Textron Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2022 Textron earnings release conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session. If you wish to ask a question, please press 1 then 0 on your telephone keypad. You may withdraw your question at any time by repeating the 1 then 0 command. If using a speakerphone, please pick up your handset before pressing the buttons. If you should require assistance during the call, please press star followed by the 0. As a reminder, today's call is being recorded, and I would now like to turn the conference over to the Vice President of Investor Relations, Eric Salander. Please go ahead, sir.

Thanks, Brad, and good morning, everyone. Before we begin, I'd like to mention we will be discussing future estimates and expectations during our call today. These forward-looking statements are subject to various risk factors, which are detailed in our SEC filings and also in today's press release. On the call today, we have Scott Donnelly, Textron's Chairman and CEO, and Frank Conner, our Chief Financial Officer. Our earnings call presentation can be found in the investor relations section of our website. Revenues in the quarter were 3.1 billion, up 88 million from last year's third quarter. Segment profit in the quarter was 299 million, up 20 million from the third quarter of 2021. Income from continuing operations for the quarter was $1.06 per share, compared to 85 cents per share on an adjusted basis in last year's third quarter. Manufacturing cash flow before pension contributions totaled 292 million in the quarter, up 21 million from the third quarter of 2021. With that, I'll turn the call over to Scott.

Thanks, Eric, and good morning, everyone. Overall, we had a solid quarter across our manufacturing businesses with higher net operating profit, cash generation, as compared to last year's third quarter, despite ongoing supply chain and labor challenges. Aviation generated segment profit margins of 11.9%, up from 8.3% in the third quarter of 2021, on slightly lower revenues, reflecting a favorable revenue mix with higher aftermarket volume and strong pricing net of inflation. We continue to see solid demand across our jet and turboprop products, resulting in backlog growth of $524 million in the quarter. We deliver strong performance, even as we continue to experience supply chain disruptions throughout the year that have impacted production schedules. In the quarter, we delivered 39 jets, down from 49 last year, and 33 commercial turboprops, down from 35 in last year's third quarter. Last week at NBAA, we also announced two large fleet orders that included an agreement with Fly Exclusive for eight XLS Gen 2 aircraft with expected deliveries in 2024 and up to six Longitude aircraft with deliveries expected to begin in 2025. Fly Exclusive also exercised its option to purchase an additional five CJ-3 Plus aircraft from its order earlier in the year with deliveries expected to occur in 2024. We also had an agreement with Fly Alliance for four XLS Gen 2 aircraft and options for an additional 16 aircraft, with deliveries expected to begin in 2023. At Bell, revenues were down in the quarter on lower military revenues, partially offset by higher commercial revenue. On the commercial side of Bell, we delivered 49 helicopters, up from 33 in last year's third quarter, including the 400th Bell 505 aircraft. During the quarter, we continue to see solid commercial demand across all our models. Moving to future vertical lift, we continue to await a FLORA contract award announcement from the U.S. Army. At Textron Systems, revenues were slightly lower in the quarter. During the quarter, ATAC announced a five-year IDIQ contract with the U.S. Navy to provide chase flight services for the F-35 program. Systems was also recently awarded a contract to provide aerosol and operational support on its fourth maritime site, services that are expected to begin in 2023. Moving to industrial, we saw higher revenues in the quarter driven by higher volume at both Caltechs and specialized vehicles, and favorable pricing principally in specialized vehicles. Caltechs, while revenues were higher in the quarter as compared to the prior year, we continue to experience order disruptions related to the global auto OEM supply chain shortages. Moving to E-Aviation, we're seeing increased order activity for our training aircraft like the Alpha Trainer, which is a low-cost pilot development platform. In the future, we will look to expand this training option to include the VALS Electro as we work to achieve an FAA Also, last week at NBAA, we unveiled our new Nexus EV tall model aircraft. Our updated design reflects our ongoing investment in the underlying research and development supporting Textron's long-term strategy to offer a family of sustainable aircraft for urban air mobility, general aviation, cargo, and special mission roles. To wrap up, we continue to see strong demand in our end markets, and our teams are executing well in a challenging environment. With that, I'll turn the call over to Frank.