert to with Vertical

follow any have Noah's about up holding are where the chain question things Scott, like on areas seeing problems I specific just Are at any moment. the up? parts and to the you're interiors behind that supply

I problem Rob. call. that Nothing we -- have children There's on a all would comment our

And then that competitions your recent months. if there's you secondly, comment don't I'm looking has some But reiterate XXXX? you start Textron some been Understood. capital on maybe in at priorities deployment been sorry, reports press I we as that. for Yes. expect could M&A to

XXXX. we makes, I pretty that a priority definitely continue do we And expect not continues to count to we've at point, we what be and that comment for of No, this in million, and that. would buyback, think, share share that's a Sure. XXX indication significant benefit our to on and shareholders, on look, indicates the think what about talked Frank's obviously our

Seth our with And from JPMorgan. question is Seifman next

kind in I of asking that the guess parts availability productivity Does eAviation that just kind you that at the about and the started see see notion and nice a performance improvement mean deliveries the the in year? for affirm the can quarter. guide in of in something fourth first that would to and being to quarter, of revenue kind track on for expect the increase we of

$X expect the going of terms into revenue of sure, basis for revenue get certainly for Seth. see should XXXX, the on quarter-to-quarter billion I to year. mean, consistent quarterly a with Well, not the over total progression a nice guide we're you of guidance to in

Okay.

end could you view to space market. mainly that reports. just an specific the Okay. read M&A and/or end then And deal attractive on But the expand? market to with maybe comment reports Rob's you different tend on little up won't that Great. do comment twist a bit following on wonder you question. into which probably have -- as important I we if I know

comment. wouldn't I

Fair All right. enough.

next, go of the And Liwag we Kristine with line to Morgan Stanley.

me hear you Can okay?

Yes, we can hear you fine.

On the size can what your for the provide on expectations and what you're more investments? timing doing and you are of payback your details restructuring the your actions, from

That's program out terms lower of and rates put the of within of that's that's positive, mix some going the the of there's very cost structure but V-XX. military obviously largely there, our is and in kind HX we it's as sizable FLRAA Bell, side really cost into with the on aligning the the program. net -- a Kristine, programs like production and people the Well, in piece a ramp of engineering business historic

it's necessary to with So the align programs. old action historic a costs production

the where of and rationalizing side flow. -- As a indicated, also plans keep and high we the with to think return some auto healthy our to we're we on appropriate just understand cash world it's demand aligning business is around we're that where

just -- places. we a to to on there's bits the number basis, a year believe going a about million rate impact run a business. be But $XX So of it's in positive other

so the that's, a and return decided we with proceed good I think, to why And program.

And Great. a maybe do million pricing power for healthy. in if very follow-up. new could I on $XXX is aircraft Aviation,

then? services, if we're the -- aircraft the coming pricing and you new services seeing especially so aircraft talk continuing what's the production, environment to demand for airplanes with And power And if of market? can into the about in new you're see bottlenecks lack

Aircraft flying. to the saw that we services continue volume pricing. what side, that's X.X% baked demand that our mixture I certainly think forecast. was and side. a growth, this strong good are we'll into have on between I Obviously, expect year, Look, which see on we

necessary Our doing customers They're maintenance. running aircraft. the are it

service annual be service pricing And to it is centers what well year function the of the in a business, aftermarket healthy incorporated guide to both the think parts. our Certainly, volume going as in for side. as as expected well as will next always, in a continue part. growth as good we've I increases the So be that's both

Research. to Next, line Shapiro Shapiro go George we the with of

Scott, the I yet in seems that the just deliveries were you a than most of saying were us looking was chain lot fourth for. the what curious, lighter supply better, were quarter

connect you if kind the X could So of dots just there?

it know, build you as takes months George, an many Look, aircraft. to

side while the in through and labor parts push improvements a the So system. takes to the the both side

full we the course impact. that higher impacts a kind the of the lot saw the and year of were cost of year through So

we see at as that's day-to-day see improvement get we look start as and think as the And improvements. you -- result, I a but did what basis, XXXX. -- to experience numbers, So like we feel into you'll I on do a that

X only billion. orders like The X.X then one. the book-to-bill And the in in were was $X.X other quarter

comment a that a with guess as on well pickup as comment lot third at quarter, we from Noah's But the looking quarter concerned anything I about just get a timing or you this the last fourth year well. do recession people are year. as in was to that now. if have really down So from could just that you're as

I lumpiness there's that. I than largely along, all -- some to We did of We be to probably full have going 'XX concerning of it's said in We've our there's going be it's think better back quarters it's some coming customers, there's all larger assumption bit our on expect we are going George, always where think But don't terms year little a but was deposits again, where of there. some timing. when X:X. quarters the in above below through anything X:X, X:X. way

the to demand, how feel XXXX the market. and We obviously, assumption it's about healthy. see think be still But out. we'll good Our think X:X, going plays feel market end we and it's about I I in good is

mean, reflect And has margins, The would the the quarter, be which much margin that offsetting that X delivery higher strength, lower-margin if probably And more higher somewhat margins would one. commercial guided strong continue in you've what the Bell from than just the next last the I drag FLRAA does than program. year, to? really

the to business, the obviously I to profitability commercial are the deliveries. just higher higher think in try business significant the get FLRAA of we on growth We we'll margin see think commercial did to The going But side. deliveries some in have the up outside talked as program. and helps military on continuing margins look, to was the the George, production of to It of some look, there's benefit our we reason continue on -- certainly did good restructuring I we action seeing be to about shore legacy cost programs. we're pressure because XXXX. FLRAA the

to and margin into rate part talked be again, obviously, so that. as and revenue see for continue program, think EPS will going of that But with the And FLRAA growth, we up the profit even the we're to about, to and absolute pressure the guide there increases benefit see the accretion we overall see growth is, of we're of future. going But significant I going some to business.

So to production program. I new think EMD from legacy as we work through a transition a

great we Bell. story obviously, I be to manage term, our going can think long And that for a through it's well. way

Next, Pete Skibitski Olympic we with Global. to move

comments might think and you there opening XXXX? expectations It you sounds Kautex in you little bit there. like can on expand a regarding be Scott, your weak your

drivers Just what were? was the wondering

forecasts. Sure, Pete. business depend X really customer we Look, of industry that's on where sort

judgment of really see really year reflects our and So to for out. with where We We guide we apply that. industry tells how own lot us to don't the got they're go a going our plays the that.

good the about I think we business. feel

margins volume place, and business a the Some consistent obviously of where world and the the where come of will all we've and numbers. the be sort was of as isn't. with better auto restructuring the OEM of reflective growth the is volume the volumes did been the healthy out global in have is growth post-COVID doing But

couple you And of had be Okay. of in I sales softness in questions Are and Caravan on know I some up then expecting a it. we're seeing delivered China. to a Got Asia, to you deliveries lot them 'XX? Aviation.

there? seeing wondering So you're what just

net we're really get mean doing of Peter, I really, everything, But to model-by-model. is market I say the Look, would not into going turboprop well.

know, you more that be bit little As does to a international. tend

our international XX%. a versus the think numbers, I the give business But place. is really usually is jet XX% we think side in good Turboprop roughly I

well. will caravans think do I

are carriers to think going be strong. I

carrier. ramp the to continue We on Sky

get But turboprop the business that we and net the grow tend I So to to around think of place, to look, a continue business in expect questions Jet. most good very XXXX. see we certainly in is

von Cohen. the Cai to question TD go we Next, Rumohr from with

Yes.

Bell, 'XX strength year of any this volume and profit HX? V-XX you are there the looking part for is to And -- is CRR? secondly, Scott, an So the FLRAA at from the extended coming from risk on closeouts

come look, there I we release to contracts Cai. had mean, and do year-over-year you But -- example, an when that number look, basis. be a think pro and Cai, obviously, of total think particularly that. execute will it's We some about on end, the forma. is $X I XXXX a we'll EACs can see MR company QX I million in I flat So material good think that's a well some on the not

we a release preserving I growth as next I think the been side But cost programs. Sure, normally driving we out we've the do some the will well to have the perform do revenue help reserve will. both think FLRAA on we'll getting all activity margin rate XXXX. year? we mean, for So through these to as I revenue side commercial absorption as and and contribute good that

sorry, And the in -- in terms the of CRR. terms I'm of

Okay, about mean, I all before, some goes CRR for pressure I put could sure. the way year, think full as okay. that we've we're through talked if the a

very would program terms is work they're well. I to to they a of think has trying as the plans, move around. them high in Obviously, priority, important how FARA backup Army probably very money

think a we'll would for easier able full the be would think of manage to between through lot sure. pass heck collectively right to we're Congress unless thing year, a be really to and a just okay goes I if Army whole ourselves it. the But I budget now, So it the

us is versus of color one, corporate? Aviation. last strength net terms versus worth in at you high of And where it. the in Got terms give fractionals some Can order

It's Cai. stable, pretty

seeing pretty -- aren't break out, strong. don't demand that change from were. where We really has all a obviously, it's the been but we We

more stuff in like more big we seen international, haven't XX-XX, of the terms roughly changes that. domestic, know, you mix, be In XX-XX as the to jet tends turboprop is

We big whole between what the in aircraft side, haven't what mix through board. be, fractional end pretty demand the goes we changes the and to through across think, continues goes the world seen strong

to go we Harned Next, Bernstein. question with a from Doug

mean, on challenges you Aviation. the that actually at Bell the in strong commented past, you than I on chain had And the at Scott, where given today? supply in you'd can comment Bell, that margins stands you more seen

mean, I world suppliers. pretty stuff Well, very the the of some year impacts look, we right? some I earlier a part we're and listening, brought listed a had challenge suppliers, the either those cases, couple suppliers Bell healthier inside of the got those we number of at of significant small in around in exited

resolve. had a had strong basis. on were QX supply to we of number issues aircraft couple that, specific do of And delivery result, pretty that a you we situation with when the year-over-year where as very Bell a So a a had models able we

So again, challenge. is the this

parts might significant less a problem that still of number getting impact. you absolute the has can part while So a be have

So what guys of nature that's day. through the every the beast just our and work

in I we've enabled we So of critical working. that of the obviously, year deliveries. got higher think resolve did the part keep at a And latter issues couple those Bell to

seeing you relative are less your pre-owned market? historical and potential mean back here market, the still airplanes And norms. is the there out look from then things bit higher were you I benefit the little percentage. and back sale, if But go we've more at you're to Aviation end seen side a not you pricing X We're for kind seeing any that inflation. I commenting as preowned of pressure to of at

older what's just what's ridiculously Look, production not. at noted, up of where of older all, we're coming first there it's you look, market. lower number as that are considerably still number levels and -- levels. No, I going now, where sales, years onto we're was, available of versus historically -- that we It's aircraft they it than which normal. ago low at have think the it's was very for new When a They're refer aircraft. So this. seeing And is of much aircraft increasing, keep at competing with to aircraft eye dynamic. a out And we but relatively on the right? say, back people phenomenon that close kind geez, the mostly sale part, we're used large aircraft, in time, we're you there, look have back out not the a was in market, new obviously, you

SPX. aircraft seeing sales. out are an competing of new that with no, So really there used not impact aircraft we're

Parsons Gavin UBS. to with go we next, And

just been recreational your and a that, like having industrial better headwinds. had And wanted in think underperforming. competitors just vehicle circle what's are get on, section to then it the to segment just I for given some I margins back sense of driving TSV, seems context

So what's driving and the growth margins there?

think at but we've Caltex pretty will margins with Well, in forecast, markets, or that's the on is, improved will flat, I to business. vehicle margins. we volumes said, we that be based largely, in I industrial in as although view the be be improve auto -- continue the industry we look will end just somewhat, mean, think -- I And those again, every down look, side And our overall, look, it think, side.

margin is I think all we again, some don't still of On side, continued because area. do growth, and business But net the to growth the growth, We dollar expect that and line. we'll see of the modest higher in see in on of vehicle factor probably see performance discretionary items. that, these some that modest

look of absolutely seeing. guide. and our guys market at So might are that is into that completely that things factored in other those you with terms guys what we're But again, aggregate consistent in

the over years. NetJets X,XXX And XX just circling maybe helpful. That's to back

a Or... firm deliveries a typically, of Is on think orders? that that over would more out. up they be But XXX average, need something about decade you visibility year. from I on year them a

don't. we right. you're Well, And

at and So treat actually months the that when is we actual the roughly we backlog. which we way down, they -- those put aircraft up deposits point that's those where firm XX is move backlog into the

of work period. out even absolutely beyond to what of up that, forecasting look terms is like demand X-year In going them firm that do with we outside on that looking closely

that anticipate firm very, that fractional that don't have to very the X-year we is be until working on window. certainly and number you we with into what actual going to up then collectively them said, roughly, side. and demand dialogue So put But good as backlog

replay as a.m. is XX conference XXXX. after Time this gentlemen, January reminder, ladies available a and available be will through for And XX, Eastern digitized and today

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