L3Harris Technologies, Inc.

Greetings and welcome to the L3Harris Technologies second 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. At this time, it is now my pleasure to introduce your host, Mark Krantz, 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 the investor letter that we published to the website yesterday. As always, this call will primarily be focused on answering questions. As you can imagine, given the news, we have a busy day, so we're going to hold the call to 40 minutes this morning. I will be available throughout the day for follow-ups. During the call, we may 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. We will also discuss non-GAAP financial measures, which are reconciled to comparable GAAP measures in the investor letter. Lastly, we conducted an investor perception study in the second quarter and recently reviewed the results with the board. I want to thank those who participated, and we are incorporating your feedback. Before moving to questions, I'd like to turn it over to Chris for some opening remarks.

Okay, thanks, Mark, and good morning, everyone. Yesterday marked a significant milestone for L3 Harris in our acquisition of Aerojet Rocketdyne. Our investor letter disclosed that the FTC will not block our acquisitions. This is one of the final closing conditions for the transaction and we are moving forward to close in the next day or so. I look forward to extending a warm welcome to Aerojet's team of over 5,000 employees who will soon become part of L3Harris. This acquisition represents a pivotal moment for both our company and the defense industry and is poised to generate shareholder value beyond initial expectations. Budgets are increasing for munitions, and the DoD has committed DPA, Defense Production Act, funding for the expansion and modernization of Aerojet Rocketdyne's operations. Upon closing, this acquisition will strengthen the defense industrial base, foster healthy competition, and accelerate innovation in support of the warfighter. In conjunction with this exciting news, we continue to focus on execution across the enterprise and have delivered on our financial commitments again in the second quarter. Our results reflect the momentum we have been building over the last year as the team delivered the fourth consecutive quarter of top line growth, which accelerated to 13% with increases in each segment. We don't talk much about our sectors, but 13 of the 14 grew their top line in Q2, and 13 of 14 had a book-to-bill greater than 1.0. This gives me confidence that we've been investing in the right technologies, and we are aligned with customer priorities. Operating income was up 7%, and margins expanded 50 basis points sequentially, as we had anticipated. In total, we delivered earnings of $2.97 per share ahead of consensus, and free cash flow was positive in line with prior commentary at over 300 million. Given our performance to date, we are increasing revenue and EPS guidance for the year and reiterating our free cash flow commitment. With easing supply chain constraints, operational improvement initiatives, and accelerating sequential growth in product-centric businesses, we remain focused on delivering second half results for 2023. With that, let's open the line for questions, Rob.