L3Harris Technologies, Inc.

Greetings and welcome to the L3 Harris Technologies first quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Mark Kratz, Vice President, Investor Relations. Thank you. You may now begin.

Thank you, Rob. Good morning and welcome to today's call. Joining me are Chris Kubasik, our CEO, and Michelle Turner, our CFO. During our discussion, we may reference our investor letter that we published on our website yesterday. We're listening to investor feedback and have made some enhancements. Given the detail in this letter, this call will primarily be focused on answering questions. We may also discuss certain matters that constitute forward-looking statements. These statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially. For more information, please reference the safe harbor provision found in the investor letter and our SEC filings. Lastly, we will frequently discuss non-GAAP financial measures, which are reconciled to comparable GAAP measures in the investor letter. Before moving to questions, I'd like to turn it over to Chris for some opening remarks.

Okay, good morning, and thanks, Mark, and welcome aboard. We've been focusing on execution under our performance first imperative, and I'm pleased with our results. The first quarter was strong in many respects as we continue to build momentum with our trusted disruptor strategy, resulting in record orders and record backlog. Improving macro trends serve as a positive backdrop, including the president's 2024 budget request released to Congress in March. We are well aligned with the priorities in the National Defense Strategy, which is reflected in robust funding in major areas for us, including space and joint force capabilities, as well as missiles and munitions, given our pending acquisition of Aerojet Rocketdyne. Our goal for Q1 was to grow the top line, meet the EPS number, and have positive cash flow. The team rallied and delivered on all counts. For a third consecutive quarter, we had top line growth, a 9% increase with each segment growing. Operating income was up in two of the three segments despite the usual headwinds. However, we came in line with where we thought we would be to begin the year. This resulted in EPS of $2.86, and we anticipate building from there. Free cash flow came in at over $300 million, a significant improvement from a year ago And we also front loaded our share repurchase commitment for the year. We received a second request from the FTC in March, which was followed by the Aerojet Rocketdyne shareholder approval vote the following day. Both of these outcomes were expected, and we are responding to the FTC. We still anticipate the deal will close later this year. First quarter results, our differentiated winning strategy, and the overall business environment led us to reaffirm our 2023 guidance with the recognition that record orders and strong revenue growth to date could support a bias towards the higher end of our revenue guidance range should these trends continue. We still have work to do on profitability, but with abating macro headwinds, operational improvement initiatives, and accelerating sequential growth in product-centric businesses, we remain committed to our full-year EPS guidance. So we're off to a strong start, and I'd like to recognize our employees for continuing to prioritize performance first in everything they do. With that, let's open the lines for questions, Rob.