GE Aerospace

Good day, ladies and gentlemen, and welcome to the General Electric second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. My name is Liz, and I will be your conference coordinator today. If you experience issues with the webcast slides refreshing or there appears to be delays in the slide advancement, please hit F5 on your keyboard to refresh. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Steve Winneker, Vice President of Investor Relations. Please proceed.

Thanks, Liz. Welcome to GE's second quarter 23 earnings call. I'm joined by Chairman and CEO Larry Kulth and CFO Carolina Dybeck-Hoppe. GE Aerospace CFO Rahul Ghai, who will also assume the role of GE CFO in September, will join us for Q&A. Some of the statements we're making are forward-looking and based on our best view of the world and our businesses as we see them today. As described in our SEC filings and on our website, those elements may change as the world changes. Over to Larry.

Steve, thank you, and good morning, everyone. The GE team turned in another strong quarter with double-digit growth in orders, revenue, operating profit, and cash. Supported by services strength, robust market demand, and the lean transformation within our more focused businesses. In the first half alone, earnings have now surpassed our full year 2022 results. GE Aerospace is growing rapidly as we execute on the ramp for our customers, and GE Vernova is strengthening pre-spin with record orders and improving profitability at Renewable Energy and continued margin expansion at Power. Based largely on year-to-date performance and expectations for continued strength in the second half, we're raising full-year guidance today. Big picture, there's a clear sense of progress, passion, and purpose within our businesses. This was particularly evident to me when I was in France last month. At the Paris Air Show, GE Aerospace shared our bold vision to define flight for today, tomorrow, and the future, during meetings with customers, suppliers, and investors. CFM's RISE demonstrator program drew a lot of excitement as it aims to reduce fuel consumption and CO2 emissions by at least 20% compared to today's most efficient engines. I also saw our GE Vernova team for our onshore wind and grid operating reviews, where we discussed opportunities and challenges with equal candor and transparency. We focus on how we grow these businesses profitably by applying real lean at the point of impact to drive results. We're also seeing lean's impact in our offshore wind facility in San Jose, where the team has reduced cycle times to assemble in the cell roofs by nearly 50% through multiple Kaizens. So while it's still early, I'm encouraged by examples like this across GE Vernova. Day in, day out, we're increasingly operating as GE Aerospace and GE Vernova, two industry leaders with large installed bases where services represent about 70% of GE Aerospace revenue and about half of GE Vernova revenue. In addition to attractive economics, services keep us close to our customers. We understand the issues they're wrestling with and how our technology is performing, which shapes our future roadmaps. And with our businesses executing, we're advancing towards their launches as independent investment grade companies next year. When I reflect on how far we've come, it always starts with the team. So a big thank you to the entire global GE team. There's a lot to be excited about as we look forward to the rest of this year. Before I turn it over to Carolina to take you through our results in detail, Let me take a moment to welcome Rahul to his additional role as GE CFO this fall. Since joining GE Aerospace last year, he has quickly become an impactful and influential member of our GE Aerospace leadership team. And so with our final spin approaching sometime in early 24, and Rahul assuming the CFO job September 1st, this is Carolina's last earnings call. She has been a trusted strategic partner through significant deleveraging, improving our operating results, and building the financial foundation for our three independent companies. We're deeply grateful for her many contributions. So on behalf of the entire GE team and for me personally, Carolina, thank you.