L3Harris Technologies, Inc.

Greetings. Welcome to the L3 Harris Technologies second quarter calendar year 2022 earnings call. At this time, all participants are in a listen-only mode. Today's call will be focused on questions and answers following brief opening remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host, Rajiv Lawani, Vice President of Investor Relations. You may begin.

Thank you, Rob. Good morning, and welcome to our second quarter 2022 earnings call. We published our investor letter after the market closed yesterday, a streamlined format that we're pleased to continue given the positive feedback. So today's call will be focused primarily on answering your questions. Joining me for the call are Chris Cubasek, our CEO, and Michelle Turner, our CFO. A few words on forward-looking statements and non-GAAP measures. Forward-looking statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially. For more information, please see our investor letter and SEC filings. A reconciliation of non-GAAP financial measures to comparable GAAP measures is included in the investor relations section of our website, which is L3Harris.com, where a replay of this call will also be available. With that, Chris, I'll turn it over to you for some brief comments.

Okay, thank you, Rajiv, and good morning, everyone. I'm encouraged by our progress as we continue to execute our trusted disruptor strategy. We're investing in targeted capabilities in and outside of the company. And we've had over $1 billion in notable prime awards this month alone. And we're pursuing international expansion as our customers need mission-critical solutions in a rapidly changing threat environment. We're also encouraged by how budgets are shaping up globally. The threats are evident, and there's growing urgency to support defense spending in the US, NATO, and elsewhere. This is a stark contrast to a couple years ago, where budgets were expected to be flat at best. Our book to bill of 1.14 in the quarter supports this shift in the budget environment. At the same time, there are factors outside of our control, such as supply chain, inflation, and labor market tightening, that are offsetting and masking our progress, as well as the opportunities ahead. Our results, however, highlight that we're working to mitigate these challenges. Our second quarter results are consistent with prior commentary of a back half-weighted year for revenues, margins, and cash. Nonetheless, we kept EPS relatively stable year over year, and our free cash flow snapped back from break-even last quarter to more than $700 million. In addition, while we're reiterating our guide, we're now pointing to the low end of the range across the board. Based on the timing of some key awards, including protest activity and a prolonged supply chain recovery, we decided to take a more measured approach, especially given the macroeconomic and geopolitical uncertainties that are somewhat unpredictable. So despite the noise, we continue to execute on our strategy. With that, Rob, let's open the line for questions.